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OREGON VOTERS TRASH TOBACCO TAX

Plus: cigar store thieves caught on camera, now on the Web

Los Angeles, November 8 – In a victory which demonstrated how tax-averse even a liberal state like Oregon can be, state voters soundly defeated Measure 50, which would have placed a heavy tax on tobacco products in the state constitution.

With 67 percent of Tuesday’s vote counted, the Associated Press reported that the initiative was losing by a 60 percent to 40 percent margin, a stinging rebuke to the state’s Democratic political leadership which placed it on the ballot.

Like similar measures which failed in California and Missouri last year, voters rejected a plan which would have placed the burden of funding an expansion of children’s health care – as is being proposed in Washington now for the SCHIP plan – on less than 20 percent of the state’s population.

The proposed 84.5-cents-per-pack addition to the tax on cigarettes (to $2.02 per pack) would have raised an estimated $150 million annually said proponents, which included the usual litany of do-good groups and anti-tobacco advocates. The measure would also have added an additional 30 percent tax on the wholesale price of all cigars as well as on all other tobacco products. Specific language in the measure, however, would have allowed the Oregon Legislature to maintain the existing 50-cent tax cap on individual cigars by subsequent legislation.

The key factor in the vote was, as expected, the enormous outpouring of support from large tobacco companies – especially Altria and Reynolds American – to buy television and other advertising spots to convince voters that the measure was a bad idea. They succeeded brilliantly. The AP reported that Measure 50 passed only in populous Multnomah County and was defeated by wide margins in every other county in the state, especially in rural areas.

Oregon Governor Ted Kulongoski (D) denounced, as expected, the efforts of the tobacco companies. “What happened was, the tobacco industry bought the election,” he told the Associated Press on Tuesday.

But J. L. Wilson, speaking on behalf of one of the Reynolds American-funded organization which opposed the measure, retorted, “He's basically saying the voters were too stupid to see past the ads,” he said. “Voters were saying that they didn't want to pick on a convenient minority – smokers – to pay for such a program or to put the tax in the constitution.”

Oregon Democrats had to put the measure up as a constitutional amendment because Republican lawmakers refused to pass it in the Legislature, or to allow it to be submitted to voters as a statute. If it had passed, it would have been the only tax specifically authorized in the state’s constitution, a point repeatedly made in anti-50 television commercials.

The pro-50 supporters included not just anti-tobacco groups such as the American Cancer Society, but health-industry interests such as insurers and hospitals which would benefit directly from the passage of the initiative. The election was the single-most-expensive initiative fight in the state’s history, with the anti-50 forces donating more than $12 million to the issue while pro-50 groups raised more than $3 million. State Democratic leaders said they would bring the issue of expanding children’s health insurance coverage up again in the future, but probably not before 2009 when a new Legislature begins its term and they project more Democrats will be seated after the 2008 elections. Whether they pick another fight with tobacco interests is unknown. But if Democrats win enough seats in the Legislature, they won’t have to.

Imperial clears another hurdle in Altadis acquisition:
The Spanish government’s securities regulation agency, known as the CNMV, approved the Imperial Tobacco plan to acquire Altadis, S.A. and clears the way for the actual sale to take place.

Imperial said in a statement that its tender offer period for shares would begin next Monday and continue through January 11, 2008. The statement also said that Altadis would call an extraordinary shareholder meeting concerning the sale within the next two weeks. The Altadis Board agreed to recommend the sale to Imperial last July 18.

It is possible that a competing bid could be launched during the tender-offer period, but none is expected.

Cigar store thieves caught on camera:
Bob Guertin owns and operates Big Sticks Fine Cigars in Mesa, Arizona and had the misfortune to have two expensive Seiko watches stolen from his shop in two separate raids by the same thief over last weekend.

He reported the thefts to police, but he also went a step further and put the surveillance tape of the actual crime on YouTube in hopes of having someone identify the perpetrators and collect a $1,000 reward he’s put up to help find who did this and get them punished.

“There’s no honor among thieves,” said Guertin, “and his best friend today might be the one turning on him for a thousand bucks tomorrow,” he told the Arizona Republic.

Guertin noted on his site that police were able to lift fingerprints of the thief from items he touched while in the store.

The videos can be accessed by clicking here and the store’s site with the reward information can be visited by clicking here. Store owners may wish to check out Guertin’s aggressive use of his existing store surveillance equipment to help deter theft and catch thieves in the future.
~ Rich Perelman

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