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June/
July 2000

CALIFORNIA: ADDING INSULT TO INJURY
(WAKE UP SACRAMENTO!)

Excuse me if I seem obsessed with activities in California, but left coast regulators never cease to amaze.

After voting to drive responsible tobacco retailers out of business last year (and predictably voting to keep them out of business this year), California's Department of Health Services announced in April that tobacco sales to youth climbed last year for the first time in five years.

Say what?

Yes, you heard right. The Meathead Manifesto, whereby once amusing television sitcom actors turned social-activists sell the citizens of the nation's most populous state a massive sin tax to fund early childhood development programs, showed banner results in its first year of existence. Kids are buying more cigarettes in California than ever, and guess where they're getting them? Gas stations were the worst offenders: 32 percent sold to youths in a recent random survey by the state's DHS, up 57 percent from 1998. Illegal sales at supermarkets grew 238 percent, from 5 percent in 1998 to 17 percent last year. Convenience stores were the other top offender.

What does Rob Reiner have to say about this? Who knows, because the goal of his tax was never to combat youth tobacco sales, but to fund entirely unrelated youth programs. What's left of the tax money may eventually find its way through the overhead of county-level agencies created to "administer" the money and benefit California's children. But like so much of America's magic new funding windfall that is contingent on tobacco taxes and settlement payments (and thus sales), government has landed in the dubious position of relying on Big Tobacco as an integral part of its budget. The flag-waving fanfare of preventing underage smoking and youth sales is, and always has been the case, secondary.

So, let's review: California crushes its most responsible category of tobacco retailers - cigar and pipe shops - under the burden of a floor tax and excise tax, driving many out of business and stripping sales away from survivors, whose customers cut back or turn to out-of-state sources. Legislators pat themselves and Reiner on the back for a job well done. Meanwhile, kids are lighting up even more in California because communities have focused their attention on money rather than a bonafide use of state-level regulation: enforcing minimum age purchase requirements at licensed tobacco retailers.

Even innovation in tobacco retailing is discouraged. The rise of tobacco outlets promised an industry-initiated solution to underage sales: adult-only venues that sell tobacco products, making age verification an integral part of their operations. In fact, many make it a requirement to enter the premises in the first place. A lot more like smoke shops than candy stands.

But does government find ways to reward socially-responsible retailers for their efforts? They tax them off the map.

Under these circumstances, I'd be as mad as the next guy if I had lost my store in California and then watched this blundering drama unfold. Perhaps tobacconists and specialty smoke shops need a higher profile among government officials, to remind them that we're not an industry of teenage kids pumping gas and selling soda and cigarettes to other kids. Our industry should already have 100% underage sales compliance, as a vast majority of stores are owner-operated. Maybe we should prove it and flaunt it to legislators.

E. Edward Hoyt III
Editor