Economic Impact of the California Cancer Research Act Job Creation and Economic Activity

•The California Cancer Research Act (CCRC) is an initiative on the June 2012 California ballot that, if passed by the voters, will increase the tax on cigarettes by $1.00 per pack (with corresponding increases for other tobacco products) and allocate the money to reinvigorating the California Tobacco Control Program, cancer and other biomedical research, law enforcement to enforce sales to minors laws and ensure that the taxes are collected, administration. •There will be a small increase in jobs and economic activity as funds are shifted from other activities into the tobacco control, cancer and other research and related activities specified by the CCRA. •The combined effect of the price increase associated with the tax and the substantially reinvigorated tobacco control program the CCRA will create is projected to reduce tobacco consumption by an average of $1.0 billion per year for the first five years after the CCRA passes. •Of this total reduction in pre-tax tobacco sales, $196 million will represent retail activity in California that is shifted to the general California economy and $804 million will represent money remains in the state economy rather than being exported to out-of-state tobacco manufacturers and farmers. •There will be a small loss in jobs as a result of lower retail activity accompanied by a small increase in total economic activity due to the $196 million previously spent on tobacco products that remained in California shifting activities with higher economic multipliers. •The major change will be the fact that $804 million that previously left the California economy will remain in California, leading to corresponding increases in job creation and economic activity. •Combining these two different effects of enacting the CCRA yields an estimate that enacting the CCRA will lead to a net increase of about 12,000 jobs and about $1.9 billion in total economic activity, mostly because of the CCRA’s effects on reducing smoking and other tobacco use.