Big Tobacco once again proves to be worthy opponent

WASHINGTON""Voters in Oregon defeated a ballot measure to fund a children's health-care program by boosting tobacco taxes, the third time an industry campaign has helped defeat new taxes to fund such programs &

and perhaps a signal to lawmakers in Washington regarding a similar plan to raise the federal tobacco tax.

The Oregon measure, an 84-cent-a-pack tax increase, was rejected by 60 percent of voters, according to preliminary returns from Tuesday's elections. Altria Group Inc. and Reynolds American Inc. poured about $12 million into two groups opposing it, far outpacing the previous record amount spent in opposition to a state ballot measure there. The companies targeted two measures in 2006 in California and Missouri, with $65 million and $5 million, respectively.

Tobacco taxes have been rising in states across the country as the idea of linking health-care funding to smoking has proved popular with legislators. Since 2002, 70 tax increases have been approved in 44 states, including increases in conservative areas such as Texas and Montana. Congress recently passed a children's health-insurance program funded by a 61-cent-a-pack tobacco tax, which was vetoed by President Bush last month.

"I've never understood a postelection strategy that says voters were too stupid to understand the issue," said J.L. Wilson, a spokesman for Oregonians Against the Blank Check Committee, which was funded by Reynolds. "At the end of the day, the issue was: 'Are you going to tax a convenient minority for a program that had widespread benefits for everyone?' "

Supporters of the Oregon measure charge that the companies misrepresented the purpose of the tax. "They know that cigarette taxes are popular with the voters," said William V. Corr, executive director of the Campaign for Tobacco-Free Kids, "and what they have done is change the subject to anything but raising tobacco taxes to fund health insurance for children or to fund tobacco prevention."

Corr predicted that the tactic won't work on the State Children's Health Insurance Program being revised in Congress after Bush's veto. He said the program is popular with voters, and congressional Republicans are supporting some form of cigarette-tax increase to fund it.

Tobacco companies are keeping up the pressure to defeat it. Altria unit Philip Morris recently sent a mailing to Nebraska voters, arguing that the tax increase "means more money for Washington""and less money in your wallet," and urging them to tell Sen. Ben Nelson, D., Neb., to vote against it.

Reynolds spokesman John Singleton said Oregon voters appeared to agree with the argument that it was fiscally unwise to fund a program such as children's health insurance with a shrinking revenue stream such as a tobacco tax, and the same holds on the national level. The bill passed by Congress is a five-year extension of the program and uses 10 years of revenue from the excise-tax increase.

In other ballot action Tuesday, Utah voters repealed a law passed by the Legislature creating a school-voucher program, the second time the school-choice initiative was rejected nationwide. Teachers' unions spent millions on the initiative, which they placed on the ballot with a petition.

"You would think if there's anywhere in the country were you would find it would pass, it would be Utah," said John Matsusaka, of the Initiative and Referendum Institute at the University of Southern California, citing Utah's conservative voters.

New Jersey voters rejected a measure that would have dedicated $200 million to fund stem-cell research, the first time a stem-cell measure was defeated by voters.

In Texas, voters defeated a referendum aimed at derailing a proposed six-lane tollway at the center of Dallas' $1.7 billion plan to redevelop its stretch of the Trinity River flood plain. Most of Dallas' political and business establishment opposed the referendum, supporting the tollway as the linchpin for several billion dollars of related highway-improvement projects.

Kris Hudson in Dallas contributed to this article.

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