Figure 1
Figure 1 is a double line graph showing how the percentage of adult cigarette smokers in California has declined as cigarette taxes have increased. The horizontal axis lists five-year increments between 1985 to 2020. The background of the graphic has vertical grey shading indicating the enactment years for Proposition 99 (1989), the Breast Cancer Act of 1993 (1994), Proposition 10 (1999), and Proposition 56 (2017). The bottom of the Figure lists the cumulative tax per pack of 20 cigarettes from those four years, beginning with $0.35 in 1989, to $0.37 in 1994, to $0.87 in 1999, and finally to $2.87 in 2017.
The vertical axis on the left side lists the California adult cigarette smoking rate, ranging from zero percent to 25 percent with a five percentage point increment. A blue line shows a general decrease in the percentage of California adults who smoke over the time period, from a little over 24 percent in 1989 down to 10 percent in 2017, with noticeable declines in the rate after the enactment of the three propositions and the Breast Cancer Act of 1993.
The vertical axis on the right side lists the California tobacco gross tax revenue ranging from $200 million to $2 billion in $200 million increments. A red line shows California cigarette tax revenue over the time period, beginning near $300 million in 1985, and ending near $2 billion in 2018. The line shows sharp increases after enactments of Proposition 99, Proposition 10, and Proposition 56 with gradual decreases following each sharp increase in tax revenue.
Sources: Public Health’s California Tobacco Facts and Figures 2018, Public Health’s California Tobacco Facts and Figures 2019, Centers for Disease Control and Prevention, and state law.
Figure 2
Figure 2 consists of three boxes showing a running total of the costs that make up the purchase price of a pack of 20 premium cigarettes. The first box, showing manufacturer costs, is connected by an arrow to the second box showing distributor costs. The distributor box is connected by an arrow to the third box showing retailer costs.
The manufacturer costs box shows manufacturer cost and profit at $4.05 and federal excise taxes at $1.01 for a total average manufacturer price for premium cigarettes of $5.06. The second box shows distributor costs beginning with the $5.06 from the total of the first box. The distributor costs box then includes a wholesale markup of 6 percent, calculated at 30 cents with a note to explain that this is the estimate of 6 percent CDTFA used in its other tobacco products tax calculation, further explaining that $5.06 times 6 percent equals 30 cents. The distributor costs box then shows a subtotal for wholesale cost of $5.37. A note explains that the wholesale cost is greater than the sum of the manufacturer price and the wholesale markup because those amounts are rounded down to the nearest cent. The distributor box then adds $2.87 for California cigarette taxes, showing a total distributor price of $8.24.
The third box shows retailer costs beginning with the $8.24 from the total of the distributor box. The retailer costs box then adds a retail markup of 76 cents for a total retail price of $9.00. The retailer costs box then add sales tax of 8.75 percent, amounting to 79 cents, for a total purchase price of $9.79. There is a note at the bottom of the graphic explaining that, with the exception of federal excise taxes and California cigarette taxes, the amounts in the figure are estimates and averages.
Sources: CDTFA’s Tax Guide for Tobacco Products, fiscal year 2018–19 other tobacco products tax calculations, California city and county sales and use tax rates, federal law, and auditor observation.
Figure 3
This graphic goes from left to right. On the furthest left, it states that tobacco taxes on cigarettes of $2.87 plus an additional tax on other tobacco products from Proposition 10 of 50 cents equals total tobacco taxes of $3.37. In the middle, the graphic states that the average manufacturer price per pack of cigarettes of $5.06 plus a wholesale markup of $0.30 equals the wholesale cost of cigarettes, $5.37. A note explains that because of rounding, the sum of the manufacturer price and the wholesale markup is less than the wholesale cost of cigarettes. Along the bottom the graphic uses the total tobacco taxes of $3.37 on the left and divides it by the wholesale cost of cigarettes of $5.37 in the middle. This results in a calculation showing the tax rate for other tobacco products equals 62.8 percent, shown on the right.
Source: CDTFA’s fiscal year 2018-19 other tobacco products tax rate calculation.
Figure 4
This figure consists of three charts. The first is a pie chart that divides a total of $2 billion in total California tobacco tax revenue from fiscal year 2018-19 into four parts. The smallest slice is $74.4 million from other tobacco taxes, then $226.3 million from Proposition 99, then $350.7 million from Proposition 10, and $1.35 billion from Proposition 56. The chart shows a partial ring outside of the Proposition 56 slice identifying the four ways Proposition 56 revenue was allocated. It shows that $1.3 million of this $1.35 billion went to CDTFA for administration and $69.7 million went for backfill. A note explains that the backfill is the amount CDTFA distributes to earlier tobacco tax funds and state and local governments to replace certain tax revenue last as a result of any decrease in tobacco sales caused by the price increase associated with Proposition 56. The other two parts of the partial ring are linked by dotted lines to the other two charts in the Figure. These are donut charts: one showing that $118.4 million went for fixed allocations and one showing that $1.16 billion went for variable allocations.
The first donut chart divides the total of $118.4 million of fixed allocations in total into six pieces: $0.4 million allocated to the California State Auditor, $6 million to Public Health, $6 million to CDTFA, $30 million to Public Health, $36 million to Justice, and $40 million to UC.
The second donut chart divides a total of $1.16 billion in variable allocations in total into four pieces: $947.1 million (82 percent) to 12 Department of Health Care Services (Health Care Services) programs, $127.6 million (11 percent) to Public Health’s Tobacco Control Program, $57.8 billion (5 percent) to UC’s Tobacco-Related Disease Research Program, and $22.5 million (2 percent) to California Department of Education’s (Education) Tobacco-Use Prevention Education program.
The 12 Health Care Services programs include supplemental payments for Physician's Services, Dental Services, Women's Health, AIDS Waiver, Intermediate Care Facilities for the Developmentally Disabled, and Pediatric Subacute Care Facilities. It also includes a Home Health rate increase, the Pediatric Day Health Care rate increase, a program of all-inclusive care for the elderly, managed care support, the Proposition 56 Medi-Cal Physicians and Dentists Loan Repayment Act Program (loan repayment program), and Community-Based Adult Services Programs.
Source: State Controller’s financial system, California Department of Finance (Finance) revenue transfer letters, and state law.
Figure 5
This is a graphic comparing two calculations in two adjacent columns. The first column is for premium cigarettes only, and the second is for premium, discount, and deep-discount cigarettes. At the top, the average manufacturer price per pack of 20 cigarettes is $5.06 in the first column and $5.04 in the second column. Below that, the wholesale markup rate is 6 percent for both columns. Then the Average wholesale price per pack of 20 cigarettes is $5.37 in the first column and $5.34 in the second. Below that, the tax rate on other tobacco products is 62.78 percent in the first column, and 63.09 percent in the second column. Then, in both columns, the graphic shows the fiscal year 2018-19 wholesale sales of other tobacco products was $411.9 million. At the end of the two columns, the graphic multiplies the $411.9 million in sales of other tobacco products by the respective tax rates in each column, presenting the calculated fiscal year 2108-19 other tobacco tax revenue using premium cigarettes only as $258.6 million, and the revenue using premium, discount, and deep-discount cigarettes as $259.9 million. Below the two columns, the graphic shows that this is a difference of $1.3 million.
Source: CDTFA’s fiscal year 2018–19 other tobacco products tax calculation, CDTFA tobacco sales data, average manufacturer prices reported by the Merchants Association, number of cigarettes sold by brand reported by Euromonitor International, and auditor analysis.
Figure 6
This is a graphic comparing two calculations in two adjacent columns. The first column is for the wholesale markup used by CDTFA, and the second is for a conservative estimate of the actual wholesale markup. At the top, the cigarette wholesale markup rate of 6 percent is in the first column, and 4 percent is in the second column. Then, the tax rate for other tobacco products is 62.8 percent in the first column, and 64 percent in the second. Then, in both columns, the graphic shows the fiscal year 2018-19 wholesale sales of other tobacco products was $411.9 million. At the end of the two columns, the graphic multiplies the $411.9 million in sales of other tobacco products by the respective tax rates in each column, presenting the calculated fiscal year 2108-19 other tobacco tax revenue for the wholesale markup CDTFA used as $258.6 million, and the revenue using a conservative estimate of the actual wholesale markup as $263.6 million. Below the two columns, the graphic shows that this is a difference of $5 million.
Figure 7
: This graphic combines the $1.3 million in additional funds from using an accurate manufacturer price and the $5 million in additional funds from using a 4 percent markup rate into $6.3 million, with a note indicating that this figure is not exact due to rounding. Then the graphic shows three arrows point to the columns indicating where that money could have gone. The first column is titled Proposition 56. It includes $3 million to Health Care Services’ Healthcare Treatment Fund for 12 health care programs and services during fiscal year 2018-19, $412 thousand to Public Health for tobacco control programs, $73 thousand to Education for school programs to prevent and reduce nicotine use, and $186 thousand to UC for its Tobacco-Related Disease Research Program. The bottom of this column shows that this totals $3.7 million.
The second column is titled Propositions 99 and 10, and includes $1.8 million through Prop 10 for state and county early childhood development programs, and $500 thousand through Prop 99 for Tobacco-related health education; tobacco-related disease research; care and treatment of patients who cannot afford to pay; and programs for fire prevention, environmental conservation, habitat protection and restoration, and enhancement of state and local parks. The bottom of this column shows that this totals $2.3 million. The third column is titled Other Tobacco Taxes, and includes $37 thousand for the Breast Cancer Fund, and $186 thousand for the General Fund. The bottom of the column shows that this totals $0.2 million.
Source: State law, CDTFA’s fiscal year 2018–19 other tobacco products tax calculation, CDTFA’s tobacco sales data, average manufacturer prices reported by the Merchants Association, number of cigarettes sold by brand reported by Euromonitor International, Health Care Services’ internal budget and expenditure documents, and auditor analysis.
Figure 8
This is a map of California showing primary care physician shortage areas and the locations of applicants for health Care Services’ loan repayment program. Three types of applicants are indicated, those in shortage areas awarded funds, those in shortage areas denied funds, and those not in shortage areas awarded funds. Applicants of all types are scattered in both shortage areas and non-shortage areas across the state, however, the majority of applicants are those awarded funds, but not in shortage areas, and those in shortage areas, but not awarded funds. There are 104 applicants in shortage areas denied funds, and 79 applicants not in shortage areas that were awarded funds. There were only 38 applicants in shortage areas awarded funds. The map includes pullouts of the San Francisco area and the Los Angeles area. The San Francisco pullout shows three applicants in shortage areas denied funds, nine applicants not in shortage areas but awarded funds, and no applicants in shortage areas awarded funds. The Los Angeles pullout shows 12 applicants in shortage areas denied funds, two applicants not in shortage areas but awarded funds, and four applicants in shortage areas awarded funds. A note at the bottom of the graphic states that due to their close proximity, not all applicants are visible on the map.
Source: State Auditor analysis of data from Health Care Services, the U.S. Health Resources and Services Administration, and the U.S. Census Bureau.
Figure 9
This image shows a person using a laptop computer imposed over a screenshot of CDTFA’s open data portal, with a portion of the terms of use agreement CDTFA requires before allowing access to its open data portal. The top of the graphic appears as an internet window titled “Open Data Portal”. The top section says “Welcome to the California Department of Tax and Fee Administration’s data portal. This portal is intended to provide you with a centralized access to CDTFA’s publicly available data in easy-to-use formats. The top portion includes a button stat states “I agree to the ODP data use policy.” A portion of the terms of use agreement fills the right side of the graphic, and includes the title “Open Data Portal Terms of Use for OPEN CDTFA, www.cdtfa.ca.gov/dataportal.” It includes a three-paragraph policy statement, a one-paragraph introduction, a one-paragraph section titled “accepting the terms of use”, and the beginning of a section titled “definitions”. A paper scrolling image at the bottom indicates that this terms of use agreement continues well beyond that portion visible in the graphic. Imposed over the introduction paragraph of the terms of use agreement is a magnifying glass that focuses on a highlighted section of text that says “these terms of use, which constitute a legal agreement between You and the CDTFA”.
Source: CDTFA’s website.