Cigarette Tax Snuffed Out

Voters in California Tuesday appeared to reject a ballot initiative that would have increased taxes on cigarettes by $1 a pack.

Proposition 29 lost with only 49.2% of voters in favor, according to preliminary results Wednesday from the secretary of state.

The tax would have raised $735 million annually by next year. The money would have gone toward research on cancer and tobacco-related diseases as well as toward preventing tobacco use. Opponents argued that proceeds would have been sent out of state.

Fitch Ratings said the proposition could have reduced the payments that tobacco companies pay states under a  lawsuit settlement — funds that are used to back bonds issued in many states.

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