SALEM &

As tobacco companies prepare to fight a cigarette tax increase aimed at providing health insurance for children, the stage is set for what could become the one of the priciest ballot measure campaigns in Oregon history.




Tobacco giants R.J. Reynolds Tobacco Company and Philip Morris USA separately filed papers late last week with the state Elections Division to form political action committees to fight Measure 50, slated to appear on the Nov. 6 ballot.




Backed by a broad coalition of labor unions and health care groups, Measure 50 would amend the state constitution to increase the state tax on cigarettes to 84.5 cents a pack, raising the state tobacco tax to $2.02 a pack beginning Jan. 1.




"Tobacco is in the game," said Cathy Kaufmann, campaign spokeswoman and policy director for the nonprofit Children First of Oregon, adding that tobacco companies are preparing to "pour a lot of money into the state" to protect their profits.




"They are going to out-spend us," Kaufmann said, "but we're a lot smarter and we're confident Oregonians aren't going to be fooled."




Calls to the tobacco companies seeking comment were not returned.




In 1996, the tobacco industry raised $6 million in inflation-adjusted contributions to fight a 30 cent per pack increase in the state's tobacco tax, making Measure 44 the fourth most expensive initiative in the last two decades, according to campaign finance watchdog Democracy Reform Oregon.




The nation's tobacco industry spent $100 million between four states to fight smoking-related legislation last year. They won contests in California and Missouri, and lost in Arizona and South Dakota, Kaufmann said.




Sarah Wetherson, a research and outreach associate at Democracy Reform Oregon, said with well-heeled interest groups on both sides of the issue prepared to pony up loads of campaign cash, Measure 50 "has the potential" to become the costliest initiative on the November ballot.




"This could easily become a multi-million dollar campaign," Wetherson said, "And, in Oregon when you start talking about multi-million dollar campaigns, that's a big deal."




Sought by Democratic Gov. Ted Kulongoski to finance his Healthy Kids program, the tax increase would provide free or subsidized health care coverage to 83,000 uninsured children in families of four with annual incomes less than $51,600.




Supported by state Sen. Alan Bates and Rep. Peter Buckley, both Ashland Democrats, the tax increase, which Democrats failed to approve through legislature, would generate an estimated $153 million for the current biennium and $233 million for 2009-11 budget cycle.




Democrats, who control both chambers of the state Legislature, were forced to bring the tax increase to the voters in the form of Measure 50 after several attempts to raise the cigarette tax floundered in the House without the necessary Republican votes to pass.




"For most of us, this was a no-brainer," Bates said. "Unfortunately, it wasn't for Republicans in the House."




Rep. Sal Esquivel, R-Medford, was among its most ardent critics. He said taxes generated from cigarettes and other tobacco products would be an unreliable revenue source to fund "such an important program" as health care for children.




covers the state Legislature for the Ashland Daily Tidings. You can reach him at csrizo@hotmail.com.