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SACREMENTO, Calif. -- On the ballot for the November election in the state of California is Proposition 86, a 300 percent increase in cigarette taxes that would fund health care costs in the state. Opponents of the tax hike, including Governor Arnold Schwarzenegger, believe that the increase would increase cigarette smuggling from across the border and even be the source of terrorist fundraising, reported Inside Bay Area.
The tax increase -- 13 cents per cigarette, equaling $2.60 a pack -- would put California's cigarette taxes the highest in the area. Residents would pay $3.47 in taxes a pack, compared to Nevada's 80 cents a pack and Arizona and Oregon, which have $1.18 in taxes per pack, reported the newspaper.
Opponents claim that the increased tax would not only increase crime, but also foster the sales of non-taxed cigarettes on Indian reservations, the Internet and by mail. They also claim that terrorist cigarette smugglers that transport and sell cigarettes from low to high tax states would set their sights on California, Inside Bay Area reported.
"This is an opportunity for terrorist organizations, including Hezbollah, to produce revenue to finance their activities," Leo McCarthy, president of the California Taxpayers Association told the newspaper.
The proof is FBI concerns that the Hezbollah militant group has fundraisers within the U.S. The newspaper reported that authorities have already prosecuted Hezbollah cells twice on the East Coast for smuggling cigarettes to raise funds. In addition, two men pleaded guilty in Michigan to racketeering charges from a cigarette smuggling ring that provided funds to Hezbollah, the newspaper reported.
Opponents also believe that two thefts of more than $5,000 worth of cigarettes from stores in Marin County and Southern California could be attributed to the terrorist fundraising efforts.
But supporters of the proposal believe that the claims are just "scare tactics." "We expect them to do and say anything," Kris Deutschman, spokesman for the Yes on Proposition 86 campaign told the paper. He added that the tax would provide approximately $2 billion to benefit emergency care and health insurance for children.
The tax increase would "help fund some of California's critical health care needs, including emergency care services, health insurance for children, nursing education, tobacco-use prevention programs and enforcement of tobacco-related laws," stated organizations supporting the proposition -- the American Cancer Society, the American Heart Association and the American Lung Association -- in a written statement.