Stresses the negative impact of local smoking ban activities in California, particularly in light of an absence of a "preemptive" state smoking restrictions law. Highlights the damage of Proposition 99 funds in continuing to support local anti-tobacco efforts throughout the state. Notes that despite success of Proposition 99, the industry has achieved some success in thwarting local legislation. States that "in each of the jurisdictions where we have engaged in battle, our coalition has consisted of grassroots smokers, restaurateurs, a small number of local office building owners. . . and other tobacco family members." Notes success of "surrogates" for the industry at fighting industry battles, and names several of these ad-hoc organizations. Notes future strategies: campaign consultants, grassroots lobbying, research, local businesses, and the referendum process. Includes budget for the California Local Referenda Project.
- Named Organization
- CA BOARD OF EQUALIZATION
- CA BUSINESS + RESTAURANT ALLIANCE
- CALIFORNIANS FOR FAIR BUSINESS POLICY
- DOLPHIN GROUP
- PRICE WATERHOUSE
- RESTAURANTS FOR A SOUND VOLUNTARY POLICY
- RJR, R.J.REYNOLDS
- TI, TOBACCO INST
- Named Person
- TI, TOBACCO INST
- TI, TOBACCO INST
- El Dorado County
- Nevada County
- San Luis Obispo
- Local Level
- Research Studies
- State Level
- tobacco use
- Industry Strategies
Page 1: myg46e00
THE TOBACCO INSTITUTE
:8;5 1 STREET. NORTHWEST ROBERT S. McADAM
'NA.SHINC.'TON. DC ^_0006 ~ ice President
'O2'a57-4f3o/1 M01) -424-yR,T'> ,oeciai f'tolects.
December 10, 1991
TO: Kurt L. Malmgren
FROM: Robert S. McAdam
RE: California Local Referenda Program
In the absence of a preemptive state law governing smoking restrictions, we have
confronted -- and' will continue to confront -- an unprecedented threat of workplace and
restaurant smoking ban actions at the local level in California. Either through the ballot
box by referenda or through a reasonable compromise forged with local officials, this
increasing treat of local smoking bans must be challenged.
Mounting credible referenda campaigns is an extrernely expensive undertaking. The most
productive and cost-efficient way in which to thwart smoking bans and limit'~ referenda:
expenses is to forge reasonable smoking law compromises -- before the issues reach the
ballot stage -- with local lawmakers.
The past eight months of operating at the local level have given us some substantial
insight into what organization and resources have been most effective in waging this
particular battle to stop these prospective bans. It should also be noted that some of
these proposed bans on the ballot, such as in Sacramento, cover populations greater
than many states.
Through this document, I hope to propose both a strategy and an~.allocation of resources
for future local battles in California. Whether we fight these ordinances at'the ballot box
or we motivate changes prior to the ballot box, the allocation of resources for these local
battles must be done in a coordinated manner. To do that effectively, I need to give a
brief description of what I see us facing in the future in this environment.
The grant money available through Proposition 99 revenues has been effectively
distributed to local health agencies and through them to local advocacy groups
throughout the state. There continue to be materials circulated throughout the state
outlining processes to be followed for application for additional grants. The local grants
are invariably tied' to required' outspoken support for total smoking bans. In fact, the
grants have established' a new vested interest through the distribution of this money.
Across the state there are increasing numbers of individuals who depend on the Prop:
99 grants for their livelihoods. That not only increases the sophistication of their
information network, but creates a: new lobbying force that is dedicated to the
perpetuation of, this program and which is totally divorced' from the policy issues in
Page 2: myg46e00
Mr. Kurt L. Malmgren
December 10, 1991
While the total amount of Prop. 99 revenue available for local grants has been reduced
to $3& million, there is still enough to fund those who want to eliminate smoking at the
local level. Furthermore, even a total cutoff ofJocal grant money this coming year would'
leave enough money in the pipeline to cause us serious concern.
Despite the flow of funds, the establishment of a network, and the creation of a new
vested class of, workers, the overall operation of the antis drive to create an entirely
smoke-free environment has been less than optimal. Nevertheless,, their drive, coupled
with numerous newspaper articles and the JAMA study, have worked to und'ermine our
ability to organize local business interests.
That the opposition has operated at less than 100% efficiency should not minimize their
overwhelrning advantage in this arena. Not only do they have substantially more money
at their disposal, but the politicali atmospherics weigh heavily in their favor. If is still a
politicai'i benefit for any local politician to "protecV' his constituents from the "evils" of the
WHAT WE HAVE ACHIEVED
Despite the financial and atmospheric advantages of the antis, we have been able to
achieve some remarkable progress during the past~ eight months, using both Institute and
company resources. To date, comprehensive smoking bans (restaurants and workplace)
exist in only the following communities:
San Luis Obispo
Sacramento (phase in June 1992).
Nevada County (restaurants only)
Referenda will be held in the following cornmunities to determine the fate of the proposed
Sacramento County (June, 1992)
Ell Dorado County
Page 3: myg46e00
Mr. Kurt L Maimgren
December 10, 1991'.
It is important to note that San Luis Obispo, Lodi, and Sacramento occurred rp ior to the
establishment of the organization that we are currently operating and' Bellflower occurred
during its first month of operation.
In each of the jurisdictions where we have engaged in battle, our coalition has consisted
of grassroots smokers, restauranteurs, a small number of local office building owners,
bowling alley proprietors, bar and tavern owners, vending company proprietors, a srnalU
number of hospitality industry members, and other tobacco family members. Retailers
have na played' a substantial role in this effort. On occasion, we have employed the use
of a: local lobbyist to communicate our position to members of the governing body. On
still rarer occasions, we have sent a TI representative to work directly with local officials.
While the industry has coordinated the process, we have effectively used surrogates
throughout this effort, and we have severaf organi>zations started which serve to facilitate
the organization of local interests. These entities provide us with the negotiation
necessary to limit our referenda exposure.
First, we have created Californians for Fair Business Policy, which is the name given to
our operation that has conducted the various referenda, and it is clearly identified' as a
"tobacco organization."' Then, there is the California Business and Restaurant Alliance
(CBRA). This organization has a tax exemptstat'us and is operated by The Dolphin
Group with assistance from our consultant, Joe Justin. Finally there is Restaurants for
a Sound Voluntary Policy (RSVP) operated by Rudy Cole. While this organization was
active in the Los Angeles battle, and to some extent in Bellflower and Culver City, it has
not grown since then and does not have a presence outside the Southern California
region. A variety of RJR-sponsored local smokers" rights organizations have been
created for specific battles to assist in the grassroots efforts.
As we approach 1992, a number of key battles at the locai' level are before us. Of
primary importance is the City of Los Angeles. With a substantial expenditure oftime and
resources,, a smoking ban ordinance was defeated by the industry in the Fall of 1990.
The atmosphere has changed somewhat since then; the battle is likely to be more difficult
and we are likely to operate with fewer resources. A number of other major jurisdictions
are poised to act on this issue in the very near future. They include San Jose San Mateo
County and~ Oakland.
WHAT WE NEED FOR THE FUTURE
As the opposition gets more aggressive (which they will), we must~, become more
aggressive in our efforts to defeat them. What follows is a strategy for the: future along
with a description of the resources that are needed1o fulfill the strategy.
Page 4: myg46e00
Mr. Kurt L Malingren
December 10; 1991
Local elected officials continue to be sensitive to locall business interests as well as the
"health and welfare" of the citizenry as a whole. We must continue, therefore, to
demonstrate the impact of smoking bans on local business interests. Beyond that, the
population that smokes must become more vocal about its objection to total smoking
The mobilization of the various Regional Directors from other regions to impact the
California situation over the past few months has been very instructive. First, it is clear
that one individual cannot handle this workload even, in a cont'ract'ed' region. Therefore,
it is important to have two individuals who will be full time consultants for the duration of
this project. Second; one individ'uaI must be irn charge of this campaign; and it needs to
be someone withi sufficient stature to talk with the various company people on a peer
basis. Under my guidance, it is possible that a skilled Regional Vice President could
handle this. Now that Bob Pruett has taken over, [ believe the appropriate supervision
is available. Thirdly, we will need~ to continue to retain a local grassroots consultant who
will concentrate on businesses other than restaurants. He handles unique problems that
require a significant amount of time in any one community. The personnel cost for this
part of the operation would be roughly $150,000. We should' also budget an additionall
$60,000 for travel to the various localities throughout the state. These consultants will be
retained~ by one of our surrogate organizations:
Because the three consultants will be housed outside of the TI structure and facilities, we
will need to budget an additional amount of $60,0004or support staff and'office expenses.
We need to produce some hard information about the economic impact of the smoking
bans. To date the information has been: slow to materialize because the tax data is
difficult to obtain from the state Board' of Equalization. Now that the bans have had one
or two quarters to take effect, we can look at tax data that will' be available this fall' and
create a study that can be used across the st'ate: A Price-Waterhouse study with some
credibility in this area would cost $25,000.
Page 5: myg46e00
Mr. Kurt L. Malingren
December 10, 1!991
On several occasions, we have mobilized grassroots smokers for bothl appearance at
local government hearings and~ phone calls and letters to elected representatives. This
operation has been managed by both PM and RJR and has yielded some positive results.
I believe that budget constraints necessitate the need for the companies to continue
funding this effort. It would be ideal if we could created a unified purged industry list to
deploy on a case by case effort for both local initiative and for local ordinance fights. We
will further investigate this approach, funded'by the companies, but triggered by our
Regional' Vice President in California:
Local Business Mobilization:
Perhaps our strongest weapon inithis battle has been our ability to organize and mobilize
local businesses opposed to the ban. This has been accomplished through CBRA and'
our full time consultant, Joe Justin, and a great deal of work by The Dolphin Group. If
our battle is to continue on this level, this part of the operation is essential. If PM will'
continue to fund this group which again can be triggered by both circumstances and our
'Regional Vice President, it will fit into our defensive strategy.
Local Business Communication:
As an adjunct to our grassroots business development, there are times when, a direct
mail/phone bank effort to local businesses is necessary to mobilize them. Since Philip
Morris and R.J. Reynolds have budgeted for this, we again would appreciate being in the
position to trigger the mobilization when necessary.
We have had some mixed' experiences with local lobbying in this environment. On some
occasions it has been essential to our effort, on others it has been a waste of money.
This part of the project is essential but needs to be determined on a case-by-case basis,
based on what consult'ants are available and what our judgement is as to their usefulness
in the particular environment. Tl has retained a firm for Los Angeles,, but is unable to
meet the financial demands to hire representatives for the rest of the state.
This money will give us flexibility to retain individual consultants for specific jurisdictions,
as well as have ongoing representation~ in the largest jurisdiction in the state. Projected
Page 6: myg46e00
Mr. Kurt L. Malmgren
December 10; 1991
The referendum process of getting enough signatures to place a ban on the ballot
continues to be our weapon of last resort but'a potent one nonetheless. Our degree of
success in negotiating with local lawmakers prior to the referenda stage will determine the
degree to which this weapon will need to be used in this effort. If we need to exercise
this option in places like Los Angeles, the cost will increase Dramatically. My
recommendation would be that we have a pool[ of money available in our political
committee that can be exercised with the approval of the companies but without the need
for repeated small assessments. Total projection: $750,000 which would be collected
when needed as in the past by special assessment to Californians for Fair Business
Policy. We would only exercise this kind of expenditure to place a ban on the ballot as
a last resort and' after your approval.
In addition to those issues that we have: caused, by referenda, to appear on the ballot in
1992, two cities have decided independently, to place the smoking ban issue before the
voters. The outcome of the elections in all of these cities will have a major impact on the
decision of other communities to proceed on this issue; therefore, it is important to do our
best to win these elections.
The most expensive of these efforts will be the battle in Sacramento County. An initial
estimate for that campaign is $1.5 milGon: Each of the remaining communities, Paradise,
El Dorado County, Oroville, and', Visalia, should not require more than $40,000 to wage
an effective campaign. Thus, the total! is $1.66 million. These are clearly preliminary
estimates, survey research will provide additional information to refine these budgets.
Clearly, this cost dramatically demonstrates the need to fund the other parts of our local
California defense to keep as many bans off the ballot as possible.
Local' Organization Efforts:
Local Full Time Consultants $150,000
Local Staff Travel $60,000
Local Staff Office Expenses $60,000
Local Lobbyists $80,000
Local Organization Efforts Total: $375,000 ~
Page 7: myg46e00
Mr. Kurt L. Malmgren
December 10, 1991
Local California Referenda Total $50,000
* As it becomes necessary to excerise our referenda option in various communities,
this amount could increase greatly.
Sacramento County $1,500,000
El Dorado County, Oroville,
Paradise, Visalia (per jursdiction)
Local California Election Total $1,660,000
GRAND TOTAL FOR CALIFORNIA LOCAL
REFERENDA PROJECT $2,085,000