California tobacco tax hike narrowly defeated at polls

The measure, known as Proposition 29, was defeated 50.3 percent to 49.7 percent, according to full precinct count results posted on Friday by California's Secretary of State. Some absentee and other ballots remained to be counted.

"While the final numbers are not yet in, it appears that California's Prop 29 will be defeated," proponents of the measure said in a statement. "We are sorely disappointed that, yet again, Big Tobacco placed its profits ahead of the health of California and the nation."

The initiative would have raised the tax on cigarette packs by $1 and added an equivalent tax increase on other tobacco products, with the extra tax revenue dedicated to research on cancer and other tobacco-related illnesses.

With the no vote, California's cigarette tax remains at 87 cents per pack. That tax revenue already goes toward various tobacco prevention and cessation programs, according to the state.

A coalition of groups including the American Cancer Society and cycling great and cancer survivor Lance Armstrong were prominent supporters of the initiative, but opponents led by Altria's Philip Morris and Reynolds American Inc vastly outspent their rivals, blanketing airwaves in much of the state with a message that cast doubt on how the tax revenues would be spent.

"The defeat of this life-saving initiative is a genuine tragedy. Big Tobacco lied to voters to protect its profits and spent $50 million to ensure it can continue peddling its deadly products to California kids," Doug Ulman, President and CEO of the Lance Armstrong Foundation, said in a statement on Friday.

Just under 28,000 votes separated the more than 5 million ballots cast in the June 5 election.

(Reporting by Mary Slosson, Additional reporting by Jim Christie in San Francisco; Editing by Cynthia Johnston)