California Proposition 29 to Raise Tax on Cigarettes Has Voters Divided

Proposition 29, California's statewide referendum to raise the tax on cigarettes by $1 per by pack, appears to have Californians split down the middle, with a very narrow majority of support against the ballot measure, but the results still uncertain the morning after Tuesday's vote.

With all of California's precincts partially or fully reporting, 50.8 percent of voters voted against the referendum while 49.2 percent voted in favor- a difference of about 63,000 votes between the yes's and no's.

California boasts a low smoking rate- 12.1 percent- but the state has not raised taxes on cigarettes in over a decade. Currently the cigarette tax is 87 cents, below the national average, $1.46, according to the Campaign for Tobacco-Free Kids.

It was estimated that if passed the tax would raise $735 million per year, according to the nonpartisan California Legislative Analyst's Office. That amount would ikely decrease in time, as more smokers are expected to quit the habit because of the cost increase.

However, that money would not go towards eliminating some of the state's $16 billion deficit. Instead, the proceeds would fund cancer research, and that aspect of the law has drawn criticism. In its endorsements, the Los Angeles Times favored a no vote on the referendum.

"Proposition 29 is well intentioned, but it just doesn't make sense for the state to get into the medical research business to the tune of half a billion dollars a year when it has so many other important unmet needs" the endorsement read.

The ballot measure drew a lot of financial attention leading up to Tuesday's vote. Philip Morris and R.J. Reynolds have spent close to $47 million in ads opposing the hike.

On the pro-hike side, anti-tobacco advocates didn't spent as much - around $3 million on advertising - but the referendum had high profile support from people like Lance Armstrong and Mike Bloomberg, who donated $500,000 to the cause.

The vote was expected to be close, but recent polling had shown voters favoring the measure by a narrow majority. Tuesday's results show a sizable decrease in support over the past several months. In March polling showed 2/3rds of voters supporting the referendum.

The drop in support for the referendum is, at least in part, due to the tobacco industry ad blitz.

ABC's Matt Negrin contributed to this report.