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Tobacco bond payments may fall if Calif. OKs cigarette tax
June 5, 2012 / 9:17 PM / 5 years ago

Tobacco bond payments may fall if Calif. OKs cigarette tax

SAN FRANCISCO, June 5 (Reuters) - Fitch Ratings said on Tuesday it believes all tobacco Master Settlement Agreement recipients may see lower payments if California voters support a tax measure that would raise the tax on a pack of cigarettes by $1 to $1.87.

Voters are taking up the measure, which would raise revenue for medical research into tobacco-related diseases and fund programs to control tobacco use, in Tuesday’s primary election.

Fitch in a report noted that a similar tax of $1.01 was implemented federally in March 2009, and cigarette consumption decreased by 10 percent the following year, exceeding a 12-year average rate of decline of 4 percent. California is allocated approximately 12 percent of MSA payments, Fitch added. (New York Ratings Team; Editing by Kenneth Barry)

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