Cigarette tax hike hot issue on Calif. ballot

(CBS News) SAN FRANCISCO -- California voters face a major decision Tuesday: whether the state should raise its cigarette tax by a dollar a pack.

That raises serious questions about cigarettes and the way the state government spends its money. Supporters say it would save lives and stop children from getting addicted by discouraging smoking.

But the tax hike plan has tobacco companies fuming.

California has been a national leader in laws limiting smoking in public places and even inside apartments.

But the "No on Prop 29" (Proposition 29) campaign has turned the vote into a squeaker by spending more than $40 million, most of it from tobacco companies Philip Morris and R.J. Reynolds.

"They've run a pretty good campaign," says Mark DiCamillo, director of the California Field Poll. "The question is: Will they push that number below 50 percent? I don't know."

Cigarette companies point out the $735 million raised would go to cancer research, not to help fix California's budget problems.

Keith Park, who runs Californians Against Wasteful Taxes, notes that, "Not even single dollar goes to reducing our gigantic budget deficit and helping our public education."

Even with donations from across the country, including from Tour de France winner Lance Armstrong and New York Mayor Michael Bloomberg, "Yes on 29" has raised just $12 million.

Longtime anti-smoking activist Dr. Stanton Glantz, of the University of California - San Francisco, says only 12 percent of Californians now smoke, and the new tax would drive that even lower.

"Smoking may simply vanish as a public behavior, and that's why Phillip Morris and (R.J.) Reynolds are so hysterical. ... It could really be a game-changer," he says.

With an expected low voter turnout, California's few smokers could make all the difference in the fate of the tax.

To see John Blackstone's report, click on the video in the player above.