State raids tobacco tax money

May 31, 2012

Katy Grimes: A newly released federal study reports that California has not only used very little of the billions of dollars in tobacco tax and tobacco settlement money it receives, the state has raided the tobacco fund to plug budget holes.

The Centers for Disease Control and Prevention recently reported that only 6 percent of the funds collected from cigarette taxes and funds from a 1998 tobacco lawsuit settlement went to tobacco programs in California.

This is what happens when governments collect targeted tax money with few specifications on how that money is to be spent.

With all of the recent press for and against Proposition 29, “The California Cancer Research Act,” which claims to be another tobacco tax aimed at preventing children from smoking, or helping smokers quit the habit, this could end up being a bottomless pit of funds.

But with Prop 29, there aren’t even any restrictions requiring that the money be spent in California. Prop 29 will add another $1.00 tax to each $5.19 pack of cigarettes in California. The tax is expected to generate $735 million a year and create a new, expensive state bureaucracy.

But the CDC study shows that states have a bad habit of not using tobacco taxes for tobacco education or cessation.

The report found that between 1998 and 2010, California collected nearly $22 billion from a lawsuit settlement with tobacco companies and from cigarette taxes, but only spent $1.3 billion, on tobacco prevention and cessation programs.

California’s lawmakers have already proven that they can’t and won’t balance a budget, and this spending shows that they will raid any fund available.

In California, politicians use the cover of compelling health causes as money-making mechanisms.

In 2004, California voters were manipulated into passing the stem cell initiative, Proposition 71, which authorized the creation of the California Institute of Regenerative Medicine, at a cost of $3 billion to taxpayers. Touted to as the only way to find the cure for Parkinson’s disease, rare cancers and other rare diseases, eight years later, where are the cures?

Next week, California will be faced with voting on another potential fiscal boondoggle with Prop 29.

Prop 29 shows all of the same flaws as the stem cell initiative—a lack of financial accountability, and severe conflicts of interest.

As with the California Institute of Regenerative Medicine , Proposition 29 is exempt from the oversights of the administrative and legislative budget process, which prevents the legislature and Governor from reining in unchecked spending, and questionable uses of funds.

And, Prop 29 was written to remain in place for 15 years, without the possibility of changes–not even by voters.

Prop 29 will provide an even larger discretionary budget to its commission by allowing $110 million to be spent every year on “facilities.”  The nine appointed public employee commission members can spend the money out of the state, or even out of the country.

If additional taxes are going to be imposed on Californians, the money should at least be required to be spent within the state.


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