Sacred pots tie up taxes

Money, money everywhere and not a buck to spend – at least from the barrels of billions locked up by ballot-box budgeting.

That money can only be spent on specific programs previously approved by voters. It can’t be used to help balance the books in Sacramento or pay down the state’s rising debt or avoid slashing programs for the elderly poor and disabled.

Ballot-box budgeting usually involves a noble cause with an ignoble means: snatching a tax source or raiding the treasury at the expense of other public needs.

The frequent knock on the Legislature is that it won’t get off the dime and do something, so the people are forced to act through the initiative process.

But often there’s a reason the Legislature balks. It is because the proposed action would not be smart, particularly if it creates another spending program. There might be a better use for the money.

Ten years ago, voters narrowly approved filmmaker Rob Reiner’s Proposition 10 to raise the cigarette tax by 50 cents a pack to pay for early childhood development. That program has more than $2.4 billion sitting idle.

In 2002, actor Arnold Schwarzenegger positioned himself to run for governor by successfully sponsoring Proposition 49 to create after-school programs. It has $300 million lying unused.

At least Reiner’s initiative generated its own money source: the tobacco tax. But as a harbinger of Schwarzenegger’s governorship, Prop. 49 spent money without raising any. It merely became another drain on the state’s debt-ridden general fund.

In 2004, state Sen. Darrell Steinberg (D-Sacramento) pushed through Proposition 63 to sock million-dollar incomes with an extra 1% tax for community mental healthcare. That program has $658 million stashed and unallocated.

There’s more tax money scattered around in sacred pots, most of it protected from politicians – the people’s representatives, who are thus restricted in setting spending priorities. It’s one reason the state is staring at a $15-billion deficit.

Schwarzenegger, to his credit, is proposing that voters in November be allowed to free up some of the after-school money.

He wants to spend $100 million of the surplus on classroom repairs and another $178 million for various school programs and child care. He’d also reduce the $550-million after-school budget by $59 million next year. And he’d change the spending formula so, in bad times, after-school programs automatically would get the same hits as the rest of education.

But Steinberg says “no way” will he consider tapping into Prop. 63’s mental health money. And that’s pretty much the final word. He’ll soon become Senate leader.

The huge surplus in the Prop. 10 early childhood program has caught the eyes of many Republicans, especially Sen. Dave Cox of Sacramento County. But Democrats are protecting it. Cox is on his third bill in the last 17 months trying to seize the unused $2.4 billion – “that’s serious money” – and, in effect, scuttle the program, called First5.

“It’s like every other program,” Cox says. “Once it gets started, it’s difficult to stop.”

First5 consists of 58 county commissions and one state commission. The local panels are appointed by county supervisors.

Here’s the screwy situation:

The state is mangling healthcare programs and subsistence payments for the most vulnerable Californians: children of the working poor, welfare moms, legal immigrants, impoverished aged, blind and disabled.

At the same time, First5 has spare billions.

Last month, the San Francisco Chronicle caught Sacramento’s attention with an article detailing some questionable activities that the local First5 commission has funded. They included children’s ice skating lessons, field trips to the Monterey Bay Aquarium, chartered buses to the Jelly Belly factory, camping lessons at Big Sur, marriage workshops for potential parents and a class at the zoo on how animals eat.

Sure, these activities may be worthwhile. But they should be funded by private foundations or charities, not state taxes.

Laurel Kloomok, executive director of First5 San Francisco, complains that her organization has gotten a bum rap. Such controversial programs, she says, amount to only 2% of the commission’s spending. Other programs, she adds, include helping non-English-speaking parents enroll their kids in school, Spanish music classes, “community building,” parent-child interaction – plus child screening for health and developmental problems.

Except for the screening, that stuff still seems pretty marginal when compared to the draconian budget cuts going on in Sacramento.

“We don’t have anything like that,” says Carol Baker, public affairs director for First5 Los Angeles, referring to San Francisco’s questionable programs. L.A.’s programs, she says, include preschool for children in low-income areas, dental services, medical tests, health insurance and water safety courses – “not synchronized swimming.”

First5 L.A. is sitting on an unused $860 million.

“This is different than the way the state does business,” Baker says. “With the state, it’s money in, money out. We’re engaged in a long-term financing strategy. We can’t operate like the state does and say, ‘We don’t know whether we’ll have funding for you next year.’ ”

But the state has a desperate need for any money right now. And First5 officials realize it. They’re being pressured by county supervisors who expect to lose rations from Sacramento.

“We want to be part of any budget solution,” Baker says.

First5 all over California is exploring how to legally soothe the pain of state cuts by expanding programs for young children.

Meanwhile, Cox is asking the Legislature to place a measure on the November ballot that, he says, would ask voters, “Is this really what you had in mind?” with Prop. 10.

He’d divide most of the stockpiled money among schools, counties and cities. The state’s general fund would seize $367 million for children’s healthcare and deficit reduction. The annual $580-million tobacco tax take would be diverted to state programs for child healthcare and Medi-Cal.

You’d think Democratic leaders – in search of tax dollars – would be interested in discussing this. Instead, they’re dismissing it as just another Republican idea.

 george.skelton@latimes.com