State Plans to Tighten Control of Tobacco Tax Funds

State officials on Tuesday unveiled a plan to strengthen oversight of $600 million in annual tobacco tax funds intended for early childhood development programs.

The proposed reforms are in response to a state audit that found problems with the practices of some of the county First 5 commissions, which administer the funds.

Auditors found that some panels did not cap administrative spending, while others lacked policies for awarding contracts or defining conflict of interest.

For example, auditors found that the Los Angeles County commission did not provide data indicating whether its projects were having a positive effect.

The proposed legislation would require counties to perform more thorough financial and performance audits, streamline contracting practices and detail employee compensation policies. It would also require an audit of county commissions by the state controller every three years.

The measure is to be introduced in the Legislature in January by Assemblywoman Wilma Chan (D-Alameda), who was joined at a news conference in Oakland by movie producer and First 5 California Commission Chairman Rob Reiner.

In 1998, Reiner spearheaded the campaign for passage of Proposition 10, which imposed a 50 cents-per-pack tax on cigarettes to fund education, health, child care and other programs for children up to age 5.

“These are things that we should have put into the legislation anyway,” Reiner said. “It puts real teeth into the act in terms of accountability.”

But First 5 Los Angeles officials said their panel already has tight administrative controls.

Auditors praised the Los Angeles County commission’s commitment to spend nearly $700 million over the next five years on a preschool program for all county 4-year-olds and universal healthcare for young children.

“It seems like the so-called reforms are adding a layer of bureaucracy,” said Evelyn Martinez, executive director of the First 5 Los Angeles commission.

“If we’re going to have to get approval from the state commission for every little thing, [our projects] are going to move like molasses.”