April 27, 2012

What's to like about taxes? Most people view them at best as a necessary evil to help pay for robust government services — a public benefit. But cigarette taxes are an anomaly. In their case, the tax itself is a public benefit. Proposition 29, which would place a $1 levy on each pack of cigarettes sold in California, would serve the common good by making cigarettes more expensive.

Economists have demonstrated conclusively that taxes on cigarettes are an effective tool for reducing smoking rates, which not only benefits the health of current and potential smokers but clears the air for people who would otherwise be exposed to secondhand smoke. Smoking, the single biggest cause of premature death in the United States, costs California taxpayers billions annually in medical care to treat people with tobacco-related diseases through Medi-Cal, Medicare and other public health programs. And California's cigarette tax, at 87 cents per pack, is well below the national average of $1.46.

Nevertheless, we oppose this ballot measure. The problem with Proposition 29, which would raise $735 million a year at the outset (gradually dropping off as more smokers quit), isn't the tax but how the money it raises would be spent. Most of it, more than $500 million a year, would be directed to a new, independent quasi-public agency that would award grants for research on cancer and other smoking-related illnesses, such as heart and lung diseases. (The research itself would not need to be tobacco-related; a grantee could study, say, the effects of obesity on heart disease, or malignant melanoma caused by overexposure to the sun.)

Proposition 29 is well intentioned, but it just doesn't make sense for the state to get into the medical research business to the tune of half a billion dollars a year when it has so many other important unmet needs. California can't afford to retain its K-12 teachers, keep all its parks open, give public college students the courses they need to earn a degree or provide adequate home health aides for the infirm or medical care for the poor. If the state is going to raise a new $735 million, it should put the money in the general fund rather than dedicating it to an already well-funded research effort. Funding priorities shouldn't be set at the ballot box.

The initiative is clearly modeled on Proposition 71, which eight years ago moved the state into the medical research business in a big way by creating a stem-cell agency with $3 billion in bond funding. This page endorsed that initiative. But at the time, underPresidentGeorge W. Bush, the federal government was shirking its responsibility to properly fund embryonic stem-cell research and was tying the hands of researchers by limiting them to existing, less useful stem-cell lines. In addition, Proposition 71 provided a defined amount of money for research — Proposition 29 would spend far more over the years — and created a structure under which the state and its taxpayers could share in royalties and licenses from new discoveries. It remains to be seen whether the state will reap that supposed bounty, but at least it made sense to hope that California might become a national center for embryonic stem-cell research.

By contrast, cancer already receives more research funding from the National Institutes of Health than any other disease or medical condition. The $5.4 billion a year that the NIH spends on cancer research is augmented by spending from other federal agencies, private donations and corporate research and development. In addition, the NIH spends more than $2 billion a year on research on cardiovascular diseases and $1 billion on lung disease, two other fields eligible for Proposition 29 funding. It's not clear why California should create a new state agency to replicate functions of the NIH.

Another problem with the initiative is that although there is a statement of intent that says that the money should be used to fund research in California, there is no mandate to keep it from going to research projects out of state. And structurally it doesn't make sense either: Medical research benefits everyone in the country — not just Californians — which is why taxpayer money to support it logically comes from the federal government.

Voters also should be concerned about the lack of accountability under Proposition 29. The nine-member board of the new agency would comprise representatives from three University of California campuses and three of the state's federally recognized cancer centers, as well as a physician from an academic medical center and two members from advocacy groups. It would have no one representing the public, no one to stand up for the idea that taxpayer money should be spent efficiently and fairly, to ensure that salaries aren't exorbitant and that money doesn't get sent out of state, among other things. Although there are rules preventing a board member from voting on a grant application from his or her own organization, there is too much opportunity for mutual hand-washing when it comes to awarding funds. This came up as a criticism of the stem-cell agency when, by 2010, nearly $1 billion had been granted to institutions with seats on the board. The tobacco research agency would be audited annually, but what would be the point? The state would be powerless to change the agency's ways even if it found serious problems.

Tobacco companies are contributing more than $20 million to the campaign to defeat Proposition 29, outspending the pro-tax campaign — which is supported by bicycling star and cancer survivor Lance Armstrong — by more than 5 to 1. We couldn't disagree more with their reasons for doing so, and it makes us uncomfortable to agree with them at all, but from our perspective, this initiative takes perfectly good tax money and misspends it; we'd rather see an alternative proposal that hikes the cigarette tax but spends the money more wisely. We recommend a no vote on Proposition 29.

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