Panel OKs Bills on Use of Prop. 99 Funds

With Republican support, lawmakers on the Senate Health and Human Services Committee on Wednesday passed three key bills opposed by Gov. George Deukmejian that are aimed at dividing up much of the money raised by Proposition 99, the tobacco tax initiative.

With each of the bills getting a unanimous vote, legislators moved a step closer to an open clash with the Republican governor over how to spend the estimated $625 million that is expected from Proposition 99 during the upcoming budget year.

The three bills acted upon Wednesday are part of a legislative package put together by Coalition for a Healthy California, sponsors of the initiative measure approved by voters last November. In all, about 40 different bills have been introduced aimed at implementing various parts of Proposition 99.

Proposition 99 raised the tax on cigarettes 25 cents a pack and imposed comparable tax increases on pipe tobacco, cigars and other tobacco products. During the first three months of the year, $142.2 million in Proposition 99 tax revenues was collected, according to the State Board of Equalization.

None of the money can be spent until the governor and Legislature reach agreement on how the funds will be distributed.

Deukmejian in January proposed spending the bulk of the money to finance ongoing state health, recreation and other programs.

Critics, including a number of Republican legislators, attacked the governor’s plan as possibly illegal and argued that it violated the spirit of Proposition 99. The initiative specifically called for the money to be spent on smoking-related health and education programs. There was a provision saying that the money was not to be used to replace state budget dollars already being spent on programs.

One of the measures approved Wednesday, by Sen. Diane Watson (D-Los Angeles), chairwoman of the committee, calls tobacco use “the single most important source of preventable disease and premature death in California.” The bill would appropriate between $120 million and $150 million annually to anti-smoking education campaigns. It passed on a 6-0 vote.

Hospital Funds

Another bill, by Sen. Barry Keene (D-Benecia), would appropriate $324 million over the current and upcoming budget years to hospitals to help defray the costs of providing care to indigent patients. It was approved 7 to 0, with two Republicans joining five Democrats in voting for the measure.

Proposition 99, supported by the California Medical Assn. and other health organizations, provided that a share of the tobacco tax receipts go to doctors and hospitals to help defray health costs.

The third bill to receive approval, appropriating $65 million annually to reimburse physicians who treat indigent patients, is being carried by Sen. John Seymour (R-Anaheim), one of the GOP lawmakers who believes that the governor’s proposal violates the spirit of Proposition 99.

Seymour said the bill, which passed 7 to 0, “just codifies in statute what was intended by Proposition 99.”

Sen. William Campbell (R-Hacienda Heights), one of two Republican members of the committee who voted for the bills, said Deukmejian still has not entered the negotiations on Proposition 99.

“We are just kind of treading water right now,” Campbell said. “The governor always has the ability to veto anything we do, so obviously he holds the blue chip down there.”

The other Republican voting for the bills was Sen. Edward R. Royce of Anaheim.

So far, state officials are uncertain over just how much money will be available as a result of the tobacco tax increase.

Originally, budget writers expected Proposition 99 to generate about $300 million during the last six months of the current fiscal year, which ends June 30. But word filtering out of the Board of Equalization is that the estimate was too optimistic, and state officials now expect to receive less than $300 million.