Fair Shares of Treasure

The increased tobacco tax, so wisely voted last November by an overwhelming majority of California voters, has yet to be spent on any of its urgent purposes in the realm of health care and education. And a joint Assembly and Senate committee of the state Legislature has postponed until next month a renewal of frustrating and fruitless negotiations to change the situation. Nearly a year will have passed before the tax can begin to do the good works for which it was intended.

There is no easy way to parcel out the blame. Gov. George Deukmejian initiated the train of negative events when he tried to raid the tobacco tax revenue to replace income from other state taxes that would then be freed up for spending on different programs, a move expressly prohibited by the initiative. Legislative leaders themselves geared up for a similar raid, in defiance of the wishes of the electorate, until windfall revenues spared Sacramento the pain of some of the most difficult budget cuts. The original sponsors of the initiative were not always helpful as they fell to wrangling over the division of the treasure.

It is some treasure. The tax has raised almost $300 million in the first six months of the year and will contribute about $600 million in revenue in the fiscal year that began July 1.

There is room for discretion in carving up the pie. Under terms of the initiative, only broad guidelines are provided: 20% for tobacco-related health education, 5% for tobacco-related research, 35% for hospital services to the poor, 10% for physician services to the poor, 25% unallocated to supplement other authorized areas of the program and 5% for public resources projects such as fire prevention and park improvements.

Two priorities emerge: There must be respect for that section of the initiative asserting that the funds “shall be used to supplement existing levels of service and not to fund existing levels of service,” and children’s programs should dominate in all spending sectors, with at least $100 million a year earmarked to help the 1.8 million children in the state without any health insurance.

Some of the key sponsors of the initiative have played with an initiative next year to amend the education allocation of 20% so that the money can be spent in the other areas, perhaps even to subsidize a state health insurance program. The idea of cutting tobacco education funds won immediate approval from the tobacco industry that promised substantial funds to qualify the initiative. Fortunately, this silliness has now subsided. Indeed, there is provision in the original proposition to amend the plan with a vote of three-fourths of the Legislature, if that proves necessary. This is not the time to tinker. This is the time to test the initiative fully as voted.

Legislators hope to work out the geometry of slicing the $900-million pie in mid-August. The voters who supported this constructive tax plan will be watching. So will the health-care providers whose services are struggling while the new tobacco tax revenues pile up in the state treasury, unspent.