With California voters poised to vote next week on a tobacco tax hike, a new federal study concludes that the state has used relatively little of the billions of dollars in tobacco money it already takes in to prevent kids from smoking or to help smokers quit. Between 1998 and 2010, just 6 percent of the money collected from a massive lawsuit settlement and from cigarette taxes went to tobacco interdiction and education programs, the national Centers for Disease Control and Prevention reported last week, far below federal spending guidelines for effectively curbing tobacco use.
The report has provided fuel for both sides of the pitched debate over a June 5 ballot measure that would more than double the state tax on a pack of cigarettes. The money would pay for tobacco-related disease research and anti-smoking programs and go to fight illicit tobacco sales. Proponents such as American Cancer Society lobbyist Jim Knox say the CDC report underscores why voters should support Proposition 29 – to lock in money for anti-tobacco efforts, improve public health and ultimately save lives. The measure would bolster proven anti-tobacco programs that are woefully underfunded but remain a "model throughout the nation and the world," Knox said. Beth Miller, a spokeswoman for the tobacco industry-backed No on Prop 29 campaign, said the CDC study just proves government can't be trusted with more tobacco tax money.
She compared the ballot measure to others that funded controversial state projects, such as high-speed rail and stem cell research. "It's not hard to see this measure is headed down the same path of exorbitant salaries, high-priced consultants and more wasteful government spending," Miller said. From 1998 through 2010, California collected nearly $22 billion from a lawsuit settlement with tobacco companies and from cigarette taxes, according to the federal report. It appropriated $1.3 billion, including state funding and federal grants, for tobacco prevention and cessation programs during that period. In 2010, California spent about $79 million on anti-tobacco efforts, about 18 percent of what federal guidelines recommend spending to have a significant impact on public behavior.
California's experience reflects a national trend that shows states and local governments have used tobacco-related revenues for just about everything but curbing tobacco use. In the 13 years that ended in 2010, states collected nearly $244 billion in cigarette taxes and settlement cash and appropriated just $8 billion for tobacco control programs, less than one-third the $29 billion the CDC says should have been spent. A 1998 settlement with the tobacco industry promised California would receive $25 billion over 25 years, split evenly between the state and counties. It's received a little over $10 billion so far, according to the California attorney general's office. The terms of the settlement left it to governments how to spend the money. Locals have used their share for a range of projects, from fixing sidewalks to adding juvenile hall beds.
California lawmakers in 2003 used the tobacco industry payments as collateral on bonds to help close the state's general fund deficit. "California gave away all its (tobacco) settlement agreement money. None of it went to tobacco control. It should have," Knox said. California cigarette excise taxes are currently 87 cents per pack; 50 cents of that goes to early childhood development programs and 10 cents to the general fund. The remaining 27 cents is earmarked for tobacco education and prevention, health care services and research, according to a state analysis. The state Department of Public Health said last year that the adult smoking rate dropped to a record low of 11.9 percent, down from the 27.7 percent in 1985.
Proposition 29 would add another $1 per pack for cigarettes and other tobacco products. It sets up a new state-run trust fund and oversight committee devoted to cancer and other tobacco-related illness research, education and prevention programs and to fighting smuggling and illegal tobacco sales. The tobacco industry has poured millions of dollars into a campaign to defeat the measure, and public opinion appears to be turning against it. Two recent polls by the nonpartisan Public Policy Institute of California show the percentage of voters likely to support the measure has fallen from 67 percent in March to 53 percent this month.
Miller said that the public mood is shifting because voters recognize Proposition 29 doesn't address the state's budget deficit while adding an "unaccountable commission" free to spend as it sees fit. Knox, the cancer society lobbyist, denied that the measure would create a burgeoning bureaucracy, saying it would "rejuvenate" current programs starved for money. "(The programs) have already proven immensely successful in driving down smoking," Knox said.
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