Bonus Cigarette Tax Blogging: Why Prop 29 is Such a Terrible Idea

| Tue Jun. 5, 2012 8:55 AM EDT

For my California readers, a bit more on Prop 29 today. This is the initiative that raises taxes on cigarettes by a dollar a pack and earmarks the proceeds for cancer research. I said yesterday that I opposed it because I was generically opposed to ballot-box budgeting, but I probably wasn't clear about what was really objectionable here. However, Michael Hiltzik did it for me while I was off vacationing in Rome:

The real problem with Proposition 29 is its mandate to lock in a huge revenue stream for the narrow purpose of cancer research. That's a worthy endeavor, to be sure, but there are other pressing needs for the money.

Gov. Brown's latest budget proposal calls for cuts of $1.2 billion in Medi-Cal and $900 million in CalWorks (a relief program for families with children) and steep cuts in financial aid for college students and in court budgets. The University of California and Cal State systems are becoming crippled by 20 years of cutbacks in state funding, leading to soaring tuition charges. Tobacco-related illnesses create some of the burden on Medi-Cal and other public healthcare programs, yet a minimal portion of Proposition 29 revenue, if any, would go to helping taxpayers carry that burden.

With the overall state budget gap approaching $16 billion, how can anyone make the case for diverting a huge chunk of $800 million a year in new revenue to long-term scientific research, whether in California or not? Even if you believe that case can be made, the proper place to make it is in the Legislature, where all these demands on the budget can be weighed and balanced against one another — not at the ballot box, where the only choice is to spend it the way the initiative's drafters choose or not to raise it at all.

[Don] Perata rationalizes these provisions by arguing that this is the only way to get a tax measure passed in 21st century California. "I completely agree that the University [of California] is in real jeopardy of losing its reputation," he told me, "but the people who are interested in supporting a tax don't want it to be distributed by the Legislature." This attitude is "killing us," he agreed, but added, "you don't win any campaigns by telling the public they're wrong."

I'm not the world's biggest proponent of sin taxes. They tend to be regressive and, in any case, one man's sin is another man's pleasure. Still, within reason, I don't mind raising cigarette taxes, and if the initiative process is the only way to do it, I could probably hold my nose and vote for Prop 29.

But I'm not interested in earmarking nearly a billion dollars a year of state revenue for cancer research, and you shouldn't be either. In fact, you should be violently opposed. On a proper list of state priorities, it wouldn't rank in the top ten. Probably not in the top 50. Locking in a revenue stream like this forever, to be disbursed by a carefully selected board that's wide open to conflict of interest problems, is a travesty.

Or, as Hiltzik puts it: "The weighing of intention vs. result here is fairly straightforward. Raising $800 million a year for the state: Good. Discouraging smoking via a harsh tax: Great. Sequestering the money for a limited purpose: Bad. Really bad."