Cigarette Tax Initiative: More Ballot Box Budgeting

Joel Fox
Editor of Fox & Hounds and President of the Small Business Action Committee

Former state senate president pro-tem Don Perata, bicycle racing champion Lance Armstrong and Los Angeles Mayor Antonio Villaraigosa kicked off their campaign for a new cigarette tax initiative in Los Angeles yesterday. Unfortunately, it is another example of ballot box budgeting in which revenues are limited for specific purposes with little oversight from outside agencies.

Multiple ballot measures directing how tax dollars can be spent have taken away the ability of the legislature to respond to changing fiscal problems. In fact, one item Governor Jerry Brown wants to see on a special election ballot this summer is a measure to ask voters to take a billion dollars from a segregated tobacco tax fund for childhood development that the voters created by initiative in 1998 and place it in the general fund to deal with the budget deficit.

The new tobacco tax initiative has qualified for the next ballot, whether that is Brown’s special election or a later scheduled election if the special election does not come off. The initiative proponents want to get an early jump on the campaign in case there is a special election.

The new $1 a pack cigarette/tobacco tax would be designated for cancer research, anti-tobacco advertising, a building fund and administration to oversee the use of the money, which is expected to gross about $850 million a year. As with other ballot box funding mechanisms, the legislature would not be able to touch the money despite other needs in the state.

Currently, California smokers pay 87-cents tax per pack of cigarettes, so the new tax amounts to a 115% increase.

Ironically, Perata is leading this charge for a new segregated fund when he knows quite well the difficulty ballot box budgeting imposes on the legislature. Two years ago, he told Ina Jaffe of National Public Radio “If representatives don’t have the power of the purse, you can’t make policy, you can just talk about it.”

No one is arguing that the goal of the initiative is a good one. But good causes can prove roadblocks to good governance. Just ask Perata who commented later in the NPR piece about the school funding mandate, Proposition 98: “Good cause, but when you start tying all that up, you have very little maneuverability. And when people want you to respond to their needs and you can’t, they don’t understand why, and it accounts for the gridlock that’s up there now.”

With California’s budget in a mess, Perata’s new initiative will add to the sense of gridlock.

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