California is known for trend setting such as ham and pineapple pizza and surfing. Unfortunately, California is also becoming known for other trends, ballot propositions. One of the latest propositions, Proposition (Prop) 29 might be a wolf in sheep’s clothing. If the proposition passes California’s tobacco tax will increase by $1.00 per pack, making the total tax $1.87 per pack. The additional revenue is supposed to be used for cancer research, smoking reduction programs, and tobacco law enforcement. In reality, the additional revenue will be used to expand an already bloated bureaucracy and do nothing to help the state out of its financial mess. The federal government already spends $6 billion a year on cancer research and any research on a serious disease like cancer should be coordinated at the national level rather than a patchwork of research done at the state level.
With a debt of $10 billion, California has serious financial problems and California legislators are looking for any bit of tax revenue to close that gap. Prop 29 will bring in more than $700 million annually, yet none of that money will be used to close the budget deficit. Such tax increases drive purchases across state lines or to untaxed or lower-tax venues, like Native American territories and the Internet. This shift would cause California retailers to lose revenue and those losses would become even more pronounced given that cigarette purchases are often bundled with other items, such as food and beverages.
In addition to the fantasy-like revenue projections, Prop. 29 would create a new unaccountable state bureaucracy filled with political appointees. And this is where the fun begins for the appointees (and definitely NOT taxpayers). The newly-created Commission will be able to spend an estimated $15 million on staff salaries and overhead annually. In addition, Prop. 29 allows a whopping $110 million annually to be spent on buildings and equipment. There is absolutely no requirement that the money be spent with California hospitals or universities making it possible that tax money will be given to for profit corporations. If the projected revenue doesn’t come in, there are no provisions to make sure that the state pay less on staff and salaried and buildings and equipment. The less revenue that comes in, the higher the percentage of the money goes to overhead.
Californians have seen first hand what can happen after ballot initiatives that expand bureaucracy are passed. According to a December 12, 2011 op-ed by Theresa Casazza, President of the California Taxpayers Association, in the Los Angeles Business Journal, “We’ve seen firsthand what happens without proper oversight of, and checks and balances on how taxpayer dollars are spent on government programs. Just recently, the Los Angeles Times reported that an independent audit of First 5 LA, a local agency created as a result of a past initiative, revealed a ‘lack of transparency, accountability and competitive bidding.’” Casazza continued, “Consider that the executive director of First 5 LA, who was forced to resign in the wake of the withering audit, will receive an expensive severance package that includes a one-time payment of her annual salary, health benefits and vacation time that’s expected to exceed $240,000.” The same could easily happen with Prop 29.
Everybody supports cancer research, but Prop 29 is a scam on California consumers and taxpayers. Prop. 29 is a thinly veiled attempt to raise taxes to create a new unaccountable bureaucracy. There are no taxpayer safeguards to ensure the wise expenditure of any the funds collected.
It is time to unmask Prop 29 for what it really is, a wolf that is ready to gobble up tax dollars with little accountability or guarantee that the money won’t be wasted. California taxpayers deserve better.