May 16, 2012 (Sacramento, CA) — In California, a pending ballot measure to raise tobacco taxes is being scrutinized by citizens. The initiative, Proposition 29, proposes a $1 tax increase for cigarettes as well as tax increases for premium cigars and pipe tobaccos.
The initiative proposes to create a committee of bureaucrats who will manage the supposed $735 million dollars a year that Prop. 29 will raise. Of that $735 million, hundreds of millions every year could go to out‐of‐state and for‐profit corporations, while up to $125 million is earmarked to pay for salaries, buildings/real estate, and other administrative costs.
However, there is a surprising amount of discretion left to these bureaucrats and how they will spend the money. For one, none of this money will go to public schools, even though in California there is a voter-approved constitutional amendment that requires new taxes to help fund education. None of the money will go towards alleviating the states’ $16 billion budget deficit, either. The research money may not even stay in California, as there is nothing that requires it to be spent in the state or even in the county.
Also, the proposition cannot be touched for 15 years. The governor and legislators are prohibited from making changes to it, even in the case of waste or mismanagement.
This proposition will potentially create a $735 million vacuum that takes money away from California citizens and redirects it at the committee’s discretion. This smash-and‐grab approach to taxation simply cannot be tolerated. At the end of the day it is taking money from California citizens without the requirement that it be spent in California. If the money is coming from the pockets of California citizens, it should stay in California. If this were a universal tax, it would never be allowed to be spent outside of the state.
Proposition 29 boils down to a poorly thought-out initiative that, at its core, is a fundraising project with no accountability. It will raise tobacco prices across the board and give the money to a bureaucratic council with no obligations to the state or the taxpayers. Rather, their obligations will be to their affiliated universities and for-profit partners, all lining up to get their check.
The proposition will be up for vote on June 5th.