Perata's cigarette tax measure finds First 5 foes

Fresh out of the gate, a ballot measure to raise cigarette taxes for cancer research proposed by former state Senate President Pro Tem Don Perata is taking heat from early childhood education advocates who rely on tobacco taxes, too.
Perata — a 2010 Oakland mayoral candidate — had hoped this California Cancer Research Act, launched at a news conference Monday, would garner good publicity and widespread public support as a war on Big Tobacco. Instead, some say, it could end up facing united opposition from tobacco companies and the education advocates who warred with them 11 years ago.
California law already called for a cigarette tax of up to 12 cents per pack, paid into the state's general fund, by the time voters approved Proposition 99 of 1988, which added a 25-cent-per-pack tax to fund tobacco-related health education and disease research, hospital care for the indigent, park and wildlife restoration and other causes.
When producer, actor and director Rob Reiner put his successful Prop. 10 on the ballot in 1998 — a 50-cent-per-pack tax to fund early childhood education via a new "First 5 California" bureaucracy — he included a "backfill" provision. This required the state to compute how much the new tax would reduce cigarette sales, and transfer a cut of the new Prop. 10 revenue to offset the decrease in Prop. 99 and general fund revenue.
Perata's proposed measure includes a backfill provision for Prop.99 and the general fund but not Prop. 10, so this new $1-per-pack tax would drain tens of millions of dollars from early childhood education across the state by suppressing cigarette sales with out replenishing Prop. 10 losses, Prop. 10 campaign manager and longtime Reiner political consultant Chad Griffin said Tuesday.
That won't sit well with education advocates, labor unions and others who backed Prop. 10 against tobacco companies' $30 million campaign onslaught, he said.
"Unless this is corrected, and hopefully this was a mistaken omission and can be refiled quickly ... I think you'd see a wide coalition of people including Rob Reiner and children's health and education groups across the state actively opposing something that ideally we'd be supporting," Griffin said — a big problem for the measure "given the unity needed to beat Big Tobacco" next year.
But the omission was no mistake.
"While we admire and support the goals of First 5, we had to recognize as we put this initiative together that we're living in an era of limits, where only one in 10 promising research proposals is getting the funding it needs," said longtime Perata campaign consultant Paul Hefner. "We came down on the side of providing the greatest possible support for research that will save lives and protect Californians, and we think our proposal made the right call."
The Prop. 10 cigarette tax now generates about $500 million per year, and some critics have accused First 5 California and its 58 county counterparts of sitting on or mismanaging much of that while many state programs fall to the budget-cut ax. Still, 66 percent of voters in May's special election rejected Prop. 1D, which would've redirected $1.7 billion of Prop. 10 revenue into the general fund over five years.
"I have absolutely no issue with a tobacco tax initiative to support tobacco related illness ... That is not the issue at all, and I don't want to be seen in a kids-versus-cancer scenario," First 5 Contra Costa Executive Director Sean Casey said Tuesday. "But there is a time-honored practice when an initiative is put forward to honor the previous initiatives that may be affected by it."
His commission expects about $9.4 million in Prop. 10 tax revenue this year, anticipating a 5 percent to 8 percent reduction from last year because of a 60-cent-per-pack federal cigarette tax increase that took effect in April. An additional $1-per-pack hike from Perata's measure, he assumes, could mean another hit of up to 10 percent.
Casey said his agency just finished developing a five-year, $70 million strategic plan to fund services from community resource centers to home visits for mothers of newborns to scholarships for early preschool. That plan draws down savings put away in earlier years of Prop. 10 funding, in anticipation of the gradual and predictable decline in smoking — a prediction that could be rendered useless by the new tax measure.
"We will feel it in Contra Costa, it will be real, and this is just not the time for that," Casey said.
Perata said Monday he expects tobacco companies will "empty the vault" to oppose this measure. Spokesmen for tobacco giants R.J. Reynolds and Philip Morris voiced their opposition later Monday, and the California Taxpayers Association and the Howard Jarvis Taxpayers Association said they'll probably oppose it, too.