Big Tobacco Wins, Kids and Taxpayers Lose as California Budget Slashes

For Immediate Release

Contact: Tony Iallonardo, tel: 202-296-5469

WASHINGTON, DC -- Governor Gray Davis and the California Legislature have done the tobacco industry a favor and cheated the state's kids and taxpayers by agreeing to a budget that slashes funding for the state's highly successful tobacco prevention program and fails to increase the cigarette tax. With this shortsighted budget, California will cease to be the nation's leader in tobacco prevention, and the state will pay a high price as a result. More kids will become addicted to tobacco, more lives will be lost and taxpayers will pay more to treat smoking-caused disease. We urge California's leaders to reverse course by increasing the cigarette tax and using some of the revenue to restore funding for tobacco prevention.

This budget delivers three strikes against California's tobacco prevention efforts. First, it cuts funding for the state's tobacco prevention program by $61 million, or 45 percent. With these cuts, California will be spending less than half the minimum amount the U.S. Centers for Disease Control and Prevention recommends the state spend on tobacco prevention. Second, this budget trades billions of dollars of future tobacco settlement payments for a much smaller lump sum payment up front. This is a one-time budget gimmick that only postpones tough choices and will leave the state with far less tobacco settlement money for tobacco prevention and other purposes in the future. Third, the Legislature bowed to the dictates of a small minority of lawmakers doing the bidding of the tobacco industry and failed to increase the cigarette tax, a solution proven both to reduce smoking and to raise much-needed revenue.

It is incomprehensible that California's leaders would slash the state's tobacco prevention program in light of the many health and fiscal benefits it has delivered. The number of adult smokers in California has declined by more than one million since the state's voters approved the program in 1988. From 1994 to 2000, smoking among the state's 12 to 17 year olds declined by 35 percent. Studies have shown that California's program has saved thousands of lives by reducing smoking-caused heart disease and lung cancer and the state is saving more than $3 in smoking-caused health costs for every dollar spent on tobacco prevention. California's leaders have failed to learn the lesson of the mid-1990s when the state last cut funding for tobacco prevention. At that time, the state's progress in reducing smoking rates stopped until funding for its program was partially restored, and the same is likely to happen again.

California's leaders have chosen to cut tobacco prevention and squander future tobacco settlement money despite having before them a far better solution -- increasing the state cigarette tax. After publicly advocating a cigarette tax increase, Governor Davis and legislative leaders allowed a handful of legislators to block the proposal and deliver a victory to the tobacco industry. A cigarette tax increase would have been a win-win-win solution for the state -- a fiscal win that raises revenue, a public health win that reduces smoking and related health care costs, and a political win that is popular with voters. It's unlikely that this new budget will resolve California's budgetary problems for long, and the state's leaders should revisit the cigarette tax increase at the earliest opportunity and join the other 18 states that have increased their cigarette taxes so far this year. It's not too late to do the right thing for the state's kids and taxpayers.

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