HEALTH CARE: The Tobacco Tax Act of 2006 would increase California’s tobacco tax to fund children’s health insurance and other state health care programs.

Public Interest Issues Abound On November Ballot

From political reform to cigarette taxes, Californians have a lot of decisions to make on the 13 ballot initiatives they will confront on the November ballot. Below, CALPIRG advocates offer analyses of three of the top public interest issues on the ballot.

Proposition 86
The Tobacco Tax Act
Prop. 86 will increase California’s cigarette tax by $0.13 per cigarette ($2.60 per pack) and use the revenue generated to fund a wide array of health related programs.

California’s current tax rate of $0.87 per pack ranks the state 24th in the country for cigarette taxes. While 42 states have increased their tobacco taxes since 2002, California’s tobacco tax has not increased since 1999.

Tobacco-related illnesses and deaths are significant contributors to the cost of health care for all Californians. According to the most recent estimates from the California Department of Health Services, the direct health care cost of smoking in California is $8.6 billion per year. When indirect costs like lost worker productivity are figured in, the total reaches $15.8 billion.

Roughly 53 percent of the expected $2.1 billion in revenues generated by Prop. 86 will go to health care treatment programs. This includes paying hospitals and doctors for the currently uncompensated emergency care they provide to the uninsured and providing funding for nurse and physician education as well as for smoking cessation programs and prostate cancer services.

Approximately 42 percent of the funding will go to disease prevention and children’s health insurance programs. The initiative would ensure that all uninsured California children under age 19 have access to affordable and comprehensive health insurance. Additionally, it would provide funding for tobacco prevention, education and enforcement programs as well as cancer, heart disease, asthma and other disease prevention and control programs.

The remaining 5 percent of the revenues will fund tobacco-related disease and cancer research.

Supporters of Prop. 86 argue that, in addition to funding important health care programs, the increased tobacco tax will reduce underage smoking. A recent analysis from the California Department of Health Services estimates that the Prop. 86 tax will prevent more than 700,000 children now under the age of 17 from becoming smokers.

Prop. 86 is supported by a number of children’s advocacy organizations as well as the American Cancer Society, the American Heart Association, the American Lung Association and CALPIRG.

	CLEAN ALTERNATIVE ENERGY—The Clean Alternative Energy Act would tax oil companies who drill for oil on California land. The goal of the Act is to reduce California’s gasoline consumption by 25 percent by creating a $4 billion fund to promote clean, alternative energy and fuel sources.

Proposition 87
Clean Alternative Energy
The Clean Alternative Energy Act will tax oil companies who are drilling for oil on California land and use the funds for clean energy development. The goal of the initiative is to reduce consumption of gasoline in California by 25 percent over the next ten years by creating a fund for clean, alternative energy development.

California has the third highest amount of oil production in the country. However, unlike Alaska, Louisiana, Texas and the other major oil producing states, California does not require oil companies to compensate the public for the natural resource they are extracting.

Especially over the last year, as worldwide oil prices increased, the oil companies’ profits have grown dramaticallly while consumers are paying record-high prices at the gas pump. In 2005, oil companies took in over $108 billion in profits.

Prop. 87 will tax oil companies between 1.5 percent and 6 percent for the oil they take from California lands. The tax will increase with the price of a barrel of oil, so when oil prices are low, the tax will be a nominal 1.5 percent, but when oil prices are hovering at over $60 a barrel and channeling record profits to oil companies, such as they are now, the tax will increase to up to 6 percent. Because oil prices are set on the global market without regard to regional and local costs, the tax is expected to have no effect on gasoline prices.

In fact, the tax will benefit Californians. Supporters estimate that the tax revenues will put $4 billion toward clean energy development over the next ten years. Because California is currently the second highest consumer of gasoline in the world, Californians will significantly benefit as we reduce our dependence on oil in favor of clean, home-grown energy.

The money raised from the oil tax would go towards research, commercialization and training for clean energy development. The funds will also provide direct incentives to consumers who buy cleaner vehicles, and support public education for clean alternative fuels and vehicles. The funds will be distributed over the next ten years through an independent board made up of people appointed by specified elected officials.

Organizations that currently support Prop. 87 include Environment California, American Lung Association, Sierra Club, Public Citizen, Natural Resources Defense Council and CALPIRG.

Proposition 89
Clean Money & Fair Elections
When oil, tobacco and pharmaceutical companies spend millions of dollars to defeat public interest measures on the ballot and millions more to influence the outcomes of candidate elections, regular California voters become less relevant than those writing the big checks.

That’s not the way our democracy is supposed to work.

It’s supposed to be a government of, by and for the people. Voters are supposed to be paramount in our American democracy. Although we know that big money corrupts our elections, we still aspire to have a system true to our ideals. Our belief in a better democracy is shaken but still endures even after reading newspaper stories about disgraced lobbyist Jack Abramoff or imprisoned U.S. Rep. Randy “Duke” Cunningham.

It’s this belief in a cleaner and fairer system that leads CALPIRG to support Prop. 89, the Clean Money and Fair Elections act. If passed by voters in November, Prop. 89 would set meaningful campaign contribution limits and create a system of public financing for elections.

The idea has worked in Arizona and other states, and it’s high time we give it a shot here.

Here’s how it works. If voters pass Prop. 89, a candidate could choose to run a clean money race. He or she would then need to collect a requisite number of $5 contributions to show a base of public support. A candidate for governor, for example, would need to receive $5 contributions from 25,000 California voters, at which point the candidate qualifies for the public funding to run for office.

The campaign funding would come from a 0.2 percent increase in the corporate tax rate.

Those candidates who forego the public financing plan would receive money from private interests just like today’s candidates. The difference is that Prop. 89 imposes meaningful contribution limits on these candidates. A candidate for the Assembly, for example, could take a contribution of no more than $500 from an individual, corporation or union.

Finally, Prop. 89 puts in place tough penalties for candidates who cheat the system. Enforcement officials can remove violators from office and bar them for up to five years from elective or appointed office.

CALPIRG urges a yes vote on Prop. 89, which is also supported by the California Nurses Association, the League of Women Voters, California Common Cause and others.