Last Wednesday, CCAGW issued a press release blasting Proposition 29, a ballot initiative in California’s primary election that would place a $1 levy on packs of cigarettes.  Among the reasons for CAGW’s opposition was the almost unbelievable requirement that none of the revenue generated by Prop 29 go toward reducing California’s massive budget deficit.

At the time of the release, California’s budget situation looked bad enough.  In April, Bloomberg Businessweek reported that the deficit there would likely climb to $10.2 billion, up from the $9.2 billion previously estimated.  Then on Saturday, May 12, things got much, much worse when Gov. Brown released a YouTube video declaring that those estimates were low by almost 60 percent.  It turns out that California’s deficit has ballooned to a whopping $16 billion, making it even more ridiculous to propose a new tax devoted to a single purpose.

Unfortunately for Californians, Prop 29’s flaws do not end with the fact that it will not lower their state’s deficit.  While the estimated $735 million raised by Prop 29 would be slated for cancer research funding, the vessel that would deliver those funds is already looking leaky.  The measure would create a new state commission, which will manage the research funds and be governed by a nine-member board comprised of university, cancer center, physician and advocacy group representatives.  These appointees will be handed $110 million annually for office space and facilities, plus an additional $15 million for consultants, salaries, and travel.  Prop 29 also prohibits the governor, legislature, and even the state auditor from making changes to the initiative for 15 years, even in the case of fraud or waste, and there is no requirement that the money be spent in California, so Californians may end up funding projects and creating jobs in other states at their own expense.

After all, it’s not as though California has yet to feel the effects of its troubled fiscal condition.  As the Los Angeles Times pointed out on April 27, California “can’t afford to retain its K-12 teachers, keep all its parks open … or provide adequate home health aides for the infirm or medical care for the poor.”  In a May 13 editorial, the Los Angeles Daily News pointed out that California’s deficit has already resulted in “teachers being laid off by the thousands and education funding being slashed at all levels.”  These facts raise an important question, one that was articulated perfectly by the Daily News: “If state officials think they can raise $700 million this easily, why not put the revenue toward reducing the general budget deficit?”  Surely there are priorities more pressing than cancer research, which is already funded by the federal government to the tune of $6 billion each year.

Taxpayers in any state should always be skeptical of new schemes to swell government coffers, especially when they are billed as being in taxpayers’ own best interests.  In California, the deficit was big enough a week ago to make Prop 29 look like a bad idea.  Now that the shortfall has gone from gaping to downright cavernous, it looks reckless.

Filed under: Budget, Deficit, Taxes