​(May 2, 2012) California Chamber of Commerce Vice President of Government Relations Marc Burgat yesterday highlighted problems with Proposition 29, the tobacco tax measure on the June ballot.

Proposition 29, opposed by the CalChamber, imposes an additional $1 per pack tax on cigarettes and an equivalent tax increase on other tobacco products to fund research for cancer and tobacco-related diseases.

“While on the surface this may sound like a good idea, we believe that now is exactly the wrong time to be creating a new government program, especially on a declining revenue source when we can’t afford to pay for existing critical programs,” Burgat said at a  joint hearing of the Assembly Health and Assembly Revenue and Taxation committees.

More Opposition

During his testimony, Burgat referred several times to the April 27 Los Angeles Times editorial opposing Proposition 29, highlighting the many flaws in the measure.

Burgat reminded the joint committees that Proposition 29 is estimated to raise nearly $1 billion in new taxes, but nothing in the measure requires the funding to be spent in California or even in the United States.

He cited the Times editorial as right on point in explaining that despite Proposition 29’s intentions, “…it just doesn’t make sense for the state to get into the medical research business…when it has so many other important unmet needs.”

Although there is a statement of intent in Proposition 29 language saying that money raised by the initiative should be used to fund research in California, “there is no mandate to keep it from going to research projects out of state,” the Times points out.

Burgat also shared his concern that Proposition 29 circumvents the intent of Proposition 98, which guarantees a minimum percentage of revenue in the General Fund to be used for schools, by creating a special trust fund for the revenue, rather than making it a part of the General Fund. California schools have already faced more than $20 billion in cuts over the last four years and Proposition 29 will shortchange California’s K-12 programs by more than $300 million.

“This gimmick ensures that none of the tax revenue collected under Prop 29 will ever go to schools,” Burgat told the joint committee.

Burgat also reiterated the concern of the Times that voters also should be alarmed about the lack of accountability under Proposition 29.

The initiative creates a new bureaucracy with representatives from three University of California campuses and three members from the state’s federally recognized cancer centers, a physician from an academic medical center and two members from advocacy grounds, but it will have no one representing the public. 

The editorial points out that there is “no one to stand up for the idea that taxpayer money should be spend efficiently and fairly, to ensure that salaries aren’t exorbitant and that money doesn’t get sent out of state….”

In conclusion, the Times says, “…this initiative takes perfectly good tax money and misspends it…We recommend a no vote on Proposition 29.”

Burgat concluded his testimony by telling the committees that “California needs to focus its priorities and scarce resources on the state’s most pressing issues, including funding for education, health care and the courts. If we are going to increase the tax burden on Californians, we need to address the programs that matter most to California.”

Editorials opposing Proposition 29 also appeared in The Orange County Register and The Press-Enterprise on May 1.

For more information on the June 2012 ballot measures, visit www.calchamber.com/ballot.