Childhood-welfare agency worries proposed cigarette tax increase would reduce funding

SACRAMENTO —  Officials at a state childhood-welfare agency funded mostly through state cigarette taxes expressed concern Thursday that proposed legislation for a $2-a-pack tax increase could ultimately cause funding to drop.

The agency, First 5 California, already is searching for new sources to replace a decline in tobacco tax revenue, the result of fewer Californians smoking and lower cigarette sales.

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FOR THE RECORD: In the July 24 California section, an article about possible effects of a proposed state cigarette tax identified Erin Gabel as the executive director of First 5 California. She is deputy director of First 5 California’s external and governmental affairs division.

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Almost all revenue raised by the proposed tax would go toward education about tobacco, prevention efforts, tobacco-related healthcare and tobacco-law enforcement, largely eclipsing First 5.

George Halvorson, First 5 California chairman, said the agency should be among the beneficiaries of any new tax revenue from such sources as a tax increase on tobacco or a tax on e-cigarettes.

“This is the opportune time to get involved,” Halvorson said at the group’s meeting in Sacramento on Thursday. “We need to argue that point and try to be included.”

The agency also is exploring various proposed ballot measures to legalize the recreational use of marijuana as a potential funding source. Its revenue from the cigarette tax fell from $555.4 million in the 2008-09 fiscal year to $460.6 million in 2013-14 fiscal year.

California currently charges 87 cents a pack in taxes, after the voter-approved law that created First 5 added 50 cents a pack to support early childhood development programs.

A portion of the money covers collection costs and funds breast cancer research and other programs. The rest goes to First 5 to pay for an anti-smoking campaign as well as for education, child-care training, and to early childhood intervention programs.

A coalition called “Saves Lives California” — which includes the California Medical Assn., American Lung Assn. in California and the American Cancer Society Action Network — supports pending proposals for an increased tax. The coalition also is preparing a ballot initiative to raise tobacco taxes in case the bill fails.

First 5 would collect a small portion of any new tax money to make up for a drop in its revenue, because higher cigarette taxes could be expected to further lower tobacco sales.

Erin Gabel, executive director of First 5 California, said there appears to be “a window of receptivity” with the proposals’ supporters to provide more money to the agency to replace any lost revenue. But, she said, but it is “a huge uphill climb.”

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