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The Lawsuit's Aftermath: SB 493 in 1995

Judge Warren could only block money from being spent illegally. He could not order money to be spent as the voters specified; only the Legislature


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could appropriate the funds. Thus, the victory in Judge Warren's court for ANR and ALA/ACS was only the beginning of the battles to be fought in 1995 over the illegally diverted funds. The health organizations had to go to the Legislature for a new bill to restore full funding. They did not, however, publicize their victory in the lawsuit or otherwise use it to bring public pressure to bear on the governor or the Legislature. The court victory was viewed as a new piece of ammunition in the insider game, not as a way to involve the public and get the media to frame the issue as “following the will of the voters.”

Senator Diane Watson (D-Los Angeles), a longtime supporter of Proposition 99, proposed SB 949, which would have appropriated the frozen Proposition 99 funds for legitimate anti-tobacco health education and research in accordance with Proposition 99 and with the court's judgment. While SB 949 was passed by Watson's Health and Human Services Committee, it was stopped in the Senate Appropriations Committee by the same forces that had supported the use of funds from the Health Education and Research Accounts for medical services: the CMA, CAHHS, and the Western Center for Law and Poverty.[32] Meanwhile, the tobacco industry continued to escalate its campaign contributions to members of the Legislature. In 1995-1996 the tobacco industry spent $10,440 per member, twice its U.S. Congress contributions of $5,044 per member.[33]

Rather than accommodating the court rulings, Governor Wilson worked to get around them. He wrote the Legislature urging it to enact new legislation that continued to divert Proposition 99 funds into medical services but which would pass legal muster:

I hope that you will agree with me that neither the executive nor legislature [sic] branches of state government can abide the court's decision to substitute its will for that of the elected representatives of the people of California with regard to the allocation of critical state resources. Indeed, the State has met the very requirements of the proposition to make allocation decisions consistent with the Proposition's purposes and done so with the required 4/5 vote of both houses of the Legislature. I therefore call upon you to establish an appropriate structure for immediate consideration of legislative alternatives to resolve this egregious action by the court so that we may minimize the disruption and loss of medical care to uninsured and indigent persons in California.[31]

Wilson was offended that the court had imposed its will on the state's elected representatives; he did not object to elected representatives imposing their will on the expressly stated mandate of the people. On June 27 the voluntary health agencies wrote an angry response to the governor:


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We believe that the intent and effect of your proposal, as stated in your letter, is to circumvent the judicial system, subvert the Constitution, and impose your will over that of the voter. We are unified in our opposition to this action and will pursue every avenue to ensure that Proposition 99 is upheld. …The Superior Court made two points very clear. First, funds in the Proposition 99 Health Education and Research Accounts cannot be used to fund medical care. Second, any attempt to divert the Health Education and Research Accounts into medical care will be closely scrutinized.[34]

They did not release this letter to the press or make any effort to marshal public support.

As the governor requested, the Legislature passed SB 493, which contained a funding plan that was identical to AB 816. SB 493, originally sponsored by Senator Cathie Wright (R-Simi Valley), had proposed a minor change in the portion of the health and safety code dealing with radiologic technologies. In this form, it had passed through the committee structure and the Senate and was awaiting final action on the Assembly floor. There Wright was replaced by minority leader Ken Maddy (R-Fresno) as the bill's sponsor, and the old bill was amended in its entirety to appropriate Proposition 99 funds. The section on radiologic technologies was dropped. By using an existing bill in this manner, there would be no hearings on the issue and virtually no deliberation. It was the ultimate insider deal.

In SB 493 the Legislature sought to avoid the legal problems of AB 816 through two actions. First, it presented a long series of “findings” that were designed to convince the courts that the tobacco use situation in California had changed substantially enough to justify major cuts in the anti-tobacco education programs. For example, the Legislature included the “finding” that “the decline in overall tobacco use since 1988, the resulting decline in cigarette and tobacco tax revenues and the decline in the number of Californians with health insurance, such that 6.5 million people are uninsured, make it critically important to reallocate revenue for one year to meet urgent health care needs in a manner consistent with the purposes of the act.”[35]

Second, rather than simply using Health Education and Research money to fund medical services, SB 493 amended the percentage allocations of tobacco tax revenues in Proposition 99 to put less money into the Health Education and Research Accounts and put more directly into the Physician Services Account, where it was then appropriated to the same medical service programs that the court had ruled illegal in the AB 816


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suit. SB 493 put only 10 percent of the tobacco tax revenues in the Health Education Account (instead of the 20 percent required by Proposition 99) and only 1 percent in the Research Account (instead of the 5 percent required). The Physician Services Account was given 22.5 percent of the revenues (instead of the 10 percent specified by the initiative); the Unallocated Account was given 26.5 percent (instead of 25 percent). This action was taken to deliberately amend the initiative rather than rely on the appropriations process.

By this time every county in California had formed a tobacco control coalition, which had created a network of people who were well informed about tobacco control and who could have been a substantial resource for the reauthorization effort. The lobbyists did not tap this resource. Cynthia Hallett, who at the time was working for the Los Angeles LLA, later described how advocates in the field finally began organizing their own effort: “Where I remember the most amount of activity coming up was SB 493, and that was May of '95. That was a long way down the pike. And what happened was it got to the most dire stage and then finally there was much more communication. But what was interesting was that activities to combat SB 493 did not necessarily originate from anybody out of Sacramento. …I mean, that was the first major effort that I can remember people really getting behind.”[36] The frustration in the field was clearly growing, but it was not organized and focused enough to influence the events of 1995.

On July 10 the Assembly passed SB 493 on a 67-4 vote and returned it to the Senate, where it was approved, as amended, on a 32-6 vote just five days later. The Governor signed SB 493 into law on July 27, a mere seventeen days after it was “introduced.” Once again, the established power structure within the Legislature and administration, in alliance with powerful tobacco and medical interests, pushed through an appropriation designed to reduce the tobacco control program.

Proposition 99's advocates had no chance in this game of political hardball. Carolyn Martin observed that SB 493

zoomed through the legislature faster than any bill that I've ever seen. I think it was a done deal in four days. The only thing we did to even try and slow down this missile was to require a Senate hearing and by then the Senate was in the last days of the budget session when everyone is so frazzled and tired they can't think anyway. Lots of people in the Assembly told us they didn't even know what they were voting on when they voted on 493. One of our mistakes was we did not have a strong Assembly leader who would just scream and


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stomp and carry on to try and expose any chicanery on diverting the money again. We needed that and we didn't have it. And, remember, Willie Brown was still there.[37]


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