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The Final Budget Negotiation

At a June 19 meeting of the Budget Conference Committee, chaired by Senator Mike Thompson, a spending plan for Proposition 99 was passed that allocated the full 20 percent to the Health Education Account and 5 percent to the Research Account. Of the $131 million allocated to Health Education, $5 million was to go to support cessation programs, $25 million to the media program, $43 million to schools, $31 million to competitive grants, and $27 million to LLAs. The Research Account was given $60 million.[58]

On June 20 ANRF and AHA released the results of the public opinion poll they had commissioned from the Field Institute to determine the extent of public support for Proposition 99. The results indicated overwhelming support among both Democrats and Republicans for Proposition 99 as it was passed by the voters—80.1 percent of voters supported the Proposition 99 revenue allocations. In addition, 55.3 percent of voters said they would be less likely to vote for a candidate who took campaign contributions from the tobacco industry, and 56.4 percent thought that the industry had a “great deal” of influence over those who accepted industry money.[59]

On July 8 the Assembly and Senate approved the budget, which included the Proposition 99 programs. A related bill, AB 3487, authorized the programs by permanently removing the sunset provision and leaving the program appropriations to be determined through the yearly budget process. The governor signed the budget on July 15.

The only downside of the final decision was that the funds were appropriated for only one year. Program authorization alone, however, became a moot issue with the removal of the sunset language. Miller was unhappy to have Proposition 99 in the budget bill because, ironically, this made it more susceptible to back-room deals out of the public eye:

… decisions in the budget aren't made like in a public hearing and you don't get to testify. Nobody does. It's done by the pols in the back room, and that's where they're going to assign the money. …And I think for a year or two we're stuck with that. One of the reasons they didn't extend us for more than a year is because they want it in the budget. And I think that CMA wants it there as well as Mike Thompson and others, because that puts it under their control. It takes it away from Diane Watson and Tom Hayden, Richard Katz. …The commitment to [Proposition] 99 is real thin in the Legislature still, despite everything we've done.[9]

McNeil, however, saw having the program in the budget as the only real alternative: “That was our preference to do this in the budget, because we thought that was the only way we were going to get the governor to go along. …if you had it in the budget, it's part of a bigger deal and there are lots of other issues and the governor doesn't have to put his signature on a Prop 99 bill. …It's not a single Prop 99 bill where he has to say, `I caved in.'”[27] In any event, the 1996-1997 budget marked the first time that the Legislature had passed a bill consistent with Proposition 99. The Health Education Account received its full 20 percent of revenues and the Research Account its full 5 percent. There were no unacceptable restrictions on the expenditure of Health Education Account funds, and the Research Account expenditures were refocused in ways that the public health groups had advocated.

In the end, Wilson acquiesced to full funding of the Health Education and Research Accounts. Isenberg described Wilson's personal style in these terms: “He may be a Marine and Marines may be trained for assault, but Pete Wilson when mad digs his foxhole deeper and never budges. He's a very stubborn guy.”[22] When asked why Wilson eventually shifted his stance on Proposition 99 funding in 1996, Isenberg replied, “Because everybody badgered him. The administration badgered him. `You're losing the lawsuit, stop this.'…And you know, after a while, even Pete Wilson wears down when his advisors come [to him with] `You're not winning this fight, now let's get out of here.' It's only whatever it is, $20 million, $30 million, $40 million.”[22]

In addition, the tobacco industry itself had become more of an issue and the industry's partisan support for the Republicans had turned into a liability. The Philip Morris memo identifying Wilson as “pro-tobacco” also made it more difficult for Wilson to defend his actions as good public policy. As Miller explained, “The industry left him in a bad spot politically by shifting their donations so dramatically to the Republicans. It did two things. One, it alienated the Democrats and, two, it provided some convincing evidence to the press that there was indeed some substance to our claim that the diversion wasn't about a budget shortfall. It was about stopping [Proposition] 99. And the third one is related to that and that was the discovery of the Philip Morris memo regarding Wilson and his being a friend. …What it did for the reporters was give credibility to our argument.”[9] The governor also had to face the reality that there would be no four-fifths vote in 1996, so he could not even attempt to alter the percentages of tax revenues going to the different accounts. In short, for Wilson, there was little good news coming from the Legislature on Proposition 99. With the public watching, with no Democratic support, and with no recession to provide cover, he was left with little choice but to support the full-funding effort. The only other cover he had had—the CMA—had also switched sides. By returning to the public arena and taking a principled position of demanding that the will of the voters be respected, the public health advocates had succeeded.


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