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Continued Erosion of the Health Education Account: 1990-1994
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The 1992-1993 Budget Fight

In his budget for fiscal year 1992-1993, released in January 1992, Wilson again ignored the deal that he had made with the health groups by diverting the $16 million allocated to the anti-tobacco media campaign into medical care.[38][65] He also proposed to eliminate the school-based anti-tobacco programs.[20] In the first attack on the Research Account, he ignored Proposition 99 and the implementing legislation (SB 1613) by cutting the Research Account from 5 percent to less than 3 percent of tobacco tax revenues. Like the other “temporary” shifts, the ones proposed by the governor in 1992 were part of a continuing downward spiral in the amount of money allocated to Proposition 99's Health Education and Research programs.

The Budget Conference Committee agreed to $80 million of the $123 million allocation for education and research that the governor proposed

to divert into medical services during fiscal years 1991-1992 and 1992-1993. The cuts for 1992-1993 completely eliminated the $26 million for school-based programs, cut the media campaign in half to $7 million, and reduced the research program by $12 million.[66] The public health groups opposed these cuts.[67]

The ALA asked its attorney, George Waters, for a formal legal opinion regarding the diversions of Health Education and Research money into medical services. In an extensive opinion that mirrored those offered earlier by the Legislative Counsel, Waters advised the ALA that such diversions were illegal:

We conclude that funds in the Health Education and Research accounts cannot be used to fund health care programs… .

The drafters of Proposition 99 obviously paid a great deal of attention to how the Tobacco Fund would be divided up. The language is very specific. The intent of the drafters, and by extension the intention of the electorate, was to make a fixed percentage of the Tobacco Fund available for specific purposes and specific purposes only.

This conclusion is buttressed by the Voters Pamphlet description of Proposition 99. The Voters Pamphlet is an approved source for the determination of the legislative intent behind a ballot measure. …[and] contains the following analysis of the Legislative Analyst:

The measure requires the revenues from the additional taxes to be spent for the following purposes:

Health Education. Twenty percent must be used for the prevention and reduction of tobacco use, primarily among children, through school and community health education programs.

Given the above, we are reasonably confident that we can set aside in court any attempt to use monies in the Health Education and Research accounts for any purposes other than health education and research.[68] [emphasis in original]

The ALA chose not to sue. Instead, it made another deal.

On July 15, 1992, ten senators and twenty-seven assembly members signed a letter to Senator Alfred Alquist (D-San Jose), the Budget Conference Committee chair, protesting the committee's action in redirecting Health Education and Research monies to medical service programs. According to the letter, the redirection of these funds violated the public trust, violated the constitutionally protected statutory provisions of Proposition 99, and would disrupt the programs wrongfully receiving the money when it had to be returned to appropriate uses. On July 17, however, the Budget Committee reaffirmed its decision to divert the money.[69]


In opposing the diversions, the health groups created a procedural problem for the forces seeking to dismantle the Health Education and Research programs. This issue had not come up in earlier budget bills because the health groups supported the diversions; the associated legislation, passed by lopsided majorities, had gone unchallenged in the courts. The ALA had gone to court once—over the media campaign in 1992—and won. This time, the health groups were opposing the diversions.

On August 7, 1992, Peter Schilla of the Western Center for Law and Poverty wrote to Assembly Speaker Willie Brown to urge him to separate the Proposition 99 diversions from the remainder of the budget on the grounds that it would be difficult to get a four-fifths vote on the entire state budget.[70] The budget needed only a two-thirds vote to pass, and Schilla and others were arguing that the money could be diverted because of the language in the initiative that permitted the Legislature to enact amendments to Proposition 99 by a four-fifths vote, so long as the amendments were “consistent with its purposes.” (Critics were arguing that any reductions in the Health Education and Research programs below 20 percent and 5 percent would not be “consistent with the intent” of the initiative.) Brown followed Schilla's advice, removing the Proposition 99 accounts from the budget bill and placing them in separate bills that would be easier to pass under the four-fifths requirement.[71]

In the end, the bills did not come to a vote. The health groups agreed to a last-minute compromise in which most funding for the media campaign, competitive grants, and schools was restored. The LLA programs, however, took a major cut—from $24 million to $12 million. According to Najera, “In assessing where to amputate, the politicians had to make flash comparisons of the relative return between the different parts of the anti-tobacco program. One strong argument on cutting local leads was that much of the county funds were already spent on direct medical services, and thus the loss of local funding was diminished by whatever amount went to non-tobacco services.”[69] From the standpoint of a county's total revenues, this statement might have been true. But the cuts to the LLA would not be offset by money for local medical services. Moreover, the requirement that one-third of LLA money be diverted into the CPO medical services program remained, which amplified the effects of the LLA cuts. The local programs would be forced to absorb large cuts just as they were hitting their stride.

The LLAs were eventually rescued because of the fallout from an unrelated political battle between the Legislature and the governor over funding for community colleges. It turned out that the Legislature did not

need the Health Education money to pay for medical services; they instead diverted $21 million from the Health Education Account to community colleges. The governor vetoed this appropriation, and on October 1, 1992, the Department of Finance issued a letter returning this money to CDE, competitive grants, and the LLAs, as specified in AB 99.[72]

The attacks on the LLA budgets in both 1991 and 1992, along with the 1992 attack on the media campaign, were consistent with the tobacco industry's strategy to reduce Proposition 99's effectiveness. The LLAs were costing the tobacco industry time and money with their local ordinance work. Further, by educating minority communities about tobacco issues and bringing them into the tobacco control network, the LLAs and the competitive grants were weakening an industry power base.

The erosion of Proposition 99 continued.

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