Alternatives in Philanthropy
A Publication of Capital Research Center
July 1994
California's Proposition 99:
Pork Barrel for Anti-Smoking Groups
By Dr. Thomas J. DiLorenzo
DOWNLOAD THIS PAPER IN PRINTER-READY PDF FORMAT
Click here to get free Adobe Acrobat Reader
Editor's note: In 1988, California voters approved Proposition
99, a "sin tax" on tobacco that has raised some $600
million annually for medical research, anti-smoking education,
and other purposes. As this issue goes to print, the California
state legislature is reauthorizing the tax, which expired July
1. A legislative conference committee is now ironing out differences
in how the money should be spent.
Thomas J. DiLorenzo examines how the medical establishment and
anti-smoking groups have been fighting over the distribution of
Proposition 99 funds "almost from the day [the money] became
available, "and how revenues are being used in ways that
voters never intended.
Would it be fair to tax the Democratic Party and give
the money to the Republican National Committee? Or to tax labor
unions to promote laws that are biases against workers? Or to
tax Planned Parenthood to support anti-abortion groups, or vice
versa?
Apparently, a large and growing number of nonprofit organizations,
as well as numerous state legislatures, believe so. Special "sin"
taxes are being imposed by state and local government to fund
propaganda campaigns that promote government-approved lifestyles.
Led by such politicians as Sen. Ted Kennedy (D-MA) and Rep. Henry
Waxman (D-CA), nonprofit political activists are seeking to force
Americans to adopt their own version of "clean living."
These activists, who might best be described as Neo-Puritans,
believe that most American s are unable to make everyday decisions
for themselves, such as what to eat and drink and whether nor
not to smoke, and that the government should force them to adopt
"healthy" behaviors. According to Glenn Barr of Americans
for Nonsmokers' Rights (ANR), a collation of California anti-smoking
groups, "We will never know how many smokers' lives we prolong...
when we force them to do the right thing for themselves..." 1
The anti -smoking crusade that has intensified in the last few
years is especially fanatical in its moral denunciation of smokers,
whom it increasingly treats as social outcasts. Economist James
Buchanan captures the essence of activist' mindset with the phrase
"meddlesome preferences," whereby "the... elitist,
who somehow things that his or her own preferences are 'superior
to,' 'better than, ' or 'more correct' than those of other, [tries]
to control the behavior of everyone else, while holding fast to
his or her own liberty to do as he or she pleases." 2
The danger of this view, economist Ludwig von Mises once said,
is that "... once the principle is admitted that is the duty
of government to protect the individual from his own foolishness,
no serious objections can be raised against further encroachments...
And why limit the government's benevolent providence to the protection
of the individual's body only? Is not the harm a man can inflict
on his mind and soul even more disastrous than any bodily evils?
Why not prevent him from reading bad books and seeing bad plays,
from looking at bad paintings and statues and from hearing bad
music...? If one abolishes man's freedom to determine his own
consumption, one takes all freedoms away. The naive advocates
of government interference with consumption... unwillingly support
the cause of censorship, inquisition, intolerance, and the persecution
of dissenters." 3
For ten years Capital Research Center has documented how increasing
numbers of nonprofits are working to restrict
1
Americans' rights and freedoms. The recent passage of California's
Proposition 99, which provides tax money to nonprofits seeking
to end smoking, offers another example of this disturbing trend.
Capturing Tax Revenue
In 1987 the American Cancer Society (ACS), American Lung Association
(ALA), American Heart Association (AHA), and California Medical
Association (CMA) formed a coalition to triple the state's cigarette
tax. Expected to raise over $500 million annually, much of the
revenue would supposedly go to these organizations for research,
medical care, and anti-smoking education campaigns.
The coalition had a major stake in the money the tax would generate,
but as "nonprofit" organizations they had reasons to
deny it. Jay D. Michael, a CMA lobbyist, said that "the
principal reason [for the tax] is not to raise money. The principal
reasons is to stop smoking...[I]f a tax were imposed and it raised
nothing, we would be delightedthat would mean nobody would be
buying cigarettes." 4
The facts, however, speak differently. In 1979 California voters
passed Proposition 4, a constitutional amendment that limited
state spending. Under its provisions, if the state reached its
spending limit, tax revenues would be refunded to taxpayers, smokers
and nonsmokers alike. The ACS, ALA, AHA, and CMA would receive
nothing, even though a decrease in smokingwhich the coalition
claimed was its only concernwould still result from the cigarette
tax.
To protect themselves against the loss of tax revenue, the coalition
pushed for a statewide referendum, Proposition 99, to change the
state constitution so that the spending limit would not apply.
According to state assemblyman Lloyd Connelly (D-Sacramento),
the collation's legislative liaison, this strategy was adopted
because of the "the so-called Gann spending limit passed
by voters in 1979," Without a constitutional amendment,
"the legislature could be forced to refund the tax if the
state [reached] its spending limit." 5
Thus, the main objective of the coalition was not to discourage
smoking, but to capture tax revenue. expecting a windfall of
tens of millions of dollars, the coalition reportedly spent over
$400,000 lobbying for Proposition 99. "It's the biggest
project the American Cancer Society has ever undertaken in terms
of staff commitment," said an ACS spokesman. 6
Proposition 99 passed in November 1988 by a 58 to 42 percent
margin, increasing the state's cigarette tax from 10 to 35 cents.
A new 42 percent tax was also imposed on non-cigarette tobacco
items. Six accounts were created to disburse the funds:
- Anti-tobacco education in schools and communities (20 percent);
- Hospital treatment of indigent patients (35 percent);
- Physician treatment of indigent patients (10 percent);
- Research on tobacco-related diseases (5 percent);
- "Environmental concerns" (5 percent);
- Not allocated, to be applied to the above categories (25 percent).
The Fighting Begins
The California Medical Association has been battling other
coalition members over its "fair share" of the money
almost from the day it became available. The CMA initially worried
that revenues targeted for health care for the uninsured might
be substituted for the state-funded Medi-Cal insurance program
that pays medical bills for the poor. If this occurred, doctors'
fees would remain the same, and the medical profession would realize
no net financial gain from Proposition 99. 7
The CMA immediately began lobbying for a greater share of the
funds, much to the consternation of the health charities, which
accused the CMA of trying to "undermine Proposition 99."
CMA president William G. Plested III candidly told legislators
that his organization and the health charities were "fighting
for this money like jackals over a carcass." 8
More recently, Americans for Nonsmokers' Rights sued Governor
Pete Wilson for "illegally diverting" more than $165
million that allegedly was for nonprofit health education programs,
but was "improperly used for health screening and immunizations
of poor children and for prenatal care for poor women who are
pregnant."9 Apparently for ANR, increased funding for political
activist groups is more important than programs that help poor
women and children. Interestingly, ANR president Stanton Glantz
(also a professor at the University of California at San Francisco)
is one of the largest recipients of Proposition 99-funded research
grants.
Many of the nonprofits receiving Proposition 99 funds were never
involved in health issues before the money became available.
A recent "public service" and that ran in several California
newspapers read, "Are you involved in a nonprofit program
looking for money? If your work can incorporate tobacco prevention,
there may be funding available..." 10 It
2
urged nonprofits to contact their local health department to apply
for funds, and listed several programs already funded, including
a "teen theatre program" with an anti-smoking message
and a "Bingo game in Spanish." Grants were also available
to "protect, restore, [and enhance] fish, waterfowl, and
other wildlife habitat areas" and to "improve or maintain
state and local park and recreation sources.
Big Bureaucratic Bucks
Proposition 99 revenues support a growing network of state health
officials, university researchers, and nonprofit political activists.
Funds have been used to create ten regional, tax-funded coalitions
that award grants to "subcontractors," mostly nonprofits,
that seek to build anti-smoking sentiment through the use of newspapers,
radio, and television. In addition, each of the 58 counties in
California, along with major cities, has a "Local Lead Agency"
that solicits grant proposals and awards funds.
Employees of a public relations firm working for more restrictive
smoking ordinances recently received the following salaries through
Proposition 99 revenues: 11
- Project Director, $265/hr;
- Political Director, 145/hr;
- Legislative Manager 345/hr;
- Communications Director, 150/hr;
- Research Manager, 160/hr;
- Media Manager, 110/hr.
At least some nonprofits and local government agencies have used
Proposition 99 funds to pay the salaries of employees not working
on tobacco-related issues. The treasurer of the Sacramento NAACP
recently admitted that a $159,000 grant from the state health
department was not used for tobacco education, as it was supposed
to be, but "had been spent instead on salaries for other
branch employees and other expenses." 12
Anti-Smoking Education: Any Effect?
Tobacco Use in California, a survey of the smoking habits
of Californians published by the California Department of Health
Services and the University of California at San Diego, says that
the "the hazard of smoking is widely acknowledged; 84% of
California smokers agree that smoking harms their own health.
This acknowledgment is, if anything, somewhat stronger among
black and Hispanic smokers..." 13
This raises a fundamental question: If virtually everyone already
knows that smoking is unhealthy, why should millions of taxpayers'
dollars be used for anti-smoking education? What can activists
possible teach the public that it does not already know? Further
examination of how Proposition 99 funds are being used suggests
that California's anti-smoking campaign has little to do with
education and everything to do with forcing people to engage in
preferred behaviors.
Proposition 99 showers California public schools with money under
the state Department of Education's "Healthy Kids, Healthy
California" program. Some $150 million has been allocated
to teach students to be non-smokers. So far, the program has
given students and parents gifts in return for student's promise
not to smoke. According to the Stanislaus County Tobacco Control
Education Incentive Plan, "incentives such as pack, stroller
or gift certificate of comparable value will be awarded to quitters
who stay quit 3 months from the end of the cessation class. Their
word will be taken as validity of quit status." 14
Since little, if any, effort is made to verify whether students
have quit, the program is essentially a giant giveaway of taxpayers'
money. Gifts to students and their parents have included diapers,
baby clothes, movie tickets, T-shirts, compact discs, radios,
sports equipment, bathroom scales, gift certificates, money for
baby showers, and lottery tickets. In Stanislaus county "half
of the people joining said that the lottery was an important reason
for joining the program." 15
Proposition 99 funds have also been used to throw parties. The
Hanford, California school system sponsored "a pool party
for 13- to 19-year-olds....Free food, drinks, and deejay music
[were] provided by the King's County Health Department, which
used Proposition 99 money to sponsor the six-day event. The beach
balls, Frisbees, buttons and magnets that were given to children
this week were also paid for using Proposition 99 money...." 16
At other festivals, "outrageous stunt" contests have
awarded prizes to whomever performs the weirdest feat to persuade
a loved one to stop smoking. Past winners include a girl who
ate a can of dog food.
The Martinez, California school district used Proposition 99
funds to pay for a trip to Yosemite National Park. "Spring
is in the air, flowers are blooming and the days are getting longer.
It's time to pack up the baby, put on your walking shoes, and
get ready for a great day strolling around Yosemite Nation Park,
" read an advertisement for the "Breathe Easy, Smoke
Free Walk." Everyone participatingincluding smokershad his
park entrance fee paid and was given "a free alpenlite belted
pouch with water bottle and a box lunch." 17
Despite the millions of dollars already spent, a survey by the
3
California Department of Health Services "did not indicate
a decline in adolescent smoking between 1990 and 1992." 18
Further, as one local newspaper noted, such programs may actually
encourage smoking: "With smoldering cigarettes balanced
between their fingers, groups of teenagers...scoffed at the state's
recent move to pump up anti-smoking campaigns. They say ads,
pro or con, don't influence their behavior at allthey're going
to smoke no matter what." "I've been smoking since
I was fourteen," said one teen, and "I don't even look
at the ads." 19 By making tobacco even less socially acceptable,
Proposition 99 may well encourage smoking among more rebellious
teens.
Students as Political Pawns
Last year, Calaveras County parents were infuriated when a survey
of teens' views on family, school, drugs, and sex was given by
the county government "Teen Health Care Task Force."
The Proposition 99-funded task force was composed of the local
chapter of the American Association of University Women, the Calaveras
County Probation and Sheriff's departments, and Planned Parenthood
of San Joaquin County. Only a third of parents gave their consent
for the survey, and many denounced it is inappropriate, "demeaning
and invasion of family privacy" since it included "26
direct and specific questions on the subject of sexual activity,
promiscuity, abuse, contraceptive use, etc. and at least 24 probes
into personal and private family relationships." 20
The apparent purpose of the survey was to secure more state funds:
"before the state could be persuaded to provide money for
teen services, a survey of teens was necessary to prove a need
and identify what is lacking," said a member of the task
force. Funds were not intended for anti-smoking education but
for "free condoms or school-based health clinics that would
provide contraceptives or abortions." 21
The San Francisco Chronicle recently reported that the
Novato, California Police Department denounced a vigilante sting
operation by an anti-smoking group that used a 16-year-old girl
to buy cigarettes at stores in Novato to highlight the illegal
sale of cigarettes to minors. Another Proposition 99-funded group,
Stop Tobacco Access for Minors (STAMP), has since 1988 conducted
over 100 such operations in the North Bay area. The local police
chief complained that teenagers are "out breaking the law
to prove a point, and that's vigilantism.... What are they going
to do next, put drunk drivers out on the road to see if they're
caught?" STAMP has defended its actions as "merchant
education," saying that "This was technically illegal,
but there are a lot of people out there who support what we're
doing." 22
Political Advocacy
Proposition 99 forbids the use of funds "to promote partisan
politics or candidates," or "to promote the passage
of any law, including public ordinances and regulations." 23
But as soon as some $600 million a year became available, activists
began spending the money on political organizing and lobbying
to further restrict smoking.
According to one local newspaper, "When voters approved
Proposition 99, many people didn't realize the funds would be
used to pass laws restricting smoking. According to the proposition,
the funds are earmarked for health research and education, to
offset medical costs relating to tobacco users, and to contribute
to natural resources..... But employees from the Butte County
Tobacco Education Project have lobbied heavily for more restrictive
smoking laws throughout the count." 24
The Tobacco Control Coalition of Contra Costa County recently
published minutes from a public meeting, in which it said, "It
is the intention of the State that community tobacco coalitions
become involved in the implementation of policy change at the
local level. The Contra Costa Coalition will play a crucial role
in mobilizing community support for the... model ordinance developed
by the City./County Relations Committee." 25
The Sacramento County environmental Management Department recently
spent over $3,000 to mail out flyers along with utility bills
that read "local smoking laws are helping you. Choose a
smoke-free Sacramento." The department also helped pushed
(sic) "Measure G," an anti-smoking ordinance. When
a county supervisorial candidate protested the department said
the flyers were "an educational service." 26
A three-day, September 1992 "Revolt Against Tobacco"
conference in Los Angeles, which brought together leading anti-smoking
activists, focused entirely on anti-smoking political strategies. 27
Barbara Wells, former director of communications and government
affairs for the Los Angeles County ALA and current director of
the Proposition 99-funded
4
tobacco control program of the San Luis Obispo County Health Department
described how a coalition including the ACS, ALA, AHA, and ANR
passed a "100% no-smoking in Beverly Hills" ordinance.
She also explained that when critics in Butte County charged
that Proposition 99 funds were being used for political advocacy,
anti-smoking activists insisted that they were promoting "education."
In the next sentence, she said, "some of the strengths we
had up there [Butte County] were...a very strong grass roots committee
working for the ordinance. We...had a politically active community."
Paul Neprath of the ALA advised activists to "build coalitions....
Get your [city] council people before you go to a vote. Count
your noses before you walk into any council meeting.... Know exactly
were your votes are gonna come from." He also advised groups
to associate themselves with ACS, ALA, and AHA "whenever
you go before the cameras, because the public trusts them"
When asked by one participant how an ALA program spent $65,000
in Proposition 99 money in just a few weeks, he explained , "We
spent it on campaign expenses, law firms, blah, blah, blah, a
lot of different stuff."" When pressed further, he
simply changed the subject.
Joan Twist, director of the California Healthy Cities Project,
explained how "when Prop 99 monies came through... we had
our own tobacco control coalition within the city of Long Beach"
which "had at the very top it [its] list to revise our current
city ordinance" to ban smoking in all restaurants and work
places. Because of this experience, "our coalition members
all increased their skills in advocacy."
A few "big guns" from national anti-smoking groups
were also on hand to add their perspective. Debra McClellan,
the anti-tobacco coordinator for the American Public Health Association
in Washington, D.C., was introduced as someone who "manages
the Association's scientific and policy activities concerning
tobacco control," which entails "designing advocacy
efforts" and "building local, state, national and international
coalitions." She told the audience, "It is time for
tobacco control to truly become political."
"Taking All Freedoms Away"
Anti-smoking activists' stated objective is to achieve a "smoke-free
society." Most likely, however, they see this achievement
merely as a steppingstone to restricting and outlawing other kinds
of behavior. As ANR co-director Julia Carol recently told the
Washington Post, if tobacco "magically disappeared,"
she would "simply move on to other causes." 28 In just
the last few weeks, nonprofit activists groups have issued reports
alleging that hot dogs, pop corn, and golf courses are dangerous.
As Ludwig von Mises warned, "If one abolishes man's freedom
to determine his own consumption, one takes all freedoms away."
If California's Proposition 99 establishes a trend, Americans
can expect to see more tax-funded nonprofits gradually whittling
away our longstanding rights and freedoms.
5
Notes
1. Quote taken from a written transcript of a three-day conference
entitled "Revolt Against Tobacco." held in Los Angeles
in September 1992. The text is available from the author.
2. James M. Buchanan, "Politics and Meddlesome Preferences,"
in Robert Tollison, ed., Clearing the Air: Perspectives on
Tobacco Smoke (Lexington, MA: D.C. Health, 1988).
3. Ludwig von Mises, Human Action: A Treatise on Economics,
3rd ed. (Chicago: Henry Regnery, 1966), pp. 733-34.
4. Richard Paddock, "Health Care Groups Join to Push Cigarette
Tax Hike," Los Angeles Times, February 2, 1987, cited
in James T. Bennett, Health Research Charities: Image and Reality
(Washington, DC: Capital Research Center, 1990).
5. Sandra N. Michioku, "Health Coalition Urges 35-Cent Cigarette
Tax," United Press International, February 23, 1987, cited
in Bennett.
6. Daniel Carson, "Campaign Laws Clouded by Taxpayer Subsidies
for Prop. 99 cigarette Tax Initiative," San Diego Union,
October 17, 1988.
7. As discussed in Bennett, Health Research Charities: Image
and Reality.
8. Ken Hoover, "Health Groups Squabble for Tobacco Tax Funds,"
United Press International, July 31, 1989, cited in Bennett.
9. Greg Lucas, "Suit Questions Use of State Fund,"
San Francisco Chronicle, March 24, 1994, p. A19.
10. "Tobacco Prevention," Mammoth Lakes Weekly,
February 18, 1993, p. 53.
11. Grant Proposal to City and County of San Francisco Tobacco
Control Project by the GCA Group, January 13, 1992, obtained through
state Freedom of Information Act request.
12. Robert D. Davila. "NAACP Hit by Financial Allegations,"
Sacramento Bee, February 4, 1993, p. B1.
13. University of California at San Diego, Tobacco Use in
California 1990 (San Diego: University of California at San
Diego, 1990), p. 1
14. Stanislaus County Tobacco Control education Incentive Plan,
1990-92, Stanislaus County, California.
15. Ibid.
16. T. S. Hele, "pool Program Quenching Smoking Finishes
Tonight, " Hanford Sentinel, August 22, 1992, p.
1
17. "Breathing Easy, Smoke Free Theme to be Celebrated with
Free Walk-in-the Park," News Gazette (Martinez, CA),
June 5, 1992, p.1.
18. California Department of Health Services, Tobacco Use
in California 1992 (San Diego: University of California, San
Diego, 1992).
19. Angela Hill, "Teen Smokers Say Ad Blitz Won't Make Any
Difference," Tri-Valley Herald (Danville, CA) February
24, 1993, p. 1.
20. "parents Want Sex Survey Kept Off Calaveras County Campuses."
Gannett News Service, January 8, 1993.
21. Ibid.
22. Kate Taylor, "use of Teenager in Cigarette-Buying Sting
Upsets Novato Police," San Francisco Chronicle, January
11, 1994, p. A18.
23. Santa Clara County, Ca. Tobacco Control Plan grant announcement,
1993. This is stated in the law, and is in local government written
announcements of available grants.
24. Linda Mellink, "is It Education or Lobbying?" Paradise
Post, March 17, 1992.
25. Tobacco Control Coalition of Contra Costa County. Minutes
of Tobacco Control Meeting, October 10, 1991. 75 Santa Barbara
Road, Pleasant Hill, CA 94523.
26. Steve Sebellus, "Costa Says County Using Public Funds
in Campaign," Sacramento Union, May 22, 1992.
27. All quotes from "Revolt Against Tobacco" conference.
28. John Schwartz, "California Activists' Success Ignites
a Not-So-Slow Burn," Washington Post, May 30, 1994,
p. 1.
Reprinted with permission from author.
Terrence Scanlon, Publisher
D.T. Oliver, Editor
Capital Research Center is a nonpartisan education and research organization classified by the
IRS as a 501(c)(3) public charity.
CAPITAL RESEARCH CENTER, 727 15th St. N.W., 8th floor, Washington, DC 20005 (202)393-2600
6
|