Arizona First Things First for Children, Proposition 203 (2006)
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|First Things First for Children|
Text of measure
Proposition 203 increased the state tax on cigarettes by 80 cents per pack, with similar increases on other tobacco products. The additional tax raised through the tax increase on cigarettes are earmarked for programs that support early childhood education administered through a fund called the Arizona Early Childhood Development and Health Fund.
In 2009, the Arizona State Legislature removed $7 million from Early Childhood Development and Health Fund that had accrued as interest and put the money into the state's general operating fund. The board that oversees the fund sued the state in May, and in July, the Arizona Supreme Court sided unanimously with the fund against the state. The Supreme Court relied on Proposition 105 from 1998 in its reasoning. Prop 105 limits the power of the legislature to tamper with voter-approved measures.
In Arizona, ballot titles are written by an initiative's sponsor. The ballot title in this case said:
- "All Arizonans benefit from voluntary early childhood education. Children start school ready to succeed; parents are able to keep good jobs and earn highter incomes; and taxpayers save money because early childhood education lowers drop-out rates, reduces crime, and cuts the cost of social services. This initiative would increase funding for early childhood developement and health programs. Local councils who know their communities' needs would distribute the majority of the funding, with oversight by a statewide board subject to audits and other accountability measures. Dedicated funding would come from an increase on the sales price of tobacco products."
Legislative Council analysis
The Arizona Legislative Council is required to provide a neutral overview of any statewide ballot measure on the Arizona ballot. For Proposition 206, they wrote:
Proposition 203 would establish an Early Childhood Development and Health Fund, consisting of revenues generated by an increase in the state tax on tobacco products, donations and state appropriations. The state tax on cigarettes would increase from $1.18 per pack to $1.98 per pack, and the tax on other types of tobacco products would be increased by a similar amount.
The Early Childhood Development and Health Fund would be administered by the new Arizona Early Childhood Development and Health Board (Board) appointed by the Governor, with the consent of the State Senate. 10% of the monies would be used for administrative costs and 90% would be used for program costs. No more than 10% of the program monies could be used to fund statewide grants or programs undertaken directly by the Board. The Board would distribute the remainder of the program monies in the following manner:
1. At least 35% would be spent on regional plans based on the population of children up to five years of age in the region.
2. At least 40% would be spent on regional plans based on the population of children up to five years of age in the region whose family income does not exceed one hundred per cent of the federal poverty guidelines.
3. Up to 25% of the monies could be used to fund regional programs without consideration of regional population.
Proposition 203 would prescribe requirements for programs and grants that increase the quality of and access to early childhood development and health services for children up to five years of age and their families.
Under Proposition 203, the Board would divide the state into an undetermined number of regions and would establish a regional partnership council for each region. The Board would appoint and set the compensation of the executive director. The executive director would hire regional directors and set the compensation of the regional directors. The councils would identify childhood development and health services needs and assets at a local level and spend monies that were budgeted annually by the Board.
Estimate of fiscal impact
The Arizona Joint Legislative Budget Committee is required to provide a fiscal impact statement for statewide ballot measures. The fiscal impact statement provided for Proposition 203 said:
- Proposition 203 increases the tax on cigarettes and other tobacco products and allocates the monies generated by the tax increase to various early childhood development and health care programs. The state tax on cigarettes would increase by 80 cents per pack and the tax on other types of tobacco products would be increased by a similar amount.
- The tax increase is estimated to generate $188 million in new revenue for early childhood development and health care programs during its first full year. Of this amount, at least 90% of the funds, an estimated $169.2 million, would be used for program costs and up to 10% of the funds, an estimated $18.8 million, would be used for administrative costs. Because some individuals may reduce their tobacco consumption when the price of tobacco increases, the state's existing tobacco tax collections may decrease. The existing tobacco tax goes for health programs, prisons and the State General Fund. The existing tobacco tax collections may decrease by $23 million in the first full year of the tax increase.
First Things First, a state education agency funded by Proposition 203, was criticized by Senator Carolyn Allen for allegedly refusing to help with Arizona's budget crisis in the Fall of 2009. The budget crisis, according to the Senator, was going to drive up child care license fees and could potentially close down some centers.
On October 27, 2009, Department of Health Services Director Wil Humble asked the agency if it would help with child care funding, but First Things First declined. According to Allen:"It’s disgraceful and shameful that they have been watching this situation unfold and don’t help. We’re talking about $2 million. If they have that kind of money and are still willing to sit on their hands and say this is not their role, then what is their role?”
However, Steve Lynn, chairman of First Things First, stated that it's not the job of the agency to provide funding for the state's responsibilities. According to Lynn: "This is the crisis de jour. It’s a responsibility of the state."
Donors to the campaign for the measure:
- Yes on 203: $3,239,064
- Arizonans for a Fair Beginning Supporting I-16-2006: $230,400
- Total: $3,469,464
Donors to the campaign against the measure:
- No on Proposition 203 (I-16-2006) Philip Morris USA: $9,451
- Total: $9,451
- Overall Total: $3,478,914
- Arizona 2006 ballot measures
- 2006 ballot measures
- Arizona State Senate
- Arizona House of Representatives
- Description of Proposition 203 for the state's official ballot measure publicity pamphlet
- Full text of Proposition 203
- Official canvas of the 2006 Arizona election results
- Arizona Secretary of State, 2006 Ballot Propositions & Judicial Performance Review Proposition 203
- National Conference of State Legislatures Ballot Measures Database