California Proposition 1D, Tobacco Tax Revenue Fund Shift (May 2009)
To avoid additional cuts in general fund-supported state spending, Proposition 1D would have authorized a fund-shift of $268 million in annual tobacco tax revenue currently earmarked for "First Five" early childhood development programs under the terms of Proposition 10 (1998). That revenue, plus $340 million in unspent "First Five" tobacco tax money now held in a reserve fund, would instead have been used to pay for other state government health and human services programs that serve children, including Medicaid, foster care, child care subsidies, preschool programs, and more. Money for these programs currently comes from the state general fund.
Currently, 80 percent of "First Five" money is distributed to county governments for similar programs, including government "school readiness" programs for pre-schoolers, Medicaid health coverage to children whose family income is above the cap for that program, government parent-education training, food and clothing subsidies, and more. Under Proposition 1D, that revenue stream would cease for five years, essentially ending most First Five programs. However, it's likely that the state will use general fund money to continue some of these. For example, a prime candidate would be the "First Five" expanded Medicaid coverage, since under the SCHIP program the federal government pays more than half its cost.
|California Proposition 1D (May 2009)|
- Final results from the California Secretary of State
Proposition 1D was one of six statewide ballot propositions placed on the May 2009 ballot. They were part of the 2009-2010 California state budget and tax increase agreement (Propositions 1A, 1B, 1C, 1D, 1E and 1F). They are intended to close an approximately $42 billion gap between desired spending and expected revenues. In absolute terms, however, as of March, 2009 projections, when the budget deal's $10 billion tax increase and the $5 billion in borrowed money proposed by Proposition 1C are included, total general fund spending in the 2009-2010 budget will only decline by around 2 percent, from $94.089 billion to $92.206 billion. However, the nonpartisan California Legislative Analyst's Office which is the source of those figures, also said in early March that tax revenues flowing into the state treasury are "well below" the projections it used earlier in the year, and that California's government now faces an additional $8 billion gap betweeen expected revenue and the amount appropriated. 
Text of measure
The ballot title was:
The official summary provided to describe Proposition 1D said:
- Provides more than $600 million to protect children’s programs in difficult economic times.
- Redirects existing tobacco tax money to protect health and human services for children, including services for at-risk families, services for children with disabilities, and services for foster children.
- Temporarily allows the redirection of existing money to fund health and human service programs for children 5 years old and under.
- Ensures counties retain funding for local priorities.
- Helps balance state budget.
- See also: Fiscal impact statement
The estimate of net state and local government fiscal implications of Proposition 1D provided by the California Legislative Analyst's Office said:
- State General Fund savings of up to $608 million in 2009–10 and $268 million annually from 2010–11 through 2013–14, from temporarily redirecting a portion of funds from the California Children and Families Program in place of state General Fund support of health and human services programs for children up to age five.
- Corresponding reductions in funding for early childhood development programs provided by the California Children and Families Program.
The official arguments in favor of Proposition 1D in the voter guide were signed by:
- Robert J. Baldo, executive director, Association of Regional Center Agencies 
- Javier V. Guzman, principal consultant, The California Latino Child Development Association
On April 26, the California Democratic Party, meeting in its annual convention, rejected a recommendation from their party's legislative leaders to support Proposition 1D and instead adopted a position of neutrality on the measure.
Arguments in favor
Arguments made in favor of Proposition 1D in the official voter guide included:
- "This measure is a common-sense solution to California's budget crisis while also protecting important services for children under the age of 5."
- "Proposition 1D is consistent with the original intent of voters when they passed Proposition 10 in November 1998."
- "Voting for this measure will not permanently shift these funds away from their original purpose."
$22,503,109 was reported contributed to the campaign in favor of a "yes" vote on Proposition 1D, with an additional $1,730 of reported independent expenditures in support.. Several of the most well-funded campaign committees advocating for a "yes" vote on Proposition 1D were simultaneously advocating for a "yes" vote on Propositions 1A, 1B, 1C, 1E and 1F. Because of this, it isn't possible to determine how much money was raised or spent just on Proposition 1D's behalf.
Opponents of Proposition 1D included:
- League of Women Voters
- Health Access California
- Prevent Child Abuse California
- California Nurses Association
- National Association of Social Workers
- California Family Resource Association
- Junior League of San Jose
- American Federation of State, County and Municipal Employees.
- Peace and Freedom Party
The official arguments opposing Proposition 1D in the voter guide were signed by:
- Pamela Pimentel, R.N., Maternal-Child Health Specialist
- Pamela Simms-Mackey, M.D., Associate Director of Medical Education, Children's Hospital & Research Center, Oakland
- Leticia Alejandrez, Executive Director, California Family Resource Association
Arguments made for voting "no" on Proposition 1D included:
- If 1D passes, it will take funds from programs such as FIRST 5 that support health coverage for the state's at-risk children up to age 6.
- Some feel the ballot language is misleading, appearing to protect and expand services while actually cutting funding.
- According to Rusty Selix, the Executive Director of the Mental Health Association in California, "Prop 1D will force deep cuts to child abuse prevention programs, at a time when child abuse is soaring while the economy sours. This alone will cost California taxpayers billions of dollars in the years ahead, since it’s a hundred times more expensive to deal with the consequences of child abuse than it is to prevent it."
Opponents criticize ads
Dave Fratello, the campaign manager for the "NO on Prop 1D and 1E" campaign, objected to the television ads that Budget Reform Now ran to urge a "yes" vote on 1D and 1E. He said, "These statements aren't true. Proposition 1D & 1E take money out of voter-approved mental health and children's programs, then put that money into the state general fund. These measures then allow the Legislature and the Governor to spend that money with none of the accountability required by the original, voter-approved initiatives. Furthermore, the money taken won't be repaid."
$1,344,336 was reported contributed to the campaign in favor of a "no" vote on Proposition 1D, with an additional $1,197 of reported independent expenditures in opposition. Since several of the campaign committees advocating for a "no" vote on Proposition 1D were simultaneously advocating for a "no" vote on Proposition 1E, it isn't possible to determine how much money was raised or spent just to oppose Proposition 1D.
Donors of $50,000 or more to oppose Proposition 1D were:
|California Council of Community Health Agencies||$275,000|
|First 5 Association of California||$143,140|
|Protect Children and Families||$117,000|
|California Federation of Teachers||$50,000|
- The Field Poll conducted a public opinion research survey between February 20 and March 1 on Proposition 1D and the other five budget-related measures.,
- A Public Policy Institute of California poll that concluded in late March showed declining support for Proposition 1D.,
- On April 20-21, SurveyUSA conducted a poll of 1,300 California adults for KABC-TV Los Angeles, KPIX-TV San Francisco, KGTV-TV San Diego, and KFSN-TV Fresno. 15% of the registered voters they spoke with had already cast their vote. They concluded that for Proposition 1D, "Any outcome is possible on 1D, but momentum at this hour is against."
|Date of Poll||Pollster||In favor||Opposed||Undecided|
|February 20-March 1||Field||54 percent||24 percent||22 percent|
|March 10-17||PPIC||48 percent||36 percent||16 percent|
|March 11-12||SurveyUSA||40 percent||28 percent||32 percent|
|April 16-26||Field||40 percent||49 percent||11 percent|
|April 20-21||SurveyUSA||37 percent||39 percent||24 percent|
|April 27 - May 4||PPIC||43 percent||45 percent||12 percent|
|May 8-10||SurveyUSA||37 percent||50 percent||13 percent|
|May 15-17||SurveyUSA||35 percent||54 percent||11 percent|
"Yes on 1D"
Newspapers endorsing a "yes" vote on Proposition 1D included:
- The Los Angeles Times, which wrote, "...we cannot be as cheerful as the campaign ads that began running last week...but the good outweighs the bad...But without 1D, the state would have to cut other programs that children and their families rely on -- foster care, in-home care, health and hospitalization."
"No on 1D"
Newspapers endorsing a "no" vote on Proposition 1D included:
- The San Francisco Bay Guardian.
Path to the ballot
The California State Legislature voted to put Proposition 1D on the ballot via Assembly Bill 17 of the 2009–2010 Third Extraordinary Session (Chapter 11, 2009–2010 Third Extraordinary Session).
|Votes in legislature to refer to AB 17 to ballot|
Basic background information:
- Official Voter's Guide to Proposition 1D
- PDF of the mailed May 19, 2009 voter guide for Proposition 1D
- May 19, 2009 ballot proposition election returns
- Proposition 1D in the Smart Voter Guide
- Analysis of Proposition 1D from the Institute of Governmental Studies
- Guide to Proposition 1D from the California Voter Foundation
- Summary of donors to and against Proposition 1D from Cal-Access
- Donors for and against Proposition 1D from Follow The Money
- California Secretary of State's announcement about May 19 ballot measures
- Budget Reform Now, official website in favor of Prop 1D
- Campaign finance reports of Budget Reform Now
- Vote No on Proposition 1D, website opposing Proposition 1D
- Campaign finance filings of organization opposing 1D
- Peace and Freedom Party
- California can't afford Propositions 1D and 1E
- California Props. 1D, 1E would divert child, health funds
- ↑ Sacramento Bee, "Angry voters whack budget, politicians", May 20, 2009
- ↑ Los Angeles Times, "With budget stalemate over, next move is up to California voters", February 20, 2009
- ↑ Los Angeles Times, "May 19 election deadlines already drawing near", February 20, 2009
- ↑ San Francisco Chronicle, "Budget-related measures on the May 19 ballot", February 20, 2009
- ↑ 2009 Budget Act General Fund Budget Summary With All Budget Solutions, Legislative Analyst's Office, updated March, 2009
- ↑ San Diego Union-Tribune, "State budget springs a leak", March 14, 2009
- ↑ 7.0 7.1 7.2 Voter Guide, "Arguments for and against Proposition 1D"
- ↑ Los Angeles Times, "State Democrats decline to endorse 3 of 6 ballot measures", April 27, 2009
- ↑ 9.0 9.1 Follow the Money, Proposition 1D
- ↑ Mercury News, "Support, opposition for May ballot propositions", March 25, 2009
- ↑ Mercury News, "Opinion: Proposition 1D will rob children's needs", March 31, 2009
- ↑ Huffington Post, "Tricking Voters, Hurting Kids", April 23, 2009
- ↑ California Progress Report, "Props 1D and 1E – Wolves in Sheep’s Clothing", May 1, 2009
- ↑ Yuba Net, "YES Campaign TV Ad Misleading on Proposition 1D and 1E", April 25, 2009
- ↑ Sacramento Bee, "Field Poll shows early backing for budget items on ballot", March 4, 2009
- ↑ Field Poll results for initial polling on six budget measures on May 19 ballot
- ↑ Sacramento Bee, "Budget ballot measures face uphill fight", March 26, 2009
- ↑ Public Policy Institute of California, "Special Election Ballot Propositions Face Tough Road", March 25, 2009
- ↑ SurveyUSA, "One Month From California Special Election, Opposition Grows to 5 of 6 Ballot Measures", April 22, 2009
- ↑ Los Angeles Times, "Yes on 1A, 1C, 1D, 1E and 1F", April 26, 2009
- ↑ Institute of Governmental Studies, "Endorsements, May 19, 2009 ballot propositions"