Judge rules that California can't use US$1B in tobacco taxes from an early childhood development program to pay for other services for low-income children, says move is illegal under ballot Proposition 10

Michelle Rivera

SACRAMENTO , November 29, 2011 (Associated Press) – The state of California cannot siphon $1 billion in tobacco taxes from an early childhood development program to pay for other services for low-income children, a Fresno judge has ruled.

Gov. Jerry Brown and state lawmakers had proposed using $1 billion from the California Children's Trust Fund to help cover the state's health care budget, but Fresno Superior Court Judge Debra Kazanjian ruled that such a move is illegal under ballot Proposition 10, which imposed a 50 cents-a-pack on cigarettes in 1998.

"This is a huge win for California voters and our children," Susan Anderson, chairwoman of the First 5 Commission of Fresno County, said Monday in a statement.

Lawmakers left the financing plan out of the budget last summer because of the lawsuit filed by First 5 commissions from Fresno, Merced and Madera.

The Brown administration is reviewing the ruling before deciding whether to appeal, the governor's finance spokesman, H.D. Palmer, said Monday.

Brown vetoed the initial budget approved by Democratic lawmakers, citing such "legally questionable maneuvers."

Still, the governor had argued that the move was legal because the state would use Proposition 10 money to pay for ongoing Medi-Cal costs for low-income children up to age 5.

"But that argument is disingenuous in that it was the Legislature that `chose' to cut funding to existing services instead of taking what might be the unpopular step of raising revenue," Kazanjian wrote in her ruling issued Nov. 21.

Proposition 10 was designed to provide funding for community health care for young children and families as well as assist pregnant women and parents of young children to quit smoking. The trust fund is administered by local First 5 commissions.

The Legislative Analyst's Office has projected that California faces a $13 billion shortfall over the next 18 months.

Assemblyman Bob Blumenfield, D-Sherman Oaks, chairman of the Assembly Budget Committee, said lawmakers should consider raising taxes.

"Although this ruling was anticipated, it risks pushing the pain of future budget cuts onto other programs if the votes for revenues remain out of reach," Blumenfield said in a statement.

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