Children’s Services Funding: Facts & Analysis

Prop. 1D would take $1.7 billion over five years from tobacco tax revenues that fund California's First 5 early childhood programs and place the money in the state's General Fund. It would do this by amending Prop. 10, which increased tobacco taxes in 1998 to pay for new early childhood programs. Although Prop. 1D states that the transferred funds must be used for childhood services, it allows the legislature to take the same amount out of the General Fund and use it for other purposes. Given the state budget crisis, the likely result will be to diminish overall state funding for children.

Voters approved Prop. 10 with 51% of the vote in 1998. Prop. 10 mandated a 50-cent increase in tobacco taxes to pay for the creation of First 5 early childhood programs for children under age five and their families. First 5 programs include: School Readiness, Health Access, Information Kits for New Parents, Family Functioning, Child Development, and Child Health.

The California Legislature, by a two-thirds majority vote, placed Prop. 1D on the May 19, 2009, special election ballot as part of a package of six measures to reduce the state's $42 billion budget shortfall.

In the California Senate, 37 out of 39 senators supported putting Prop. 1D on the special election ballot. Two senators either abstained or failed to vote (Senate District 26 is vacant). In the California Assembly, 75 members supported and 3 opposed putting the measure on the ballot; 2 members abstained or failed to vote.

The California Legislature has placed a package of six measures on the ballot that include about $15 billion in spending cuts, an estimated $11.1 to $12.5 billion in tax increases, $5 billion in borrowing from future lottery profits, and an assumed $8 billion in funds from the federal economic stimulus package. Prop. 1D's cuts of $608 million in the first year account for about 4% of the $15 billion in reduced spending proposed by the legislature. An additional $1.1 billion in First 5 revenues will be diverted to the General Fund over five years. In the first year, Prop. 1D will take $340 million from First 5 reserve accounts and $268 million in new revenues. Prop. 1D will continue to reduce the funding available for First 5 programs by about $268 million per year (more than 50% of its annual revenues) until 2014. The Legislative Analyst's Office projects the First 5 state commission will lose $54 million and county commissions will lose $214 million each year for five years. A reduction in First 5 programs will result in increased costs to counties, local governments, and school districts, which will provide some of the First 5 services.

The following individuals wrote the official arguments supporting Prop. 1D:

• Robert J. Baldo, executive director of the Association of Regional Center Agencies; and
• Javier V. Guzman, principal consultant for The California Latino Child Development Association.

The following individuals wrote the official arguments opposing Prop. 1D:

• Pamela Pimentel, R.N., Maternal-Child Health Specialist;
• Pamela Simms-Mackey, MD., associate director of Medical Education, Children’s Hospital & Research Center, Oakland;
• Leticia Alejandrez, executive director, California Family Resource Association;
• Delaine Eastin, former California superintendent of schools;
• Geogene Lowe, R.N., health linkages coordinator, Santa Barbara County; and
• Elizabeth Hiteshew, coordinator, Early Childhood Education, UCLA Education Extension Division.