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Prop. 56 will enrich hospitals and insurance companies

Cigarette packs are displayed at a convenience store. Proposition 56 raises the state tax in California by $2 a pack.
Cigarette packs are displayed at a convenience store. Proposition 56 raises the state tax in California by $2 a pack. Associated Press file

Helping people stop smoking and stopping kids from ever starting is important, but that’s not what Proposition 56 is really all about.

When you follow the money, it’s clear that Proposition 56 – the $1.4 billion tobacco tax increase on the November ballot – is just another example of special interests rigging the system.

Several wealthy special interests, including health insurance companies and hospitals, are backing Proposition 56, which will put $1 billion a year of new tax revenue into their coffers. That’s why they are among those who contributed $16 million to put Proposition 56 on the ballot and get it passed.

Huge hospital corporations and health insurance companies want voters to believe that the $1.4 billion in new tobacco taxes will go to help smokers quit and prevent kids from starting.

But that’s not where the bulk of the Proposition 56 money is going. Just 13 percent will go to tobacco cessation and education programs. The vast majority, about 82 percent, will go to those backing Proposition 56.

What’s worse, it’s unclear how much of this money will actually go to treating patients. That’s because the companies behind Proposition 56 made sure to include a provision that the new tax money be used to increase payments to themselves. These increased payment levels would be set as part of the annual state budget process, giving these well-connected and politically savvy interests the opportunity to leverage their relationships in the Capitol to increase their profits as much as possible.

Proposition 56 was also cleverly written to make sure these interests get the bulk of the money, cheating schools out of at least $600 million in new revenue each year.

That’s because Proposition 56 amends the state constitution to exempt itself from the Proposition 98 education funding requirement. Under that requirement, 43 percent of new tax revenue – including from tobacco taxes – should go to helping improve our classrooms.

In fact, the only reason Proposition 56 is a constitutional amendment is to guarantee that none of the new tax revenue has to go to improving our schools. While a small sum, totaling at most $20 million each year, will go to the Department of Education for tobacco cessation programs, this money can’t go to general education funding and is a pittance when compared to what hospitals and health insurers will get.

Proposition 56 is another example of wealthy special interests using their power, influence and money to rig the ballot in their favor.

For years, groups that couldn’t get things passed in the Legislature have turned to ballot box legislating to get their way. It’s time to once again say “no” to special interests using the ballot box to pad their coffers.

Ourania Riddle is a former president and current board member of the Solano County Taxpayers Association and wrote this viewpoint on behalf of the No on Proposition 56 campaign. She can be contacted at info@noonproposition56.com.

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