Program Background

Proposition 99 and the Legislative Mandate for the California Tobacco Control Program

Proposition 99

In November 1988, California voters approved the Tobacco Tax and Health Protection Act of 1988, also known as Proposition (Prop) 99. This initiative increased the state cigarette tax by 25 cents per pack, added an equivalent amount on other tobacco products, and designated a portion of the funds be used to prevent and reduce tobacco use. As shown in Table 1 below, Prop 99 revenues are deposited into six accounts by a formula and are used for specified purposes (Revenue and Taxation Code Section 30122(b), 30123, and 30124):

 

Table 1: List of Prop 99’s Six Accounts

Prop 99 Account

Purpose

Percent

Health Education Account (HEA)

Prevent and reduce tobacco use

20%

Hospital Services Account

Health care services for low income patients served by hospitals

35%

Physician Services Account

Health care services for low income patients served by physicians

10%

Research Account

Tobacco-related disease research

5%

Resources Account

Protect, restore, enhance fish and wildlife habitat; enhance state and local park and recreation resources

5%

Unallocated Account

Available for any of the above purposes

25%

 

The HEA funds both community- and school-based health education programs to prevent and reduce tobacco use and is jointly administered by the California Department of Public Health, California Tobacco Control Program (CDPH/CTCP) and the California Department of Education (CDE). Currently, CTCP receives approximately two-thirds of HEA funds and CDE receives approximately the other one-third. CTCP is responsible for supporting a statewide comprehensive tobacco control program, one of the largest and most successful public health interventions of its kind ever initiated, nationally or internationally. CTCP provides funding for 61 Local Lead Agencies (LLA), competitively selected community-based organizations, a statewide media campaign, and an extensive evaluation of the entire program.

 

The enabling legislation for Prop 99 includes Assembly Bill (AB) 75 (Chapter 1331, Statutes of 1989), AB 99 (Chapter 278, Statutes of 1991), AB 816 (Chapter 195, Statutes of 1994), AB 3487 (Chapter 199, Statutes of 1996), Senate Bill (SB) 99 (Chapter 1170, Statutes of 1991), SB 960 (Chapter 1328, Statutes of 1989), SB 493 (Chapter 194, Statutes of 1995); the annual State Budget; Health and Safety Code Sections 104350-104480, 104500-104545; and Revenue and Taxation Code Sections 30121-30130. The enabling legislation, the various codes, and the annual State Budget, provide legislative and funding authority for programs administered by CTCP to:

  • Conduct health education interventions and behavior change programs at the state level, in the community and in other non-school settings.
  • Apply the most current research findings and recommendations regarding tobacco use prevention.
  • Give priority to programs that demonstrate an understanding of the role community norm change has in influencing behavioral change regarding tobacco use.

 

Proposition 56

Almost three decades after Prop 99’s passage, in November 2016, the voters of California overwhelmingly passed Prop 56, the California Healthcare, Research and Prevention Tobacco Tax Act of 2016. Prop 56 increased the cigarette tax from $0.87 to $2.87 per pack, taking California’s ranking from 37th to 9th in the nation. The initiative increased the tax on other tobacco products by an equivalent amount, including electronic cigarettes for the first time. With 64.4% of voters voting in favor of Prop 56, Californians sent a strong message to end the state’s tobacco epidemic. Prop 56 revenues are distributed to state agencies to pay for implementation costs (Table 2), with the remaining revenues distributed to other state agencies by a formula (Table 3), all of which are to be used for specified purposes (Revenue and Taxation Code Section 30130.55 and 30130.57).:

 

Table 2: Prop 56 Revenue Distribution for Implementation Costs

State Agency

Purpose

Percent or Fixed Dollar Amount

Board of Equalization (BOE)

Reimbursement for expenses incurred in administering the Prop 56 tax

5%

California State Auditor

Biennial audit of agencies receiving Prop 56 funds

$400,000/year

University of California (UC)

To increase the number of physicians trained and working in California

$40,000,000/year

California Department of Public Health (CDPH), Oral Health Program

Education, prevention and treatment of dental diseases, including those cause by tobacco use

$30,000,000/year

Department of Justice/Office of the Attorney General; BOE; CDPH, Stop Tobacco Access to Kids Enforcement (STAKE) Program

Funds distributed to these three state agencies are to be used for tobacco-related law enforcement

$48,000,000/year

 

Table 3: Prop 56 Distribution of Remaining Revenue After Implementation Costs

State Agency

Purpose

Percent

Department of Health Care Services

Increase funding for health care services by improving payments for Medi-Cal health care, treatment and services

82%

CTCP

Bolster existing comprehensive tobacco control program efforts, established by Prop 99, to prevent and reduce tobacco use

 

At least 15% of funds distributed to CTCP must be used to accelerate and monitor the decline in tobacco-related disparities with the goal of eliminating them

11.05%

CDE

Bolster existing school-based efforts, established by Prop 99, to prevent and reduce tobacco use

 

At least 15% of funds distributed to CDE must be used to accelerate and monitor the decline in tobacco-related disparities with the goal of eliminating them

1.95%

UC

Medical research of cancer, heart and lung tobacco-related diseases

5%