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[August 29, 2006]

COLUMN: Prop. 86 a bane for taxpayers

(Comtex Business Via Thomson Dialog NewsEdge) LOS ANGELES, Aug 29, 2006 (Daily Trojan, U-WIRE via COMTEX) --I've spent my entire life in California, and as a lifelong Californian, I think there are certain things that people expect me to enjoy: avocados, the beach, surfing and hugging trees.


There's another trend Californians absolutely love, however, that mainstream society is less quick to pick up. Californians love to amend our constitution. We've done it more than 400 times, for things such as controlling education spending and creating appellate courts.

Come Nov. 7, we'll have the opportunity to amend our constitution six more times.

Not all Californians are slow to pick up on this trend. Special interest groups are using the upcoming election to write themselves into the state constitution, bypassing the checks and balances of our legislature. Eminent domain, funding for education and transportation and requiring parental notification on a minor's abortion are all on the upcoming ballot.

The biggest boondoggle up for a vote this November was written by hospitals and HMOs to raise revenue by attacking a small group of Californians: smokers. A tax aimed at just 14 percent of the population is where the tyranny of the majority strikes again.

Increasing the taxes on packs of cigarettes by $2.60 to $3.47 a pack would make California the most expensive place in the nation to buy cigarettes. Proponents of the measure say that this new tax would raise $2.1 billion for the state.

California undeniably is broke; we are poor and we need money. But this new money wouldn't go toward helping our state's financial situation at all, nor would it help decrease smoking.

Only 10 percent of the tax would be used to help people stop smoking or prevent people from starting in the first place.

Of course, only those who have been living in isolation for the past several decades might not know that smoking is dangerous. For those of us who are living in the real world, we have all seen the TV commercials, the magazine ads and the warnings on the boxes of cigarettes. It's common knowledge that smoking is bad for you.

Nevertheless, if smoking is bad, then this tax should be designed to prevent smoking. This tax, however, represents little more than a way to get money to for-profit hospitals such as Kaiser Permanente and Sutter Health. They would be receiving the largest proportion of money under Proposition 86.

Forty percent of the revenue generated by this tax would go to hospitals and the corporations that manage them. This tax essentially would a check for hundreds of millions of dollars to companies that make a profit at taxpayers' expense.

The money allows hospitals to do whatever they want since there is little oversight over how the money is spent. Such money allows hospitals to continue treating the uninsured at taxpayers' expense at inflated prices.

It also allows hospitals to fund projects that aren't related to smoking. Portions of the tax, if approved, will go toward research on obesity, diabetes, colon cancer and stroke prevention.

Using government money to fund research rarely works out for the better. It ensures that the money that could be helping people will be lost in bureaucracy and government restrictions. Rather, research on such diseases should be left to the private sector. After all, it was Dr. Samuel Broder, the former director of the National Cancer Institute, who said, "If it were up to the (National Institutes of Health) to cure polio through a centrally directed program you'd have the best iron lung in the world but not a polio vaccine." Indeed, if such research programs are so important, they should be competing for funding from California's General Fund, like most public spending projects.

There are other problems with the law. It has the potential to create a huge black market for cigarettes. New York City currently has the highest-taxed cigarettes in the country, and since their taxes have risen to $3 a pack, cigarette purchases have dropped faster than people who quit smoking. Additionally, cigarette purchases rose in geographically close states with low taxes.

Even the state's nonpartisan legislative analyst said such a tax would encourage purchases from other sources such as the Internet or smugglers.

Proposition 86 would short-change all consumers, not just smokers. Hospital corporations wrote themselves exemptions to antitrust laws that protect consumers, which would allow them to inflate prices, limit competition and restrict patients' access to services.

The law goes further by allowing hospitals to be exempt from criminal and civil prosecution that normally protects the public from anti-consumer activities that are illegal for most corporations.

Hospitals are spending massive quantities to pass Proposition 86, $7.6 million as of last July.

It's not a surprise, either; the bill gives a huge amount of money to hospital corporations with little oversight.

But while Proposition 86 is obviously right for the state's massive private corporations, it's the wrong choice for California.

Copyright (C) 2006 Daily Trojan via U-WIRE

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