Placer County Ends Tobacco Tax-Funded Health Program

Placer County has become the first county in the state to withdraw from the California Healthcare for Indigents Program, which uses tobacco tax revenue to fund health services for residents who are not eligible for Medi-Cal or Healthy Families, the Sacramento Bee reports. The program was established by lawmakers in 1989 under Proposition 99, a ballot initiative that allows the state to use cigarette taxes to improve public health and education. Placer County Health and Human Services officials said that it became necessary to end the program because the county's tobacco tax revenue has fallen by 97% in the past 14 years and is insufficient to fund the program. While the Placer County program costs about $350,000 per year, it would have received about $39,000 in state tobacco tax funds this year, according to the Bee. "This meager funding level fails to even partially contribute to health care services, either for children or adults," county health officials wrote in a letter to the county Board of Supervisors. The program, which primarily serves children, about 25% of whom are undocumented immigrants, will continue to provide services in "the short term," the Bee reports. However, county officials said that as early as June, they may change the eligibility requirements and services offered under the program. County officials had hoped that children who lost coverage under the program could be eligible for Healthy Families. However, Dr. Jim Gandley, director of managed care systems and community clinics for the county, said that Gov. Arnold Schwarzenegger's (R) budget proposal to cap enrollment in Healthy Families makes that option unlikely.

The Bee reports that the decline in tobacco tax revenue is part of a statewide trend driven by the declining number of residents who purchase tobacco products. California last year distributed $70 million in tobacco tax revenue, compared with $343 million in 1989. Bob Dunstan, director of administration for the county health department, said, "The message to the state is that, if they're going to create programs, then they should maintain stable funding." Other local governments -- including Sacramento and Yolo counties -- also have seen a decline in revenue from tobacco taxes earmarked for health services but do not yet plan to withdraw from the California Healthcare for Indigents Program, according to the Bee (Wiener, Sacramento Bee, 1/18).