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Policy Pick: Proposition 1D

May 6, 2009
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On May 19, 2009, California voters will decide to maintain or significantly reduce funding for First 5 California, First 5 LA, and the other 57 county First 5 commissions funded by Proposition 10 tobacco tax revenues. Voters in 1998 passed the Proposition 10 law that created First 5 commissions throughout the state. Prop 10 added a 50-cent tax on cigarette packs sold to support programs for children in their first five years of life.

The State budget approved by the Legislature and signed by Governor Schwarzenegger called for a number of ballot measures, including Prop 1D, which changes the Prop 10 law and reduces First 5's revenue stream. If passed, Prop 1D will redirect more than 60 percent of First 5 revenues to the State General Fund to be apportioned by the State Legislature.

Currently, funds distributed by First 5 LA are used to support hundreds of local programs for thousands of children throughout Los Angeles County.  If passed, Prop 1D will impact First 5 LA in a number of ways:  

  • Diverts future revenues and therefore reduces funding available for grants for a five-year period, beginning July 1, 2009 to June 30, 2014. First 5 LA estimates a 61-percent funding reduction in fiscal year 2009-10 and 67-percent in fiscal year 2013-14. This means a loss to Los Angeles County of over $350 million Prop 10 dollars at approximately $70 million per year for five years.
  • Redirects First 5 California's commission fund balance monies of at least $275 million and no more than $340 million as of July 1, 2009. In L.A. County, some of the state commission's fund balance monies pay for matching fund programs like the School Readiness Initiative. Power of Preschool dollars received by First 5 LA contractor Los Angeles Universal Preschool (LAUP) also come from the state commission.
  • Restricts First 5 LA funding to "direct" services. This provision could prohibit First 5 LA's funding of capacity building and systems change efforts, as well as research and evaluation activities.
  • Delays payments to county commission by 6-8 months since funds will not be allocated to County Commissions until the state collects the $268 million (county predicts funds will be receive in January or February).

First 5 LA will continue to provide factual information to grantees, community-service contractors and other stakeholders in the early childhood fields, as well as state elected officials, about Prop 1D's potential impact on First 5 LA community investments and outcomes. For more information on Proposition 1D click here or call Howard Jacobs at (213) 482-7555.

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