Debra J. Saunders

Mike Genest, state director of finance under former Gov. Arnold Schwarzenegger and now a consultant, has seen how these special funds can "get out of control." Prop. 71 spawned the California Institute for Regenerative Medicine, which paid former California Democratic Party Chairman Art Torres a $225,000 salary and investment banker Jonathan Thomas $400,000 to serve as chairman -- for a four-day workweek. These special funds invite a certain arrogance, Genest noted, that can lead to "another black mark on government."

At a San Francisco Chronicle editorial board meeting last week, I asked Genest and fellow Prop. 29 opponent David Kline of the California Taxpayers Association whether they would support a $1-per-pack cigarette tax if the money went to the general fund.

Kline didn't think he would. CalTax doesn't go for "targeted taxes," he said, especially one designed to bring in less money over time, assuming the anti-smoking programs work.

Also, CalTax understands that smokers will have to pick up the tab, and that has ramifications on California's overall economy.

Genest said that he doesn't like Prop. 29's steep rise in cigarette taxes. But among the many things that Sacramento lawmakers may have to do to balance the books, he said, a higher tobacco tax "could fit in the mix."

The Prop. 29 folks told the Chronicle that Californians would not approve a tobacco tax increase that would put the money into the general fund, because voters don't trust the Legislature.

So Prop. 29's authors had to give the money to their cause. And they're the good guys.

Debra J. Saunders

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