Financing Child Care in the United States - Ewing Marion Kauffman ...

GENERATING PUBLIC REVENUE SALES AND EXCISE TAXES
• Having affordable housing and child care located in
Aspen (rather than in outlying areas of the county) is a
major benefit to employers of lower–wage workers in
the tourism industry, which dominates the area.
• Aspen prides itself on community values — caring
about its citizens and workers and striving for a healthy
economy and a healthy environment. The combination
of child care with affordable housing — both needs
easily understood in a high–cost area like Aspen —
was appealing to the community because of these
values.
• Enacting sales tax legislation in an area dominated by
tourism is a “Robin Hood” proposition: The voters know
that the majority of the taxes will be paid by
nonresidents, while the majority of benefits will go to
residents. Enacting sales tax legislation may encounter
opposition in lower–income communities and/or in
communities without significant nonresident
involvement in the local economy.
• Two factors that contributed to passage were that the
tax is not permanent and that the city council retains
annual decision–making power over the allocation of
funds. Voters will get to decide whether to renew
the tax or let it “sunset.” Earmarking the revenue too
specifically could be perceived as undermining the role
of local government.
• In the only public mention of child care during the first
referendum campaign, an opponent of the housing tax
accused the council of purposely putting the two
together to assure passage “because [you know] no
one will vote against babies.”
OTHER SITES WITH SIMILAR STRATEGIES
The cities of Boulder, Colorado, and Steamboat Springs,
Colorado, have worked on the development of similar
strategies.
CONTACT
Virginia Newton, Director
Kids First
0405 Castle Creek Road, Suite #3
Aspen, CO 81611
Phone (970) 920 5363
Fax (970) 920 5558
PROPOSITION 10: CHILDREN AND
FAMILIES INITIATIVE (CALIFORNIA)
DESCRIPTION
Proposition 10: Children and Families Initiative (“Prop 10”
or “the Initiative”) is a ballot initiative approved by the
voters of California. Taxes are imposed on cigarettes and
other tobacco products to generate funds for promoting,
supporting and improving childhood development for
children up to 5 years of age and to create a state
commission and county commissions to distribute the
funds.
WHEN ESTABLISHED
The proposition was approved by the voters on November
3, 1998. Taxes took effect on January 1, 1999. The
proposition has no “sunset” provision, so it remains in
effect unless rescinded by the voters through a
subsequent ballot initiative. Changes to the Initiative may
be adopted by a two–thirds vote of the legislature.
ANNUAL AMOUNT
The Initiative generates funds by taxing cigarettes at the
rate of 50¢ per pack and taxing other tobacco products,
including cigars, at a rate approximately equal to $1 per
box. The bulk of the proceeds from the new tax are
initially deposited into a state Children and Families Trust
Fund. The actual revenue for FY1999–2000, its first full
year of operation, was $723 million, and the projected
revenue for 2000–01 was $719 million. The amount
required for collecting the taxes (estimated at $700,000
annually) and funds to offset revenue losses to health
education and breast cancer research propositions that
receive portions of the state excise taxes on cigarettes
(estimated at $12 million annually) were not included in
these totals.
Revenues are split between a state commission (20
percent) and county commissions (80 percent). The state
commission share must be distributed according to the
following formula:
• 6 percent for media communications on topics
such as child development, smoking prevention among
pregnant women, and selecting quality child care;
• 5 percent for education, technical assistance and
training for county commissions, parents and
professionals;
• 3 percent for child care, including education and
training of child care providers, educational materials
and other activities to increase availability and supply of
high–quality, accessible, affordable child care;
• 3 percent for research and development on best
practices, program standards and evaluation for all
types of early childhood development programs and
services;
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