Falling tobacco tax revenues are disrupting the future of a state program for health and development services for young children, prompting the San Diego County Board of Supervisors to inject $4.3 million to stabilize the program’s local efforts for another year.
The county funding is a short-term fix for First 5, a state program istered at the local level and aims to help children age 5 and younger. In San Diego, the program’s services range from oral health care to housing for young mothers and their children at risk of homelessness and for a preschool.
Between 2023 and 2024, First 5 screened about 16,000 San Diego-area children for development issues and another 14,000 for behavioral issues, treating about 8,200 of them, according to the organization’s most recent annual report.
But like other California programs bolstered by tobacco taxes, First 5 San Diego’s revenues are falling in tandem with smoking. Since 2020, revenues have gone down by about $7 million for an organization that will have a budget of about $27 million next year, according to budget documents from the First 5 Commission of San Diego. By 2030, revenues are expected to fall another $5 million.
That worsening financial picture prompted county supervisors to step in on Tuesday. In a unanimous vote the county approved using $4.3 million from its own tobacco settlement fund to First 5’s Healthy Development Services program over the next year.
Supervisor Monica Montgomery Steppe, who serves on the local First 5 commission, sponsored the measure for short-term funding.
“Parents and caregivers are the agents of change for their children, and this program provides them with the tools needed to enrich their child’s development,” Montgomery Steppe said on Tuesday. “Healthy Development Services fills a significant gap in our continuum of care for children ages zero to five.”
Statewide impact
California created the First 5 program in 1998 via Proposition 10, which imposed a 50-cent tax on tobacco to fund early child development services. An additional $2-a-pack tax on cigarettes and other tobacco products — ed with Proposition 56 in 2016 — has brought in more funding.
But a steady decline in tobacco tax collections has seen statewide revenues for First 5 decline in kind. Since 2021, Proposition 10 revenue has fallen from about $36 million to about $26 million, and Proposition 56 revenues has fallen from about $97 million to $80 million. At the state level, financial plans call for First 5 to trim its spending over the rest of the decade for research and development and education.
In San Diego, First 5 has gotten only modest funding from sources that aren’t tobacco taxes. Those include CalWorks, other state social services spending and grants — but even some of those funding sources have dried up.
To keep operations going, First 5 San Diego has repeatedly tapped its sustainability fund for $31.9 million in the last four years, and it expects to use another $8.3 million from the fund by 2030, according to commission budget documents.
First 5 San Diego’s most expensive programming is its health services — but other spending goes toward education services, oral health care, Rady Children’s Hospital’s KidSTART Center and Mi Escuelita, a Chula Vista preschool for children referred by child welfare services and other community programs.
‘A lot of parent empowerment’
During Tuesday’s board meeting, parents, program staff and other child health care experts urged the county’s four supervisors to back the short-term funding.
Parent Megan Caldwell recounted how her two children struggled in their early years. Her daughter had speech issues, and her son was slow to learn how to walk and lacked the coordination to jump.
Via First 5, her daughter went through speech therapy, and the family learned strategies to improve her son’s mobility at home.
Today, her elementary school-aged daughter recently won a state history award for a podcast she created, and her son is in karate classes.
“This little bit of intervention led to a lot of parent empowerment,” Caldwell said.
Tara Milbrand, an American Academy of Pediatrics staffer who trains doctors on First 5 services, testified to the benefit medical professionals see from the program.
“They tell me all the time how much (First 5) services benefit their families and help them to do their jobs better,” Milbrand said. “We do not want to go back to a time where children were not being screened and treated early.”
Without the county’s additional , First 5 anticipated cuts that would have locked out about 3,300 children and families, Montgomery Steppe said Tuesday. Its clinical services were expected to be slashed by 59% and its developmental services by half.
“Not only is it, I believe, the ethically right thing to do, but it’s the fiscally responsible choice as well,” Montgomery Steppe said. “Every child we help today represents a teenager or adult who can thrive tomorrow and well into the future.”
Supervisor Jim Desmond, who voted in but warned that the county will not be able to use one-time funding to programs forever.
“This isn’t really a knock at First 5, but how are we going to handle these types of services in the future?” he said. “When the funding ends for a program, we just can’t backfill all the time.”
