How Arizona’s decline in cigarette smoking is costly to its early childhood education agency

PHOENIX – Arizonans are taking better care of their lungs but harming early childhood education funding in the process. This is because Arizona’s early childhood agency is reliant on tobacco taxes.

First Things First is a government agency created by voters in 2006 through Proposition 203 with a tobacco tax as its only dedicated funding source.

From 2010 to 2020, the tax generated over $120 million for early childhood support every year but one. In 2023, the total nosedived to $101 million, a whopping $15 million year-over-year decline.

It trended down to $102 million by 2024 before falling off the cliff to $89 million in the last fiscal year. Investment earnings and grants brought First Things First’s 2025 revenue total to $100 million.

Why is Arizona early childhood funding falling?

Joe Barba, senior director of government affairs at First Things First, said a major reason funding is falling is the agency was created before popular tobacco-adjacent products took off and cut into cigarette sales.

“The funding didn’t include nicotine and vaping because those products didn’t enter the market until 2007,” he said.

Barba said his agency is working on legislation to expand its revenue source to include taxes on vape and nicotine products.

“I think if the founding fathers and mothers could have anticipated people smoking out of USB sticks in 2006, when the voter initiative was passed, they would have included that in the original language,” he said.

First Things First worked with ASU’s Sideman Institute to project the potential revenue if vape and nicotine sales were included in the tax that funds the early childhood agency. The study found those products would bring in an additional $48 million-$60 million.

What is at risk as early childhood funding declines?

First Things First provides child care scholarships, child care centers, family resource centers and early preventive health programs.

Barba said the funding issue could force the agency to reduce child care access and support. That could result in more parents having to stay home with their kids, which would in turn impact Arizona’s workforce.

Another concern is the potential loss important early support for children.

“We know the first five years are some of the most important for a child’s life, and we want to make sure that those services are available for them today,” he said.

Funding for this journalism is made possible by the Arizona Local News Foundation.

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