California is seen as a shining example of how tobacco taxes can be used to both dissuade smoking and also improve children’s health and readiness for school. Now President Obama is following California’s lead. When he presents his budget Wednesday, the president will outline a similar scheme to fund universal preschool, the White House has confirmed to various media outlets.

After Prop 10 passed in 1998, California became one of the first states to raise taxes on cigarettes to fund early education programs. A new agency, First Five California, was created to hand out the money to schools and nonprofits to run education and health programs for children under five.

Scott Moore, a political analyst with Early Edge California, a nonprofit that advocates for increased early education, said California’s experience shows that the president’s plan to increase tobacco taxes to fund universal preschool can provide two returns on the investment.

“You get the return from investing in young kids,” Moore said, “and you get the return in reduced healthcare costs from reduction in smoking.”

According to First 5 California’s most recent report, more than 160,000 children under 6 years old received child development services such as free preschool last year. Moore said the state has become a leader in early education services for low-income families, calling California an “innovation engine” for early childhood services.

Other states, like Arizona, started similar programs after California’s success using tobacco tax funding. Arkansas uses a beer sales tax to fund early childhood programs.

Not everyone agrees that this is the way to do it. The tobacco lobby has vociferously objected. Even some early education advocates question this as a long term strategy.

Lisa Guernsey, director of the Early Education Initiative at the New America Foundation, called the strategy “risky” because it might “create situations in which all education for 4-year-olds is completely paid for with tobacco taxes.”

When times are tight, she said, there is always the possibility that the funding from taxes might be diverted elsewhere. Guernsey said that pre-K funding must be seen as an “integral part" of education, not an add-on that can be cut.

Guernsey likes Oklahoma's model, where pre-K is funded the same way as K-12 public education.

“Ultimately, we need to move to a world in which pre-K is considered an integral part of PreK-12 education," she said, "not as a separate entity with a separate funding stream."

The president has mentioned a cost-sharing component with the states, but has yet to present any details on that. A report from the Congressional Budget Office calculated that a 50 cent increase on taxes on a pack of cigarettes or small cigars could yield $42 billion over 10 years. That would go nearly halfway towards paying for the President’s universal preschool plans, which estimates show could cost as much as $100 billion in that time.