Tobacco Deal Gets Differing Reactions
California’s cash-hungry cities and counties all but embraced Monday’s tentative settlement of lawsuits against the tobacco industry and the riches it promises, but state lawmakers took a more cautious approach to the landmark agreement.
Atty. Gen. Dan Lungren, whose deputies helped negotiate the deal, hailed the agreement as a “monumental feat,” calling it “the best possible settlement for the state of California.”
Under the agreement, California would receive $25 billion over 25 years, with half that sum going directly to counties and the state’s four largest cities--Los Angeles, San Diego, San Jose and San Francisco. The other half would go to the state.
Lungren, who announced the deal in Sacramento, said he hopes that the money will be spent on “health programs to benefit young people.” But while most state and local officials agreed with Lungren’s idea, the 131-page settlement imposes no strings on how the money must be spent.
Such decisions will be left to the boards of supervisors in 58 counties, the city councils of the four largest cities, state lawmakers and Gov.-elect Gray Davis.
Davis, who joined a separate lawsuit against the tobacco industry whose fate was uncertain as of Monday, did not comment, choosing to wait for a briefing from the lawyer representing him. But Sean Walsh, the spokesman for outgoing Gov. Pete Wilson, said: “On balance, it is a good agreement for the state.”
For the state itself, the settlement would translate to about $500 million a year, with the money going to the general fund, which totals $53.3 billion this fiscal year.
The deal requires that states sign the agreement by Friday, a provision that critics condemned.
Lungren said Monday that he intends to sign on by the Friday deadline, but his successor, Atty. Gen.-elect Bill Lockyer, called the requirement “absurd,” and said the apparent rush to win approval “could easily undermine public support.”
Lockyer urged that the industry and states delay the final agreement for at least three weeks to give the public time to review the massive settlement document.
State Senate Judiciary Committee Chairman Adam Schiff (D-Burbank) scheduled a hearing on the settlement in Pasadena for Wednesday, and invited Lungren to attend. The outgoing attorney general was noncommittal.
Under the law, Lungren said, he can settle the state’s claim on his own. For the tobacco industry to agree to it, however, a “critical mass” of other states must agree to its terms. Cities and counties that have filed separate lawsuits--such as Los Angeles and San Francisco--could reject the settlement and pursue their legal cases.
“I’m not going to get into a fight with anybody,” Lungren said. “All I’m going to say is that as state attorney general, I represent the people of the state.”
Schiff called the Friday deadline a “suspiciously short timetable.” He noted that while the $25-billion payment may seem huge, California should receive twice that sum, based on its population, when the deal is compared to multibillion-dollar settlements already struck by Minnesota, Texas, Florida and Mississippi.
While some Democrats in Sacramento were skeptical about the deal, chances that it would be scuttled by local officials in California seemed slim. Lungren’s office declined to release a breakdown of the payments to local governments, but the San Francisco city attorney’s office provided some estimates.
Many local officials already have ideas about how to spend the money, including funding new programs aimed at fighting teenage smoking, enforcing the ban on smoking in bars, restaurants and other workplaces, refurbishing public hospitals and helping fund health care for children.
“It should not get lost in the bureaucracy,” said Los Angeles County Supervisor Zev Yaroslavsky. “It should not go to paving streets and trimming trees. . . . If we were smart about how we spent it, we could make a difference in health care.”
While he did not embrace the deal, Yaroslavsky said he hopes that the board would spend the bulk of the approximately $3.15 billion the county will receive over the next 25 years on providing health care to children whose parents have no health insurance.
“It’s hard to walk away from that [money] if you’re Los Angeles County, and you remember what it was like in 1995, when we weren’t sure we could keep our health clinics open,” Yaroslavsky said.
The settlement translates to an average of $126 million a year for Los Angeles County, which spends about $2.2 billion a year on health care. In its lawsuit, the county estimated that the cost of caring for people with smoking-related illness is about $300 million annually, said Los Angeles County Chief Executive Officer David Janssen.
In San Diego, Greg Cox, chairman of the San Diego County Board of Supervisors, said supervisors will begin planning ways to spend more than $865 million the county would receive as soon as the state approves the settlement. Cox predicted that the money probably would go for anti-smoking advertising, classroom instruction and health clinics that treat smoking-related ailments.
In Ventura County, which would receive more than $230 million over 25 years, Supervisor Kathy Long said some of the money should be spent on programs that discourage smoking.
In Orange County, which stands to collect more than $835 million over 25 years, officials said the money could be spent to expand the Theo Lacy Branch Jail in Orange, add beds at Juvenile Hall, set aside money to pay off nearly $750 million in debt remaining from the county’s 1994 bankruptcy and add a facility for orphaned and abused children.
Orange County supervisors are expected to reevaluate their overall spending priorities in January. If the tobacco deal is cemented by then, the new funds would be thrown into the mix, county chief financial officer Gary Burton said.
Under the deal, Los Angeles, San Diego, San Jose and San Francisco would receive about $312 million over the next 25 years.
Los Angeles City Atty. Jim Hahn said that if the deal becomes final it would impose major restrictions on tobacco advertising and marketing.
“It’s really going to change how they sell their product,” said Hahn, who would recommend that much of the city’s money be spent to enforce laws against sales to minors.
San Francisco City Atty. Louise Renne, who in 1996 filed the first suit by a municipality against the tobacco industry, is urging San Francisco officials to back it.
Citing provisions limiting youth access to tobacco and imposing marketing restrictions, Renne said the deal is “at least as good as we could ever hope to achieve in litigation.”
Times staff writers Tony Perry, Tom Gorman, Jean O. Pasco, Pamela J. Johnson and Nicholas Riccardi contributed to this report.