O.C. Tobacco Plan Targeted

Two major doctors groups on Wednesday filed notice of their intent to circulate statewide petitions to require that $25 billion in tobacco settlement money be spent on health care, measures that--if passed by voters--would bar Orange County from using its windfall to build jails and retire debt.

One of the two proposed initiatives--filed with the California attorney general’s office in Sacramento--would restrict how the state spends its tobacco cash over a 25-year period.

The second would limit spending by both state and county governments. It specifically targets Orange County--the only major county in California that has plans to use most of its tobacco money for projects unrelated to health care.

Local health care advocates hope the threat of the second proposed initiative will help persuade Orange County supervisors to modify their current plan, which calls for spending about 80% of the county’s tobacco cash on jail construction and debt retirement and the remainder on health care. Advocates want the county to spend at least 50% on health. Orange County is expected to get about $912 million over a 25-year period.

“If Orange County strikes a deal with the local health care community, then the sponsors would drop the local proposal,” said State Sen. Joe Dunn (D-Santa Ana), who helped draft the measure and has been among those negotiating with health care advocates and Orange County officials in recent weeks.

The two sides--including Dunn and Board of Supervisors Chairman Chuck Smith--will meet today to discuss a compromise, several sources said Wednesday.

“We want to see all sides win out of this,” said Sam Roth of the Orange County Medical Assn.

Supervisors last month voted unanimously to back their spending plan, but in recent days have indicated flexibility. Still, they are resistant to change and insist that before they consider modification, they want detailed proposals on where health care advocates would spend the money.

“We are always willing to discuss these things,” said Gary Burton, the county’s chief financial officer. “We would like to convince them that our plan is worthwhile, and that that is what the money would be best spent on.”

Representatives of the two sides met most recently Saturday, when Dunn said he made clear to county officials, including Burton, that without compromise “the county runs the risk of losing control of 100% of tobacco settlement dollar.”

Backers of the proposed statewide initiatives include the California Medical Assn. and the American College of Emergency Physicians, California chapter, as well as the American Assn. of Retired Persons and the California School Nurses Organization.

The two doctors groups behind the petition have committed to spending $775,000 to gather the signatures needed to win a spot on the November ballot, said California Medical Assn. spokesman Steven Thompson.

The effort is under some time pressure, since its members would need to collect 419,261 valid signatures--perhaps 600,000 total--by April 21 to get on the ballot. Signature gathering cannot begin for 40 days--or until Jan. 26--while the state reviews the language and petitions are printed.

Every other major California county has committed to spending the tobacco money on health care or the building of a major health care facility, such as the reconstruction of County/USC Medical Center by the county of Los Angeles. The national tobacco settlement, reached last year, will yield $25 billion to California state and local governments through 2025, with additional money after that based on tobacco sales and profits.

The money is part of the nationwide settlement made last year after 40 states and others sued the tobacco companies to seek reimbursement for the cost of paying for tobacco-related illnesses.

A similar battle over the tobacco cash is taking place in Sacramento. Gov. Gray Davis has opposed spending limitations as too restrictive, and in September vetoed AB 100, which would have forced the state to spend its $12.5 billion share from the settlement on expansion of health services.

A spokesman for Davis said the governor “led the charge” to get the state involved in suing the tobacco companies and pointed out that the state already spends more than $500 million from the general fund and tobacco taxes from Proposition 99 on tobacco-related anti-smoking education and health programs.

As in Orange County, that has not satisfied the health lobby. The statewide initiative is designed to force Davis to commit a large part of the tobacco windfall to health care.

“They wouldn’t be going to an initiative process if they thought they could work out something reasonable and productive with the governor without it,” said John Hein, veteran lobbyist for the California Teachers Assn., which has not taken a position on the proposal. “It absolutely will work as leverage.”

However, a number of groups that endorsed AB 100 have yet to back the proposed initiatives.

The California Nurses Assn. has indicated it is at best lukewarm toward the proposal.

Eric Wiesenthal, spokesman for the California Healthcare Assn., a hospital lobbying group, said, “We won’t take a position until we see what the final form is.”

Wariness by such significant interest groups highlights the supercharged atmosphere in Sacramento around health care legislation, measures in which Davis has shown a strong interest. Both the hospitals and the nurses have major issues that will be settled by the administration, including staffing, overtime pay and deadlines for the seismic retrofitting of hospitals, said health care experts.