Tobacco Suit Funds Could Go on Ballot

A high-powered and well-financed statewide coalition is writing an initiative that would require the state and local governments to spend all of the $25 billion in tobacco lawsuit settlement money on health care.

The group--which includes major doctor, hospital, nurse and consumer representatives--has met several times in the last month to discuss drafts of the initiative. The effort began within weeks of Gov. Gray Davis’s veto in late September of AB100, a bill that would have required the state to spend all of its $12.5-billion share of the tobacco settlement on expansion of health and health care services.

The initiative drive also is being fueled by decisions in several counties to siphon at least some of the settlement cash for non-health care causes. The most egregious of those, according to coalition members, is last week’s vote by Orange County supervisors to spend about 80% of the county’s windfall on jail construction and debt retirement.

“I know of nowhere where the debate has assumed that level of arrogance,” said Steven Thompson, vice president of the California Medical Assn.

Organizers expect to finalize a draft and present it to the state attorney general’s office by Friday to begin the legal approval process, which can take up to 60 days and must be completed before signature gathering can begin. They want to have the initiative on the November 2000 ballot.

The tobacco settlement money will total $25 billion to the state and local governments through 2025, with additional money after that based on tobacco sales and profits. The first installments should start arriving next summer as part of the settlement of lawsuits filed by states, counties, cities, physician associations and others against the tobacco industry. The suits sought to recover money spent on smoking-related diseases and injuries.

Though the group’s members have agreed that 100% of the state’s portion of the settlement should be spent to expand health services, still at issue among coalition members is how severely to limit the way California counties may spend their portion of the tobacco money.

Some advocates favor no wiggle room for counties, while others think the initiative would be more politically salable if a super-majority on a board of supervisors would have the flexibility to spend tobacco funds on other than health-related items.

“We have started to consider certain language and would like to finalize relatively soon,” said state Sen. Joe Dunn (D-Santa Ana), a key proponent of AB100, who hosted a meeting at the State House on Nov. 8 to discuss a draft of the proposal.

The health care group is under some time pressure, since its members would need to collect 419,261 valid signatures by April 21 to get on the ballot.

Both the California Medical Assn. and the state chapter of the American College of Emergency Physicians have committed to raising $600,000 to fund the signature process and are speaking to a host of grass-roots health organizations about contributing volunteers to the efforts, said Jim Randlett, a lobbyist for the ER doctors.

Participants in the series of discussions are the same groups that backed AB100, said Dunn and Thompson. They included the California Medical Assn.; California Nurses Assn.; California Healthcare Assn.; California Teachers Assn.; California chapters of the heart, lung and cancer associations; the American Assn. of Retired Persons; and the California Council of Churches.

Political observers said an initiative with that type of backing and that kind of money for signature gathering must be taken seriously.

In his veto message, Davis called the bill “well-intentioned, but flawed” and insisted that the funds--more than $500 million annually--go into the state’s $63-billion general fund so the administration could have maximum fiscal flexibility.

Davis spokesman Michael Bustamante declined to take a position on the coalition’s effort but said the governor “was pretty clear on his desire for maximum flexibility on those funds.”

“California has been on the cutting edge in providing hundreds of millions in general-fund dollars for tobacco-related health issues,” he said. In addition, he said, Proposition 99 funds pay for more anti-smoking campaigns.

Health care advocates, however, continue to maintain that the settlement money, which is supposed to compensate state and local governments for the costs of paying for tobacco-related diseases and medical care, should be spent only on health care and anti-smoking campaigns.

“This is not only in the spirit of the settlement but consistent with how Californians think the money should be spent,” Thompson said.

Physicians and local and state governments sued the tobacco companies “so the money could be used to pay for services to people who are uninsured and to a large degree suffered from these diseases,” he said.

The draft of the initiative discussed by the group at last Monday’s meeting in Sacramento contained three major provisions, the most contentious of which was a requirement that “tobacco settlement dollars be spent to expand (not supplant) health care services, at state and county levels.”

A current draft provides more flexibility for counties, permitting a two-thirds vote of a board of supervisors to approve spending outside of health and health services. Cities taking part directly in the tobacco settlement--San Diego, Los Angeles, San Francisco and San Jose--would face no restrictions under any of the proposals.

However, in all drafts the state would be required to spend all of its portion on expanding health care, participants said.

The current draft being discussed would set specific spending areas for the state. They include reimbursement for emergency room trauma and on-call physicians; reimbursement for inner-city and rural health clinics for treating the uninsured; increasing the number of school nurses; anti-tobacco education primarily focusing on teenagers; supplemental funding for children’s hospitals and hospitals that serve the uninsured; and subsidies for prescription drugs for low-income seniors.