Health Lobby Has Strong Medicine for Tobacco Plan

Health care advocates may appear to be begging when they press the Orange County Board of Supervisors for a fair share of the county’s $912-million slice of the national tobacco settlement pie, but behind their polite pleas there is considerable political reach.

Members of Orange County’s health care coalition say they will fight if supervisors don’t modify their unanimous decision to spend about 80% of the county’s share of tobacco settlement money on jail construction and county debt. It’s a battle both sides say could end with the county forced to spend all of the money on health care.

Coalition members already are talking about whether to oppose state legislation the county would need to spend the tobacco windfall on jails and debt payment. They also are weighing whether to back state or local initiatives to require tobacco money to be spent on expanding health care.

“We want this money to go for health care, and we are going to fight for that,” said Valerie Peters, communications director of the American Lung Assn. of Orange County. “We do understand about the debt and the needs of the county, but the bottom line is, this is the tobacco settlement for health and tobacco-related issues.”

Some in county government discount the opposition, saying building jails fights crime, which ranks at the top of the voters’ agenda.

But one supervisor suggested it may be tough for the county’s five Republican supervisors to lobby the Democrat-run Legislature for enabling legislation if their plan for using the money is under attack by health care experts and doctors, as well as the heart, lung and cancer associations.

“If we don’t settle this at a local level, it will be a very serious political battle in Sacramento,” said Supervisor Todd Spitzer.

If not, Spitzer said, board members could “assume the risk of potentially getting nothing [for their plan], and that is a big risk, considering we have such pressing needs.”

The county is expected to receive $30 million to $35 million a year for at least the next 25 years from the tobacco agreement. The money is from last year’s settlement of more than 40 lawsuits filed against the tobacco industry by state governments and others to recover the cost of tobacco-related diseases.

California will receive at least $25 billion over the first 25 years. Half the money goes to the state, half to county and four city governments.

Under the county’s current plan, it will spend about $7 million a year on health care. The balance would go toward the bankruptcy debt as well as building and operating a county jail by borrowing millions through investment banks with the tobacco settlement money as security, according to Chief Financial Officer Gary Burton.

In its first effort at compromise, the board on Nov. 9 gave health care advocates 120 days to work with the county Health Care Agency and devise specific programs and alternatives. But the same day, supervisors also endorsed its general jail and debt retirement plan.

Members of the HARTS coalition--short for Health Alliance to Reinvest the Tobacco Settlement--say they will draft their spending plans in good faith but continue to discuss the political alternatives, including blocking the enabling legislation or backing a restrictive initiative, including one locally that would require the county to spend every penny of the tobacco cash on expanding health care services.

If a local initiative develops, it could garner considerable support, according to a recent poll done for HARTS that found 82% of county residents favor spending the money only on health care.

“It would be premature for us to endorse a local or statewide initiative, but clearly that is within our options,” said Sam Roth of the Orange County Medical Assn. “There are ways for us to do all of this, but $7 million to $8 million for health care is not acceptable.”

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Former Orange County Assembly Speaker Curt Pringle is skeptical of the poll and thinks the health advocates may be “overplaying their hand.”

“I don’t see public health need as the No. 1 public concern; crime still is,” said Pringle, now a a lobbyist whose clients include the investment banker J.P. Morgan & Co. “If the supervisors were using dollars for unpopular issues, then yes, the county would be hanging itself too far out there, but they are addressing the two most supportable issues--crime and fiscal responsibility.”

John Gilwee, a vice president with the Health Care Assn. of Southern California, a hospital trade group, said he expects the supervisors to listen carefully to the spending plan being drafted by the HARTS group.

“I don’t think we are going in as beggars,” he said. “We are going in with overwhelming public opinion support and as health care providers who have been carrying the county water for many years in terms of subsidizing the costs of care [for the uninsured and indigent] for the county.”

The hospitals alone spent more than $170 million in fiscal 1997-98 on uncompensated health care in the county, he said. Community clinics and doctors provided another $37 million in uncompensated care, much of it for indigents and emergency medical services that was not paid for by the county, Roth said.

In addition, the coalition noted that the county had trimmed as much as $12 million from its health care budget after the 1994 bankruptcy. County spending was $40 million before the bankruptcy, and the appropriation dropped as low as $28.3 million before rising to $32 million this year.

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If it comes to an electoral contest, the coalition has considerable fund-raising potential, beginning with the county medical association, the hospital groups and the heart, lung and cancer associations. And while none have been very vocal in county politics in years, this dispute could turn them into activists.

“This is one of those issues where [it] could happen,” said Dan Wooldridge, a political and media consultant in Orange County.

A key ally in any fight would be State Sen. Joe Dunn (D-Garden Grove), who believes strongly that the tobacco money should be spent only on health care. Democrats in the State House are certain to seek his opinion on any enabling legislation, especially since he is the county’s only Senate Democrat and also handled all tobacco settlement legislation this year.

Dunn last week predicted the legislation would fail. A similar measure never got out of committee this year.

The law is critical, because without it the county cannot execute a key part of its plan--selling part of the annual stream of tobacco cash on the financial markets and in exchange receive a $150-million lump-sum payment that would be used to build the jail.

This so-called “securitization” would not be unique to Orange County. County officials expect the bill would win the backing of other counties as well.

Orange County Board of Supervisors Chairman Chuck Smith, who like Spitzer is up for election in March, said he remains “flexible” about how to divide the pot but believes “crime and debt service are the top issues” with voters.

“We need to do some planning and figure how we can jointly solve the problem, but we are not going to take the tobacco money and just throw it at the problem and hope it does some good,” Smith said.

Peters, the lung association spokeswoman, said she hopes and expects the supervisors to be open to negotiation.

“I really believe the public hasn’t really been heard on this,” she said. “Things are going to heat up a lot more in the next couple of months.”