Health Lobby Wins Delay on Vote to Spend Tobacco Funds

Heeding the pleas of health care advocates, county supervisors voted Tuesday to renew negotiations on whether to spend most of Orange County’s share of the national tobacco settlement for jails and debt reduction or to allocate a large part for health and anti-smoking programs.

A health coalition of physicians, clinic and hospital officials had urged the supervisors to use all of the estimated $30 million to $38 million the county will receive annually for health care and anti-smoking programs. The board had proposed spending only $8 million of that for health care in the first year, stirring protests from health advocates.

“This is a satisfying move, I must say,” Bruce Vancil, regional director of the American Cancer Society in Orange County, said after the board’s vote to postpone a decision until its May 9 meeting.

The action also includes reviving a health care task force that supervisors had put together to reach a compromise sum that should be spent on health issues from tobacco settlement funds, projected to total $912 million over 25 years. Talks had reached a stalemate in recent weeks.

The board’s action was an acknowledgment of growing sentiment for a November ballot initiative that would require the county to spend 80% of the settlement money on health care and anti-smoking efforts.

Supervisor Todd Spitzer said that looking at a health care initiative was like watching “a freight train coming toward us.”

“We need to come together with the health industry and get an agreement with the supervisors,” Spitzer said. Otherwise, he added, “it will be a war, and I have a feeling it’s not going to be pretty.”

Chairman Charles V. Smith said postponing the vote also would allow staff to research an apparent overlap of spending on services from Proposition 10 money and the proposed $8 million for health care. The Children and Families Commission, which Smith chairs, has received about $50 million in tobacco taxes. The proposition, which imposes a cigarette tax of 50 cents a pack, calls for spending on childhood development programs from prenatal stages to age 5.

Supervisors still intend to continue with debt reduction planning but spent part of Tuesday’s meeting trying to stir a healthy dialogue with health care representatives.

Other supervisors said they also had concerns with what county staff had recommended, especially in view of new estimates by Sheriff-Coroner Mike Carona that the need for new jail beds is not as great as projected earlier.

Carona now says the county will need only about 4,650 new jail beds by 2025--less than half the 10,000 that his predecessor, Brad Gates, said was required.

The county is operating under a 22-year-old federal court order to reduce jail overcrowding. The situation has resulted in the early release of thousands of inmates a year before their sentences were up.

To help raise funds, the board authorized the county financial officer to leverage part of the tobacco settlement through a nonprofit agency. The agency would sell bonds tied to the tobacco settlement funds and use the proceeds to help pay for jail expansion and reduce part of the bankruptcy debt.

After hearings on how to spend the tobacco settlement, supervisors voted in November to use most of the windfall to build more jail beds and reduce debts.

The plan calls for the early repayment of debts incurred from pension and bankruptcy recovery bonds that officials said would save the county $110 million in interest payments over 10 years.

The first installment of $21.6 million in tobacco funds was received last month and another $18 million is expected by April.