Tobacco Cash: New Clash


In a sign that the political struggle over tobacco funds is intensifying, state Sen. Joe Dunn asked legislative colleagues Thursday to sign a letter warning Orange County officials not to commit the county’s share to jails and debt repayment before voters speak in November.

The effort by Dunn (D-Santa Ana) comes in reaction to county officials’ statements earlier this week that they may soon seek to sell bonds tied to the $900 million in national tobacco settlement funds the county expects to get over the next 25 years.

The fight is over the county’s share of the settlement of lawsuits filed by numerous states against the major tobacco companies. Such a bond sale would be a preemptive strike against a proposed initiative that health care advocates are seeking to require the county to spend 80% of the proceeds on health care and anti-smoking efforts.

Citizens Health Alliance to Reinvest the Tobacco Settlement--or CHARTS--began gathering signatures two weeks ago for the initiative. The group has until the end of May to gather 71,206 valid signatures of registered voters to guarantee a place on the Nov. 7 ballot.


In pressing their position, county officials say an immediate bond sale would be legal and would encumber the money regardless of the initiative’s outcome.

Others sharply criticized the proposal.

Assemblyman Scott Baugh (R-Huntington Beach), who is GOP minority leader, said such an action by the Board of Supervisors would be “a big mistake” and called it reminiscent of the board’s endorsement this winter of a restrictive labor agreement in an effort to win union support for the plan to create an international airport at the former El Toro Marine Corps Air Station.

“I would have some concerns that the board should not engage in conduct that thwarts the opportunity to hear the voice of the people,” he said.

The political test of wills between the county and health care advocates over the settlement money has been going on for almost a year. A health care coalition--including doctors, hospitals and health clinics--had first negotiated then fought a war of words with the county over how to spend the money.

Supervisors have proposed allotting most of the funds to reducing county debt and covering jail expansion, while spending $7 million to $8 million annually on health care. The county is expecting to get $30 million to $38 million from the settlement annually, with additional payments extending beyond 2025.

Facing the threat of the initiative, the supervisors this week agreed to reopen talks with the health care coalition, but they also pressed home their view that the board could make the November balloting moot by selling a bond tied to the tobacco settlement before the vote.

Under that plan, the county would receive a lump sum--$160 million to build a county jail has been discussed--and repay that money annually with proceeds from the tobacco settlement.

"[The money] can be spent ahead of the November vote and would be guaranteed” as a legal contract, County Chief Financial Officer Gary Burton said.

Supervisor Todd Spitzer said the coalition must understand that the county has weapons in this fight and also suggested that the 80% figure for health care is a nonstarter for the county.

“There is a risk here for both sides,” said Spitzer. "[The coalition] needs to recognize there is room for compromise here. . . . The board has to see it has a lot to lose if it ignores [the coalition].”

Dunn’s letter is addressed to Board of Supervisors Chairman Charles V. Smith. Copies were delivered Thursday to Dunn’s two Senate and seven Assembly colleagues in the Orange County delegation, along with a cover letter asking them to join him in warning supervisors against “precluding voters from exercising their will.”

“Not all of us have endorsed the countywide ballot measure,” the letter to Smith reads. “However, we all agree that should the measure qualify, the voters of Orange County have a right to take action on this issue prior to an action by the board to encumber these funds.”

In addition to Dunn and Baugh, at least three others in the 10-member delegation back the initiative: Assembly members Ken Maddox (R-Garden Grove), Lou Correa (D-Anaheim) and Patricia Bates (R-Laguna Niguel).