Tobacco Funds Dispute Heads for O.C. Ballot

Health care advocates today will file 117,000 signatures to put an initiative on the Orange County November ballot and let voters decide how the county should spend an estimated $763 million in national tobacco settlement funds over the next 2 1/2 decades.

The decision to go to voters came Tuesday, immediately after the Board of Supervisors voted 3 to 2 against a compromise to divide the windfall, with 60% for health care and anti-smoking programs and the remaining 40% for jail construction and debt reduction.

The initiative proposed by a health care coalition--backed by the county’s major physician and hospital groups and lawmakers from both political parties--would require that 80% of the money be spent on health and anti-smoking programs, with 20% reserved for law enforcement.

Members of Citizens Health Alliance to Reinvest the Tobacco Settlement had worked with county officials for the past month on the compromise 60%-40% plan. After it was rejected, coalition members said Tuesday the time for talking was over.

“Once we submit it, we can no longer compromise,” said Dr. J. Brennan Cassidy, president of the Orange County Medical Assn. “We are frustrated that it took until the last three weeks, when we had the signatures, for them to talk seriously.”

By identical 3-2 votes, supervisors first rejected the 60-40 compromise, and instead endorsed a 50-50 split of tobacco funds for one year, after a 90-minute hearing.

Coalition leaders rejected the counterproposal, noting that they had collected 117,000 signatures in two months on initiative petitions, far more than the 71,000 registered voter signatures need to qualify a measure for the countywide ballot.

If the registrar of voters certifies the signatures, the initiative campaign would pit the well-funded health care coalition against the same three-member board majority that supports converting the former El Toro Marine Corps Air Station into an international airport.

All speakers at Tuesday’s hearing endorsed the 60-40 plan, even a spokesman for Sheriff Mike Carona. But the board majority--Supervisors Cynthia P. Coad and Jim Silva and Board Chairman Chuck Smith--objected to the compromise, saying they did not want to tie the hands, or budgets, of future county supervisors.

The majority said the 60-40 plan was insufficient to retire county debt, build court-mandated jail cells and add alcohol- and drug-treatment units for inmates.

“Public safety would be severely jeopardized by the compromise,” said Coad, who with Supervisor Todd Spitzer helped negotiate the proposal. She called the threat from early release of prisoners or the failure to provide for addiction treatment “unacceptable.”

Spitzer predicted voters would pass the ballot measure. He also suggested his colleagues privately feel the same way or they would not have entered into negotiations.

“We have to assume it is going to pass, and pass big,” Spitzer said of the initiative. “Time and time again, I found the people of Orange County know better than the Board of Supervisors.”

A poll done by a respected Republican pollster in the fall found that 81.3% of county voters supported spending the tobacco funds on health care. However, critics noted that the poll did not propose specific spending alternatives.

The national tobacco settlement will bring about $21.33 billion to California through 2025, with additional payments after that. Half the money would go to the state and half would be split among the counties and four major cities.

Under the agreement, it is estimated that Orange County would receive an average $27.26 million a year, with the amounts fluctuating from a low of $26 million this year and next to a high of $32.13 million from 2018 to 2025, according to projections made in March by the California Independent Auditor’s Office.

The latest numbers are down from previous estimates that predicted revenues of $900 million to the county. Earlier totals did not account for a decrease of 3% a year in tobacco sales. The payments are based on population and tobacco companies’ revenue.

Discussions on how to spend the tobacco money began between county officials and health care advocates more than a year ago. They were stepped up last fall, shortly after the supervisors indicated that their preference was to spend about 80% of the tobacco settlement on jails and debt service.

Health care advocates have maintained that the bulk of money should go to reducing smoking and smoking related diseases, and to improving payments to doctors, hospitals and clinics who care for the indigent and working poor.

During Tuesday’s hearing, Assistant Sheriff Rocky Hewitt told the board that Carona “was very excited about the 60-40 [plan] and thought it was a worthwhile solution.”

Under questioning from Supervisors Tom Wilson and Spitzer, Hewitt said the sheriff believed the compromise would not alter plans for expanding Theo Lacey Jail in Orange or providing alcohol/drug-treatment beds, albeit at a slower pace.

In explaining his opposition, Smith said he could not endorse part of the plan that committed future boards to spend at least $40 million in general fund dollars on health, in addition to the tobacco funding. The $40 million is the amount the county has budgeted for health care in the coming fiscal year.

Smith also said that by paying down the county’s debt with tobacco money, the county could save $28 million a year.

“A good portion of that could be spent on health care,” he said.

But board discretion over the funds is the obvious sticking point and trust between the parties appeared to have ebbed.

“The health care community, and rightfully so, has no trust for this board,” said Spitzer.

Health care advocates insisted on the $40-million minimum because the county had cut general fund spending to $28 million after the bankruptcy and county officials had refused during recent negotiations to guarantee that there would not be future cuts, said Jon Gilwee, vice president of the Healthcare Assn. of Southern California, a hospital trade group.

“We needed the ongoing commitment,” he said. “We have been threatened that the level of health care funding would go down.”

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* WRENCH IN THE WORKS

Key Senate Republicans work to thwart Justice Department’s tobacco-industry lawsuit. A9

* DANA PARSONS

Show of hands, please: Who thinks the county has had too many ballot issues lately? B1

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Fighting Over Funds

Supervisors on Tuesday approved their most recent plant to split $763 million in tobacco settlement funds, ensuring that a local health care coalition--which has its own proposal-- will put the issue on the ballot in November.

Supervisors’ Proposal

Approved Tuesday (to be reevaluated after one year)

50% - Health care

50% - Bankruptcy dept and jail construction

*

Health Care Advocates’ Initiative

Proposed for November ballot

80% - Health care

20% - Law enforcement

* Includes emergency medical services, nonprofit medical clinics, long-term care of seniors and disabled, smoking prevention programs, hospital charity care

What Orange County Gets

Payments in millions

Current projection

1999 - $11

2000 - $26

2001 - $26

2002 - $31

2003 - $31

2004-07 - $28

2008-17 - $27

2018-2025 - $32

*

What Orange County Gets

Payments in millions

Previous projection

1999 - $11

2000 - $30

2001 - $32

2002 - $39

2003 - $39

2004-07 - $33

2008-17 - $33

2018-2025 - $37

COUNTIES

Payments in millions, except Los Angeles County which is in billions of dollars

Current projections:

Los Angeles - $2.8 billion

San Diego - $791

Orange - $763

San Bernardino - $449

Riverside - $371

Ventura - $212

Kern - $172

Santa Barbara - $117

Imperial - $35

CITIES

Los Angeles - $262

San Diego - $262

*

Payments in millions, except Los Angeles County which is in billions of dollars

Previous estimates:

Los Angeles - $3.4 billion

San Diego - $945

Orange - $912

San Bernardino - $536

Riverside - $443

Ventura - $253

Kern - $206

Santa Barbara - $140

Imperial - $41

CITIES

Los Angeles - $313

San Diego - $313

Graphics reporting by PETER WARREN / Los Angeles Times

Sources: County of Orange, Proposed initiative measure