Tobacco settlement goes from courtroom to state and local ballots

Friday, October 6th 2000, 12:00 am
By: News On 6

SANTA ANA, Calif. (AP) _ It's been two years since tobacco companies ended their coast-to-coast legal fights with states, but people in Orange County are still scrapping over how to spend their chunk of the nationwide settlement.

On Nov. 7, voters in six states and this corner of Southern California will decide how governments should spend billions in tobacco money.

Most ballot measures propose the windfalls for health programs. But in affluent Orange County, county officials still recovering from a 1994 bankruptcy see the money as a cure for debt, new jails and programs like drug treatment for jail inmates.

Doctors and other providers, however, weary of unpaid bills, want it spent on medical care for low-income residents.

``There is little to praise or recommend about the whole situation,'' The Orange County Register sighed in an editorial.

In late 1998, the tobacco industry ended a slew of health-related lawsuits by agreeing to yearly payments to states. Some $40 billion will cover four state lawsuits, plus $206 billion in a broader deal with the other 46 states.

Next month, voters will determine how states will use the money:

_ Arizona voters face two proposals for their estimated $3 billion over the next 25 years. One would put the money into health programs and the other would spend it on health insurance for the poor.

_ In Arkansas, a proposal backed by Republican Gov. Mike Huckabee would invest $100 million of the estimated $1.6 billion settlement in a health care trust fund. The rest, in $62 million annual payments, would go to research, smoking prevention and treatment programs.

_ In Montana, a proposed constitutional amendment would dedicate at least 40 percent of the settlement, $820 million in the next 25 years, to a trust fund for health services or insurance, and prevention of tobacco-related diseases.

_In Oklahoma, voters decide on a proposed trust fund for a large portion of the $2.3 billion settlement share, with the rest going to various health programs, including tobacco prevention.

_ In Oregon, voters get two choices on spending the annual $75 million payment. Both would funnel the money to a trust fund, but Measure 4 would spend it entirely on health care for the poor; Measure 89 would parcel it out to certain programs, including women's crisis shelters and transportation for elderly and disabled.

_In Utah, Proposition 2 would invest the tobacco money, about $1 billion over 25 years, and use the income for the general fund.

Nowhere is the debate more bitter than in Orange County, where county board discussions have ended in shouting.

Orange County, home to 2.8 million people and known for its wealth and conservatism, lost $1.7 billion in 1994 from bad bets on interest rates. It emerged from bankruptcy in 1996 still owing $1 billion.

The chance to pay it off fast looks mighty attractive to some.

California's share of the tobacco settlement is estimated at $25 billion over 25 years. The state is giving counties the money to spend as they like. For Orange County, that's $912 million.

County supervisors split 3-2 in favor of using to pay off the bankruptcy debt.

Then there are the dueling ballot measures.

Doctors and their allies formed Taxpayers for Reduced Healthcare Costs and sponsored Measure H. It would put at least 80 percent of the tobacco payments into health care for the poor. With no county hospital, the poor usually wind up in emergency rooms.

``Last year, the county had $200 million in uncompensated health care, money that was never paid,'' said Michele Revelle, coalition spokeswoman. ``Doctors aren't getting paid. Hospitals aren't getting paid.''

So the supervisors proposed Measure G. It would put 60 percent of tobacco money in various public health programs, like drug treatment in jails, and the remainder dedicated to reducing debt and building jails.

``Measure G is for 'good' _ good government,'' said County Supervisor Jim Silva. ``The taxpayers in this county are paying $80-$85 million in interest on this debt. That's unfair.''

Last year, Louisiana voters approved investing its tobacco money, $4 billion expected the first 25 years, for education and health programs.