California will receive $387.9 million during the 2000-2001 fiscal year, according to Gov. Gray Davis' budget proposal. Half will go to the state's 58 counties and the four cities included in the 1998 settlement. The state Legislature must approve the governor's budget proposal on how to spend California's share. Last year California received $315 million from the multistate settlement, which will funnel a total of $25 billion to the state over 25 years. The money is intended to repay the state and local governments for health care costs associated with the hazards of smoking. Preventing and treating tobacco-related illnesses costs the state about $2 billion annually in Medi-Cal expenditures, according to the budget proposal. "We really see the infusion of these new funds from the settlement as reimbursement," said Hilary McLean, the governor's deputy press secretary. Overall, the proposed budget would spend about $1.5 billion more than currently on Medi-Cal, the Healthy Families Program for children and other health initiatives. The tobacco settlement money and rising tax revenues would pay for the increase. One of four companies involved in the settlement, Philip Morris USA, encourages states to use the money for programs aimed at reducing smoking among youths, company spokesman Tom Ryan said. "Clearly, that's an area where Philip Morris has common ground with even our top critics," he said. "Reducing the number of kids who smoke is the right thing to do." The proposed budget increases in health spending include: --$111.5 million more to pay health care costs for low-income children, seniors and veterans. The expansion would reach an additional 91,000 children. --$245.8 million to expand Medi-Cal benefits to working poor and two-parent families. An additional 250,000 parents of children currently enrolled in Medi-Cal would be covered. --$23.9 million to improve nursing and medical care at veterans homes. --$55 million more for hospitals and trauma care centers that serve a disproportionate share of poor and uninsured patients. --$25.7 million more for the state's anti-tobacco media campaign. --$100 million dedicated to biomedical research and equipment purchases at University of California teaching hospitals. -- Offering stop-smoking counseling at all 86 offices of the Women, Infants and Children program, which provides food and health care to poor families. Only 37 sites currently offer such counseling.

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