County weighs windfall: Plan unveiled for using tobacco settlement funds
Sacramento County officials have unveiled a plan to spend most of a tobacco litigation windfall on health needs small and large -- from defibrillators at capital golf courses to a $30.5 million primary care clinic.
Sixty-two percent of the total $214.8 million expected from the deal would go toward health, including new programs, facilities and capital improvements. A key recommendation calls for creating a $2 million trust fund to build a health-care system for the estimated 200,000 people in Sacramento County who lack private or government insurance.
An additional 25 percent is earmarked for youth issues, ranging from mentoring and teen-pregnancy programs to $40 million for expansion of Juvenile Hall. Officials also want to use some of the proceeds for other community needs, including a $6 million new animal shelter and improvements in libraries, curbs and sidewalks in older, unincorporated-area neighborhoods.
Funding would come from Sacramento County's share of a $206 billion settlement of a lawsuit filed against the tobacco industry by 46 states including California. The Board of Supervisors is set to consider the spending recommendations during the 2000-2001 budget hearings, which begin Sept. 5.
"This is a one-time opportunity to provide services to the community that we otherwise wouldn't be able to undertake," County Executive Terry Schutten said.
"We tried to balance the recommendations with an emphasis on health. The goal is to have the largest impact possible on the entire community."
California is expected to receive $1 billion annually from the lawsuit, with half going to the state treasury and the rest divided among the 58 counties and four largest cities. While payments technically continue indefinitely, the amounts are tied to U.S. cigarette consumption, inflation and population.
Concerned that future payments could drop as cigarette sales decline, budget analysts developed a plan to secure Sacramento County's entitlement now by selling bonds backed by future payments. The present value is $214.8 million, which supervisors divided into three funds to maximize flexibility in spending.
The largest fund, $104 million, is earmarked for big-ticket projects such as a new primary care clinic and 90 additional beds at Juvenile Hall. Other recommendations include:
$15 million to convert the county's fleet of garbage trucks to cleaner burning vehicles;
$2 million for an expanded kitchen for the Senior Nutrition feeding program;
$5.2 million for library construction; and
$1 million to repair older sidewalks, curbs and gutters in unincorporated communities.
A second fund dedicated to health, youth and tobacco-education programs is expected to generate $6.3 million annually for 15 years, a total of $94.5 million. For 2000-2001, officials are recommending 27 programs chosen from 171 applications from county and outside providers.
"They all look like good projects," said Robert David of the Hospital Council, which led a coalition that urged the county to spend the endowment money on anti-tobacco programs and public health for the poor.
Supervisors have already directed most of the third settlement fund, totaling $16.3 million, for county reserves. Staff is recommending that $2 million be used to start a community trust fund that would provide access to health care for uninsured working people.
Officials see the expenditure as seed money that would draw contributions from other sources, including government and private groups. The goal is a minimum $10 million endowment that could be used to pay for coverage for working families and others who fall into the gap between Medi-Cal and private insurance.
"This is something that is very exciting," Schutten said. "It would put Sacramento in a leadership position on this in California."
The proposal was welcomed by Rebecca Stark of Sacramento Area Congregations Together, which has lobbied for tobacco litigation money to fund a pilot project for low-cost health insurance.
"In some of our churches, as many as 60 percent of members don't have health insurance," Stark said. "I visit families every week who each owe a couple of thousand dollars to UC Davis Medical Center because they go to the emergency room there when they need care because they don't have insurance."