Group Seeks to Renew Talks on Tobacco Funds
A health coalition seeking to break a stalemate with Orange County supervisors over how to spend the county's $900-million share of a national tobacco settlement has asked board members to appoint a negotiation subcommittee.
The coalition--Citizen's Health Alliance to Reinvest the Tobacco Settlement, or CHARTS--had been pushing to have much of an estimated $38 million a year in tobacco settlement dollars spent on health care. But supervisors were willing to commit only about $7 million to $8 million a year for health over the next decade, with the bulk of the remainder being spent on jails and retiring the county's debt from the 1994 bankruptcy.
The group offered to renew negotiations in a letter sent Friday to Gary Burton, the county's financial officer, asking that the supervisors take the tobacco settlement plan off their agenda for today's meeting and appoint a committee.
At least two supervisors said Monday they would consider reopening negotiations provided the coalition softens its stance that most of the money should go toward health care.
"I'll go with [appointing a] subcommittee so we can still negotiate," Board Chairman Charles V. Smith said. "But they're asking way too much with their proposal to use all the money for health care. They don't want to compromise."
But Supervisor Cynthia Coad said she would not support the coalition's proposals and noted that part of the county's proposal for building jails includes drug rehabilitation.
"[The coalition] is not taking into account the drug rehabilitation program, which is a health issue," Coad said.
Two weeks ago, the coalition began gathering signatures for a countywide initiative requiring that 80% of the settlement money be spent on health care and anti-smoking efforts. The group must get 71,206 valid signatures of registered voters by the end of May to win a place on the Nov. 7 ballot.
Besides asking for the creation of a subcommittee to negotiate an agreement, the coalition is proposing that any compromise be placed on the November ballot for voter approval and that supervisors pledge that they will not seek a counter-initiative for the same election.
* * *
Supervisors have voted twice previously on using any windfall from the tobacco industry, to be paid out over 25 years, mainly for jail expansion and debt reduction. By paying down debts early, county administrators hope to free up $23 million to $28 million a year in general fund money that otherwise would have gone to interest payments.
To finance a jail and also free up revenue, county officials want to leverage part of the tobacco funds through a nonprofit agency, which then would sell bonds tied to the tobacco settlement and use the proceeds to help pay for jail expansion and reduce part of the bankruptcy debt.
What makes the bond plan so attractive, Smith said, is that it protects the county from any potential liability in the event that tobacco companies file bankruptcy in the future and payouts are threatened.
Bankruptcy for the tobacco companies began to loom as a possibility recently because of a trial in Florida that observers say may result in a huge financial windfall for smokers. If the jurors in the Miami case award compensatory damages to the smokers, they next would be asked to consider whether to award punitive damages, which analysts have estimated could total hundreds of billions of dollars.
"We can still opt to put more money in health care at a later date," Smith said of the board's spending outline. "But with their plan they would completely tie our hands."