Tobacco suit billions are in demand: Counties, cities debate the best use of funds
As chairwoman of the Yolo County Board of Supervisors, Lois Wolk would like her county to remain true to the state's lawsuit against the tobacco industry. She wants the millions of settlement dollars coming to Yolo to pay for health care and efforts to re
Some of her board colleagues, however, don't really know when they will see this much money again. They would like to use the expected $53 million -- to be paid over 25 years -- to fund projects that have been stalled for years, like a new juvenile hall. The battle over tobacco funds in Yolo County is mirrored throughout the state. California is expected to receive $1 billion annually from a $206 billion unfair business practices lawsuit settlement between 46 states and leading U.S. cigarette makers in November 1998. Half the money will go to the state's general fund. The rest will be divvied up among California's 58 counties and the cities of Los Angeles, San Diego, San Francisco and San Jose, based on population.
While cities and counties are debating what to do with the money, which the state says can be used generally, health advocates are exerting pressure to spend it on health-related programs only.
Only San Diego and Alameda counties have decided to spend all their settlement money on health. Others are looking to disburse the money on construction or expansion of police stations, jails and roads; repayment of debt; and in Los Angeles, to pay off lawsuits stemming from alleged police corruption.
In the Sacramento region, counties are looking at brick-and-mortar projects. Placer County is planning to examine the issue more closely this summer but has tentatively put the funds in reserve for future building replacement and maintenance. El Dorado's board adopted a policy to use the money for capital improvement, too. Sacramento has scheduled a hearing Tuesday, and already has heard requests from the Probation Department to expand juvenile hall with tobacco funds.
"The fact is the money would never have come to the state had it not been for the health-related lawsuit," said Wolk of Yolo County. "The lawsuit against the tobacco companies was based on the health effect of tobacco; in fact, the death of people because of the use of this product. And I feel it's unconscionable to use one dime of that money for any use that isn't related to health."
Leaders in the medical community and others echo that.
Muriel Brandt, of the Maternal Child and Adolescent Health Program, delivered to the Yolo board earlier this year a missive bearing the county's own Health Department letterhead. In it, the program's advisory board "strongly urges the Yolo County Board of Supervisors to provide for the 'advancement of public health' and reaffirm that purpose in the local allocation of tobacco settlement funds."
The Yolo County Contractors Alliance, made up of private nonprofit agencies with whom the county contracts for mental health and drug and alcohol services, also appealed to the board to appropriate all funds for health treatment and education.
Counties like Yolo, however, are generally strapped for cash. In Yolo's latest $195 million budget, $27 million is general purpose revenue. But that belies the true discretionary amount that the board can use for capital projects, County Administrative Officer Vic Singh said.
The county actually has about $1 million to spend on improvement and maintenance of buildings and roads, because state and federal mandates and other directives tie up most of the money.
"People do need to remember we're already spending millions of dollars on health," Yolo Supervisor Tom Stallard said. About 15 percent of the county's budget, or $29 million, is currently spent on health and alcohol, drug and mental health services.
In the meantime, the juvenile hall remains "a dungeon," Stallard said. "I'm a little embarrassed our conditions are as poor as they are now."
Like Sacramento County, Yolo often experiences serious overcrowding in its juvenile hall.
Chief Probation Officer Mel Losoya said the facility, which was built in the 1970s and can accommodate 30 youths, has an average daily population of 35. But as recently as last month, there were 48 juveniles in custody.
"Juvenile behavior has changed; because of that, we need the additional bed space," Losoya said.
Part of the problem, too, is the facility's design. Losoya said more youths could be supervised more safely if the hall's rooms were arranged in circular pods instead of along straight hallways.
Other experts concur. The Yolo juvenile hall has recently been denied accreditation by the California Medical Association and was reproved twice by the county grand jury, first in 1998. In September 1999, the Grand Jury conducted a special investigation and found the safety of the staff and the wards to be at risk.
A state Board of Corrections official toured the facility at Losoya's request in December and found problems with the design and staffing.
Gary Wion, the corrections board representative, cited inoperable security cameras, an unreliable personal alarm system that staff depends on in the event of emergencies, regular staffing shortages and door locks that are in constant need of repair.
In short, he recommended scrapping the whole facility.
Supervisor Wolk said she recognizes the need for a new juvenile hall and would support one, but she doesn't want to divert the tobacco settlement funds from health services. "I just think we need to use other funding sources. We have not been willing to put in the effort," she said.
Another problem for Wolk is the method by which the county wants to secure the juvenile hall construction funding. The staff has proposed taking a discounted lump sum up front and forsaking half of future annual payments.
Wolk said she is uncertain she wants to risk losing future proceeds.
County analysts, however, said those future payments cannot be guaranteed. They depend on continued cigarette purchases, and the payments, which began in March, would stop if enough people stop smoking. Also, a pending federal lawsuit may take money away from the states' settlement.
Those who support using tobacco money for capital projects emphasize that the county still plans to dedicate more than half of the tobacco payments to health services over the life of the settlement. A new juvenile hall would take 18 percent of the total funds.
Staff also has recommended that the settlement money be used to fund other projects, such as road repairs and a new health facility because the current one is cramped and has leaks.
Although the majority of the board indicated in its intention in February to use the funds for pressing needs -- whether they're health-related or not -- they decided to postpone a formal decision until later this year.