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SACRAMENTO – California counties got a windfall that will total more than $10 billion over 25 years with the 1998 settlement of a multistate lawsuit against the tobacco industry. 

But counties aren’t spending the money on smoking cessation and anti-tobacco campaigns. Instead, financially strapped counties are using it for various projects, including an animal shelter, road repairs, debt repayment or just to prop up general funds. 

Of the $1.2 billion doled out to local governments so far, only 18 percent has been invested in health programs. Less than 6 percent has gone to prevent smoking, according to figures calculated by the Tobacco Industry Monitoring Project, a state-supported program based at the University of Southern California. 

The 58 counties and three cities each receive an annual payment based on population and tobacco sales, as part of the 1998 Master Settlement Agreement with major tobacco manufacturers. 

But not enough of that money is going “to adequately fight the tobacco industry’s campaign to recruit new smokers,” said Paul Knepprath, vice president of government relations for the American Lung Association of California. 

California expects to receive about $21.4 billion over 25 years from the 1998 multistate settlement with tobacco companies. Half of that will go to the state’s 58 counties and the cities of Los Angeles, San Diego and San Jose. 

For fiscal year 2001-2002, California will receive about $475 million, with an equal amount going to the counties. The state is investing $401 million in health and anti-tobacco programs, and putting the balance into the general fund. 

The Lung Association and the Tobacco Industry Monitoring Project have tracked where local governments are spending their funds. No state or federal agency keeps that data. 

County spending is “all over the map, which is what you would expect from counties that have been strapped for cash for years,” Knepprath said. 

Some counties, such as Merced, have are considering selling future payments for a lump sum, trading a fluctuating revenue stream for a secure amount of cash. Merced plans to use its estimated $26 million to build an animal shelter and a new juvenile hall. 

Deputy County Administrator James Brown said Merced has delayed those two projects for years and the tobacco money means they can actually start building. 

Tight budget years recently means “local governments just haven’t been able to keep up on capital projects,” he said. 

Lake County supervisors have dedicated $400,000 of their expected payment of about $600,000 to bring a sewage treatment plant up to compliance with state health codes, said county administrative officer Kelly Cox. 

“We really have to do those upgrades,” Cox said. “It could be a huge health issue otherwise.” 

Lake County will spend the remaining money on a home-health care program for seniors. 

The American Lung Association opposed the settlement when it was being negotiated, Knepprath said, because it didn’t have any guarantees the money would go to smoking prevention or treatment for tobacco-related illnesses. 

In the settlement’s fine print, Knepprath said, it was clear “it was a pot of money going to every state,” which didn’t follow the settlement’s intent. 

The 46 participating attorneys general said in the settlement’s preamble that they sued to obtain money to pay for states’ health care and anti-smoking programs. 

The Centers for Disease Control and Prevention recommended that states dedicate a good portion of the funds, which will total $202 billion over the life of the payments, for anti-tobacco programs. The recommendation varies by state, according to population, but is about 20 percent. 

A study released earlier this year by the National Conference of State Legislatures found that states were only spending 5 percent of the money on those programs. 

When they negotiated the settlement, the attorneys general were told by other state officials that it wasn’t up to “the AGs to appropriate the money,” said Christine Gregoire, Washington state’s attorney general and one of the chief negotiators. 

The final settlement may not spell out how to spend the money, but “it’s restitution in a lawsuit for damages, and if you understand that concept, you know that all the money needs to go to health restitution and tobacco control.” 

Not so, said Tulare County administrative officer Janet Hogan. Tulare sold their payments for an upfront sum of $45 million, which will be spent on capital projects. 

The settlement intended for each county to decide how to spend the money, Hogan said, and Tulare County has already spent enough on tobacco education. 

State officials are blowing a great chance to improve health care, Gregoire said, “simply because governors and AGs didn’t stand up and do the right thing with the money.” 

Of the California counties, Los Angeles County will get the most money, which the attorney general estimates will be about a total of $2.6 billion. The county has earmarked all money to go to anti-smoking programs for the entire 25 years. 

In Ventura and Orange counties, voters determined how the funds would be directed. Ventura voters overwhelmingly rejected a private hospital’s plan to use the money for private hospitals, and county supervisors voted to spend the money on health programs. In Orange County, voters approved a similar plan, although county officials haven’t determined how the money will be split. 

Santa Clara County and the city of San Jose are using large portions to pay for insurance for all children in the county. 

In Contra Costa County, all of this year’s expected payment of $10.8 million will go to health care, because county supervisors decided early to spend all the money on health services, said Julie Freestone, director of the county’s tobacco control project. 

But none of the money was earmarked for smoking prevention or cessation programs, she said. 

Knepprath said that tug-of-war, even between health issues, is happening in all counties and across the nation and further pulls support from anti-smoking campaigns. 

“Even the money spent on health, spent on kids with asthma, doesn’t prevent people from smoking and doesn’t help people quit smoking,” Knepprath said. “There is so much evidence that prevention programs save the state money in the long run, but often times these decisions aren’t made on long-term strategies, but short term crises.”