Be Selective With Windfall

California will soon get the first installment of its $25-billion share of the national tobacco settlement. That first chunk, about $562 million over the next fiscal year, raises a pressing question: What’s the best use of this windfall?

The major tobacco companies last year agreed to settle dozens of lawsuits brought by states. In exchange for the dropping of suits that sought reimbursement for the public cost of treating sick smokers and that accused cigarette makers of violating antitrust and consumer protection laws, the companies promised to pay a national total of $206 billion and limit their advertising and lobbying. California’s share of this pot, nearly 13%, is the largest of any state. All California counties and some cities, including Los Angeles, will get some of it.

There are absolutely no strings attached to this money; state and local officials can spend it on road repair, prison construction, AIDS education--anything.

Gov. Gray Davis has, for now, directed the first payment to the state’s general fund, to help close the $2.3-billion shortfall in state revenue projected for the next fiscal year. The Legislature will also get a say about how to spend the money. At this point, some options make more sense than others.

Of the 46 states that participated in the settlement, only Idaho has fully decided how it will spend its share. Earlier this month, Gov. Dirk Kempthorne signed legislation putting the first two years of Idaho’s tobacco money into a reserve fund. Many states are poised to follow this lead, directing most of their tobacco money to their reserve fund or general fund as well as to smoking prevention and cessation programs. But there’s a wide world of other ideas under discussion, including funding health care for the uninsured (Illinois), a museum depicting the evils of tobacco use (Montana), teacher pensions (Oklahoma), programs to help tobacco farmers (Virginia), foster care and day care (Alaska), firefighting equipment and college tuition assistance (Connecticut).

In California, there’s been little debate as yet. The legislative analyst’s office, in a report last month, sensibly advised lawmakers to recognize that this gravy train will end eventually and warned them not to dedicate the money to new programs for which future funding doesn’t exist. For that reason, Davis administration officials argue that putting the tobacco money into the general fund is fiscally prudent and will benefit the widest range of state programs. Yes, but maybe some programs, like providing health care to the growing ranks of California’s uninsured or underinsured, need help more than others.

The legislative analyst also urges state officials to monitor new anti-tobacco programs and spending by local governments to avoid duplication. This is sound advice. The tobacco litigation and other initiatives such as California’s Proposition 10 have given rise to an explosion of educational campaigns aimed at keeping kids away from cigarettes. Teenagers can take just so much admonishment before the thing they’re warned against becomes the thing they must do. What’s needed here is systematic evaluation--of what kinds of messages reach kids, which don’t and at what point youngsters start to tune out even the best messages. This also seems a worthy endeavor for a small portion of California’s tobacco lucre.