SAN JOSE, Calif. (AP) - A proposal to use tobacco settlement money to provide health care to every uninsured child was voted down Tuesday by the city council.

By a 6-to-5 vote, the council rejected a proposal to allocate $2 million of the city's settlement money from tobacco companies to cover its estimated 37,000 uninsured children. Mayor Ron Gonzales and council members who rejected the proposal stressed that their vote does not mean the proposal is dead. Rather, they said the city needs time to analyze it further. ``I'm open to that idea,'' Gonzales said. ``But we have to be careful. We have to make sure that we're doing it not just because it sounds good. We have to do it effectively.'' The council set up a committee to determine how to spend the city's share of the nationwide tobacco settlement - roughly $10 million per year for 25 years. Gonzales had initially suggested other priorities, including senior services, schools and tobacco education. San Jose, one of a number of cities in 46 states grappling with how to spend the money, is believed to be the first to consider using it for public health insurance, an arena traditionally covered by county and state governments. The proposal's key proponent, Councilwoman Margie Matthews, said uninsured children will be forced to compete with other programs for a portion, if any, of the tobacco money. ``The idea was to leverage the money now,'' she said. ``But the mayor said it's the beginning of the discussion, and I hope that's true.'' The council ordered staffers to return Sept. 1 with a timeline for making a decision on spending the settlement money.

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