Gov. Tom Vilsack and Republican leaders agreed Tuesday on a $55 million plan to spend Iowa's first installment of the national tobacco settlement, ending months of quibbling in a compromise that could pave the way for other budget negotiations.

"We have an awful lot of work to do," said Vilsack, a Democrat, who stood with leaders of both political parties to announce the deal. "What this does signal is: We can get our work done if we each listen to one another." The tobacco compromise is designed to create a wide-ranging health-care system to prevent illness and disease as well as treat substance abuse, Vilsack said. Iowa would become the first state to devote its entire share of the tobacco settlement to health care, the governor added. Republican legislative leaders and Vilsack reached the deal with two weeks remaining in the scheduled legislative session after each side agreed to moderate changes in its original plans. One of the biggest points of contention has been over putting some of the tobacco money into a savings account. Republicans initially wanted $9 million set aside in case the tobacco money ran prematurely dry in later years. Under the compromise unveiled Tuesday, $3.8 million would be set aside for future health programs. The tobacco agreement also would make health care more accessible to low-income and rural Iowans, and expand the state's insurance program for children in poverty. "It really provides that safety net in a way that we couldn't do otherwise," said Senate President Mary Kramer, R-West Des Moines. "It provides a good deal of prevention attention where it's most needed." The tobacco money stems from Iowa's nearly $2 billion share of the settlement signed by the tobacco industry and 46 states after a two-year legal battle. Since the lawsuit was settled in 1998, politicians have been giddy about the prospect of a new cash source that could be sustained for 25 years or more. But as new lawsuits against cigarette makers are settled across the country, Vilsack said he isn't convinced of the tobacco industry's financial health. So the governor and lawmakers are considering securing the settlement through outside investors to ensure the money will be guaranteed. While the historic national tobacco settlement was reached to recoup money paid to treat the illnesses of sick smokers, Iowa's health plan is designed to stop residents from ever picking up the addictive habit. Vilsack and legislative leaders have agreed to earmark $9.3 million for programs that curb smoking, but they have yet to work out the details. Republican leaders have said the money should be devoted to efforts to reduce smoking among teen-agers. Attorney General Tom Miller and anti-smoking activists have said money also should be spent to help adults kick the habit. "I think there's a recognition that clearly young people have to be a focus," Vilsack said. GOP leaders want to use Florida's highly successful campaign to discourage smoking among teens as a model for Iowa. The youth-driven campaign includes edgy television commercials that ridicule tobacco company executives and efforts to entice young people to smoke. Kelley Wilkinson, 17, a junior at Solon High School, witnessed Vilsack's announcement of the landmark tobacco agreement with legislative leaders. Helping teen-agers to resist the temptation of smoking will be money well spent, said Wilkinson, a participant in a project at the Capitol this week to help students experience how laws are made and how government works. "It's a vice - smoking and drug use among teen-agers," she said. "A big part of it is ignorance. The message is getting out to kids, but the more education that kids can get is better." Details of compromise Here is a closer look at the tobacco compromise, which still must be formally approved in the House and Senate: * Expanding access to health care: $20.9 million. * Special needs coverage for home services and respite care: $5.6 million. * Tobacco cessation: $9.3 million. * Other health initiatives: $2.8 million. * Substance abuse treatment and prevention: $12.5 million. * Savings account for healthy Iowans: $3.8 million. * Total: $54.9 million.

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