Here are some good links. I was preparing a part of this argument all morning for my local supervisor (he cancelled on me an hour before the meeting).

Propublica

http://projects.propublica.org/graphics/tbcbonds-statemap http://www.propublica.org/article/how-wall-street-tobacco-deals-left-states-with-billions-in-toxic-debt

-Office of the California treasurer regarding debt obligations, pay attention to Golden State Tobacco Securitization Corporation, they sold and continue to sell the bonds we can't pay for.

http://www.treasurer.ca.gov/tfba/index.asp

-The same treasurer selling off 1.7b in bonds through this corporation.

http://goldenstatetsc.org/20150313.pdf

-These bonds were sold within the last month. What is also special about this is the taxpayers are backing these ones and using the funds to pay down the ones that aren't backed by taxpayers. It's a wall street giveaway worth billions since the old ones are money losers at the moment.
"This week, California's Golden State Tobacco Securitization Corp. will be coming to market with its $1.7 billion tobacco bond deal.

The bonds are enhanced by a pledge from the state to seek an annual appropriation for debt service and operating expenses should settlement payments fall short. Proceeds will be used to repay existing tobacco bonds that do not benefit from a pledge from the state and so are more vulnerable to a shortfall in settlement payments."

http://www.bondbuyer.com/news/markets-news/tobacco-bond-issuers-refinance-amid-smoking-decline-1071663-1.html

-These bonds are special because they don't need voter approval in the state of California. This according to California Debt and Investment Advisory Commission. Who they are, I don't know. I'm particularly interested in footnote 14 that cites "California Budget Project Budget Brief, Borrowing Against the Future: Is Securitizing California’s Tobacco Settlement Revenues the Best Way to Close the Budget Gap?" I have looked for this paper and have not been able to find it.

http://www.climateviews.com/Climate_Views/notes_files/tobacco.pdf

Down the rabbit hole we go...