San Jose leaders reject providing health insurance for city's kids.

Byline: Noam Levey

SAN JOSE, Calif. _ San Jose city leaders Tuesday rebuffed a bid to make the city the first in the nation to guarantee health insurance for children, as a deeply divided city council adopted a $1.85 billion budget with no money for children's health care.

Despite pleas from hundreds of community leaders, educators, pastors and citizens, Mayor Ron Gonzales led a slim council majority that rejected a proposal to use $2 million of the city's tobacco settlement money to insure San Jose's estimated 37,000 uninsured children.

"I'm open to this idea," the mayor said, concluding two days of unusually emotional hearings on the issue. "But we have to be careful. This is not an area where we have experience, expertise or success."

Five of his colleagues agreed, narrowly passing a budget that allows proponents of the children's health care initiative to apply for tobacco …