News
November 21, 2008
Tobacco settlement being misused, activists say
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In 2006, Alaska desperately needed cash to complete a museum featuring a mummified bison and other natural wonders of the frozen north. So the state dipped into its share of the landmark 1998 tobacco settlement.

The billions that began flowing from cigarette makers to the states a decade ago also helped outfit the Niagara County, N.Y., golf course with new carts and sprinklers. And the money has gone toward college scholarships in Michigan, tax breaks in Illinois and Ohio, a dogcatcher in Lincoln, Neb., and jails and schools elsewhere around the country.

Despite the promises of politicians and policymakers, states and counties have spent the lion's share of the settlement money on things that have nothing to do with public health or smoking, even as once-falling teen smoking rates have stagnated.

Of the $61.5 billion divided among 46 states between 2000 and 2006, only 30 percent was spent on health care, according to federal Government Accountability Office data analyzed by The Associated Press. Less than 4 percent went to anti-smoking efforts.

"A lot of people on both sides thought we were going to enter a new Eden, and we haven't," said Thomas Glynn, director of cancer science and trends at the American Cancer Society.

In June 2007, the state of West Virginia sold its rights to all tobacco settlement payments through 2029 to bond holders for a total of $911 million.

The state's share of the bond issue, $807 million, was transferred into the Teachers Retirement System to help pay down a huge unfunded liability for teachers' pension costs.

The state budgets about $6.6 million a year for tobacco cessation programs - or less than one-fourth the $27.8 million that the Centers for Disease Control and Prevention reported in 2007 the state should be spending each year to undertake an effective anti-tobacco effort.

States defend the myriad ways they have spent their tobacco money, which is still being paid out in annual installments and is expected to total $294 billion over 25 years in today's dollars. They note that no strings were attached to the settlement reached on Nov. 23, 1998, and that anti-smoking campaigns do not cost billions.

"Our view was, that was money that we had to spend as a result of tobacco-related illnesses. This was paying us back for that," said Scott Pattison, executive director of the National Association of State Budget Officers.

States had sued the industry to recover the crushing costs of treating smoking-related illnesses in people enrolled in public health programs such as Medicare and Medicaid. Big Tobacco also agreed to eliminate advertising aimed at teenagers. In return, it won protection from future lawsuits.

At the time, many states intended to spend settlement money on health care and anti-smoking campaigns.

"We should use this money to fund cancer research, offer health insurance to the poor, keep kids from smoking and arrest those who sell tobacco products to our children," said then-Pennsylvania Attorney General Mike Fisher.

But even then, lawmakers and others were eyeing the money for other needs.

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Posted By: cubbinincmh (5:11pm 11-21-2008)
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Governments dont want us to quite smoking. They take in huge sums of money from tobacco taxes, then take the settlement money, and then still dont provide health care for most people. Guess what, I smoke, work my tail off, and have my own insurance. Between liking to smoke, drink, being a homosexual, not married, and having no kids I pay more taxes than almost anyone. Im sick of paying for everyone else...

Posted By: misterhigg (6:09am 11-21-2008)
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Sounds like what the federal goverment has done to the so-called Social Security Trust Fund.

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