Tobacco Settlement Money Disputed

Billions of dollars from the nation's landmark tobacco settlement are being put to use across the country, but only about 5 percent is going to smoking prevention, according to a report released by the National Conference of State Legislatures.

The 1998 settlement signed by the tobacco companies was meant to compensate the states for years of smoking-related health expenses. Forty-six states signed it and four others settled separately for an additional $40 billion.

The state attorneys general who negotiated the settlement expected it to be used to fight the spread of smoking and prevent tobacco addiction, but the documents left it to the states to decide how their shares of the money would be spent, according to the Associated Press.

The Centers for Disease Control and Prevention has said that at least 20 percent of the $206 billion settlement will have to go into prevention programs for the states to effectively cut future tobacco-related health expenses.

In its report, the National Conference of State Legislatures analyzed the states' plans for their shares of the tobacco money during the fiscal years 2000 through 2002. Of the $21 billion being doled out during that period, it found:
* 36.1 percent had been set aside for health care.
* 26 percent went to bolster endowments or state budget reserves.
* 9.5 percent was to be spent on schools or youth programs.
* 5 percent was to go into tobacco prevention.
* 4.5 percent was to be put into research.
* 3.2 percent was to be used to assist tobacco growers and communities affected by the reduced quotas from tobacco companies, in most cases by offering education and training in other fields.

More than half the money is being used in ways unrelated to smoking, the study found. For example, several states are tapping their tobacco settlement payments to make up shortfalls in their state budgets and bolster programs that have nothing to do with tobacco, the report said.

Tennessee will use its $557 million to meet budget shortfalls in 2002. North Dakota is using 45 percent of its tobacco funds to pay for debt service on bonds financing a water allocation and flood project, the Associated Press reported.

"It's moral treason to me," Mississippi Attorney General Michael Moore told The New York Times. "We got all this money, then legislatures and governors who were not even in this fight act like the money fell out of heaven and spend it on the political whim of the day."

Lee Dixon, director of the NCSL health policy tracking service, said several states held public hearings to solicit opinions on how the funds should be used. He said about 45 percent of the money is being used for some type of health care, including long-term care, health care for the poor, biomedical research or tobacco prevention.

Washington state chose to set aside all but $32 million of its $408 million for a state-funded program for workers who don't qualify for Medicaid and can't afford health insurance. Michigan over the past two years has put $90 million into a trust fund for biomedical research and research on illnesses affecting the elderly, and Colorado passed legislation directing 10 percent of its tobacco funds to a pharmaceutical assistance program for the elderly and the disabled, the report said.
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