Where states' tobacco money is going

Instead of antismoking efforts, the windfall is being used foreverything from college loans to morgues.

States that wrestled a $206 billion settlement from tobacco companies last year are now acting as if they've won something else: The lottery.

Governors and statehouse legislators are cheerfully earmarking portions of their windfall for specific purposes, though most of it won't arrive for years. In Michigan, some settlement funds have been parceled out for college scholarships. West Virginia wants to use part of its portion for public employees' insurance. North Dakota officials might build a new state morgue.

Few states are using their settlements for big antismoking efforts, at least so far. Only six have made major commitments to cessation programs with their tobacco funds, according to just-released figures.

Public-health advocates argue that the states have a moral obligation to use tobacco-firm payments to fight smoking. But they admit that in the modern world, state officials face many clamorous demands for scarce public resources.

"Overall the picture is not pretty," says Peter Fisher, manager for state issues of the Campaign for Tobacco-Free Kids. "But I don't want to suggest that some of these things states are spending money on are not worthy causes."

Nine months ago, 46 states agreed to the unprecedented big tobacco settlement. In return for the multiyear $206 billion payment, the states dropped lawsuits that asked the companies to pay for past smoking-related Medicaid expenses and consumer-fraud charges.

Four other states settled separately for a combined $46 billion.

Early on, Uncle Sam felt that he was entitled to a hefty slice of this windfall pie. After all, Washington helped fund Medicaid, and had paid out billions to treat smoking-related illnesses, too.

The Clinton administration offered the states a deal: The federal government would not make a direct claim on the money, if the states agreed to spend a set percentage on certain programs, particularly smoking cessation and prevention.

States fought this claim and applauded when Congress voted to prohibit the federal government from making any claim on the tobacco funds.

"We are committed to spending a significant portion of the tobacco settlement funds on smoking cessation and prevention programs," said then-chairman of the National Governors' Association, Thomas Carper (D) of Delaware.

So far this year, 27 states have dealt with the question of how to spend their tobacco-settlement money, according to the Campaign for Tobacco-Free Kids.

General public health is one of the most common recipients of settlement largess. More than half the money that has been allocated so far will go toward health-care services, according to the new figures from the National Conference of State Legislatures.

This summer, for instance, Maine Gov. Angus King signed a measure that allocates all of the state's initial $18.5 million settlement payment to a newly created Fund for a Healthy Maine.

Education programs have also gotten a substantial settlement boost, receiving 20 percent of already allocated funds.

General purposes have received about 11 percent of the money so far. Louisiana allocated 55 percent of its initial $110 million payment to help balance the state budget. Montana used $800,000 of its first $37 million payment to finance a boot camp for juvenile delinquents.

That means that about 10 percent of this year's $1.3 billion of appropriated settlement funds will be earmarked for tobacco control and cessation programs. To many governors, that is an appropriate down payment on their vow to fight smoking. To critics, it is far too little to make a big difference.

The Campaign for Tobacco-Free Kids complains that only six states have made major antitobacco investments - Hawaii, Maryland, Minnesota, Vermont, New Jersey, and Washington.

The other 10 states that have dedicated funds to antismoking efforts will spend far less than the US Centers for Disease Control and Prevention (CDC) recommends for an effective program, says the antitobacco kids group.

Activists aren't the only people criticizing states spending. "Most states have not earmarked significant settlement funds for tobacco control, and no state is currently implementing all of the recommended program components fully," said CDC director Jeffrey Koplan last week.

State officials reply that the criticism is, if nothing else, premature. At least 19 states have yet to decide how to spend their tobacco funds. Some of those states which have acted, such as California, already have extensive smoking-cessation programs funded from other sources.

"Governors don't want to put money into antismoking intervention programs that don't have a proven track record," says Joan Henneberry, the deputy director of the health policy studies division of the National Governors' Association.

(c) Copyright 1999. The Christian Science Publishing Society

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