Activists Skeptical of Tobacco Deal
NEW YORK (AP) -- Big Tobacco's big payout is about to begin, but leaders of the anti-smoking movement aren't celebrating.
Too many states, they say, are treating their cut of the $206 billion settlement as a multi-purpose budget booster rather than as ammunition for a decisive assault on underage smoking.
Water projects in North Dakota or new jails in Southern California are not what smoking opponents envisioned a year ago when five major tobacco companies signed the settlement with 46 states.
Over the next few weeks, state governments will start receiving the first installments from the biggest civil settlement in U.S. history. The total payout will average $8 billion per year over the next 25 years.
The initial expectation was that most of the money would support health programs, especially anti-smoking initiatives. So far, though, only a few states have come close to pledging the minimum amount suggested by federal officials to wage an effective anti-smoking campaign.
Many states instead plan to use the money for purposes unrelated to health -- deficit reduction, schools, capital construction.
Michigan's Legislature voted to allocate nearly 75 percent of its 25-year, $8.5 billion share to college scholarships, earning a rebuke from Miss Michigan during a recent Statehouse visit.
``That wasn't what the money was intended for,'' said beauty queen Audrie Chernauckas, who lost a grandmother to emphysema and a grandfather to lung cancer. ``I ask you 'Please, from in my heart, this is about our children's future.'''
Nineteen states have yet to decide how to spend their money; several others have created trust funds that could be used for several purposes, including anti-smoking programs.
But of the two dozen states that have detailed initial spending plans, only eight have made substantial new commitments to anti-smoking programs, according to the Campaign for Tobacco-Free Kids in Washington.
``The jury is still out,'' said Matthew Myers, the campaign's vice president and general counsel. ``Whether this agreement turns into a vehicle for major nationwide change depends on the actions of the state legislatures over the next two years.''
Most of the spending decisions made thus far are reversible, he said, and legislatures could easily increase or decrease the allocations for anti-smoking programs.
Federal experts at the Centers for Disease Control and Prevention have issued recommendations for effective programs that would consume roughly one-third of each state's settlement share. CDC Director Dr. Jeffrey Koplan remarked in August on ``the sad fact'' that no state was fully implementing the recommendations.
Health Secretary Donna Shalala is similarly dismayed. ``Most of those states assured us that they were going to use this money for health purposes,'' she said in September. ``I'm very disappointed in their failure.''
The states, as a group, reject suggestions that they reneged on promises.
``These were lawsuits that the states themselves took on,'' said Joan Henneberry, a health policy expert at the National Governors Association. ``We really do believe that state policymakers know better than anybody about the needs of the people in their states.''
Under the settlement, signed Nov. 23, 1998, the tobacco companies agreed to pay the money to cover 46 states' smoking-related health costs. The companies earlier signed separate deals with Mississippi, Florida, Texas and Minnesota for a combined $40 billion.
The companies also agreed to end billboard advertising and certain other marketing tactics, such as cartoon images like Joe Camel.
Anti-smoking billboards have gone up in several states. And tobacco companies raised cigarette prices by roughly 45 cents per pack, contributing to what government officials say is a 7.5 percent drop in cigarette consumption this year.
Many states signaled at the time of the settlement that health and anti-smoking programs would be their top priority, successfully resisting a federal attempt to mandate such spending.
``An expectation that 100 percent of the money be directed to the tobacco fight wasn't very realistic,'' said North Dakota's attorney general, Heidi Heitkamp, who heads the tobacco committee of the National Association of Attorneys General.
``Once we accepted that, it became a question of each state evaluating what is adequate,'' she said. ``If a state basically walked away from any obligation to address youth smoking, you'd have cause for concern.''
Such concerns have surfaced in several states among anti-smoking groups. Activists note that Massachusetts and California have cut youth smoking rates significantly with current campaigns, and worry that other states will miss out on a chance to do likewise.
Myers predicted that Massachusetts will become the national anti-smoking leader because it plans to boost its existing program with settlement money. He said California is squandering a similar chance by dividing its new money between its general fund and local governments.
A coalition of doctors, nurses and consumer activists is trying to put a measure on next year's state ballot that would force California to spend the new money on health care. Activists are particularly angered by Orange County's plan to use its share for debt retirement and jail construction.
``They forget what the tobacco settlement money was raised for,'' said Bruce Vancil of the county branch of the American Cancer Society.
In North Carolina, home to many tobacco growers, 50 percent of the funds will support economic development in tobacco communities.
The settlement did not end the tobacco companies' legal woes. The Justice Department is suing the industry to recover billions of dollars spent on smoking-related health care, and a Miami jury is considering a multibillion-dollar penalty against tobacco companies sued by Florida smokers.
Worried that tobacco companies may be unable to sustain payments over 25 years, some states are investigating the possibility of selling their settlements to private brokers. That way, the states are assured of getting at least some of their money.
``Between the federal government and the lawyers, they're going to kill the tobacco companies anyway,'' said Louisiana Gov. Mike Foster. ``So, if there's somebody in the private sector that thinks it's worth enough, I've always thought we ought to look at it.''