Missouri lawmakers still haggle over distribution of tobacco money
In a bank in New York City, in an account designated for the state of Missouri, $245,679,576.89 sits waiting in legal and political limbo.
The money was deposited there by the nation's cigarette makers as part of the November 1998 settlement of Missouri's lawsuit seeking to recover the state's cost of treating smoking-related illnesses among the poor.
The legal controversies are almost over: The Missouri Supreme Court rejected the last legal challenge to the settlement in December. Barring a last-minute notice of an appeal to the U.S. Supreme Court, the state will get its money on April 23.
But the question of what to do with the money once Missouri receives it has proven to be even thornier than the legal issues surrounding the multibillion-dollar agreement.
Despite more than two years spent weighing proposals, floating ideas, debating plans and haggling with interest groups, Missouri lawmakers are little closer to an agreement on how to use the money than when they started in December 1998.
"My sense is that it's still wide open," said Sen. Chuck Gross, a St. Charles Republican who heads the committee handling tobacco issues. "Anything could happen at this point."
With eight weeks left in the legislative session, 15 bills have been introduced suggesting plans for spending the tobacco funds. None has moved to the House or Senate floor.
Rep. May Scheve, a St. Louis County Democrat who heads the House Tobacco Committee, said lawmakers have discussed various scenarios behind the scenes for weeks. The work on concrete proposals has to begin soon, she said.
"It's getting to the point where the rubber has to meet the road," Scheve said. "We have to act because it affects so many Missourians."
The stakes in the discussions are enormous. The state expects to receive $4.5 billion over the next 25 years, so interest groups have lined up to try to get a share of the cash.
Scheve said a consensus appears to be emerging to spend the money in four broad areas: health care, anti-smoking programs, life-sciences research and early-childhood development.
"I think we're down to bargaining about the percentages going for the different areas," Scheve said.
But those areas mean different things to different people.
Gov. Bob Holden suggested a plan that would spend the money in those areas. But he included a prescription-drug benefit for the elderly as a central component of the health-care portion.
A plan put forth by House Speaker Jim Kreider, a Democrat, and House Republican leader Catherine Hanaway leaves out the drug program in favor of funding an endowment to ensure that programs could continue even if tobacco money dries up.
Holden's and the House leaders' plans would give most of the "health-care" money to hospitals, which have complained that government doesn't give them enough to cover the cost of treating the indigent.
"Some hospitals are in very bad shape," Holden said. "To keep them viable, we have to have a funding stream. And that will help maintain access to health care in both urban and rural areas."
But Scheve said some House members recently seemed to be shying away from allocating most of the health-care portion to hospitals.
Scheve said she was pleased that early-childhood development programs seemed to have solid support in the House.
But the Senate is considering a much wider range of uses. At least two Senate bills call for using some of the money for schools or school construction.
One suggests subsidizing property taxes owed by the elderly.
Gross said he wanted to limit use of the money to tobacco-related issues. Early-childhood programs funded with tobacco money should be related to anti-smoking projects or treatment of breathing disorders, he said.
"I've tried to stay away from the idea that if you stub your toe on the nightstand as you get out of bed to get your cigarettes, then it's tobacco-related," Gross said. "I think this money needs to be used to deal with the effect of tobacco on Missouri."
The Kreider-Hanaway proposal also would put the spending plan on the ballot for a public referendum in November. A proposal by Scheve and Democratic Rep. Tim Van Zandt of Kansas City also calls for a public vote and would place the spending restrictions in the Constitution.
Holden, however, said he sees no need for a public vote.
State tax revenues are well below the state's revenue lid, known as the Hancock Amendment. So the legal question of whether the tobacco money would put the state over the limit and have to be refunded to taxpayers is moot, he said.
"These funds are no different from money we get from the federal government," Holden said. "This was money we received to deal with problems that we had. I'll address the Hancock question when I face it."
Several proposals attempt to resolve the tobacco issue by leaving it to future lawmakers. They would set up an account to hold the money, which would allow the legislature to spend the money for that year's priorities.
Several senators have warned about tying the state's hands by earmarking the money based on today's problems when issues facing the state might be very different in 10 or 20 years.
Holden appears unfazed by the possibility that the legislature might fail to approve a spending plan for the third year in a row. He already has set up accounts to capture the money when it comes to the state. And those accounts earmark the money for his priorities.
Holden was asked what problems would be created if the legislature failed to adopt a plan.
"I think we're OK," he said with a smile.