Tobacco settlement division is reached
FRANKFORT- County projects would get just over one-third of agriculture's share of the tobacco settlement money under a compromise reached yesterday after some tough negotiations.
The agreement means 35 percent of the money set aside for agriculture will go for projects in specific counties based on a formula that takes into account their dependency on tobacco while the other 65 percent will go for projects under a statewide board.
The compromise on House Bill 611, setting out how to spend more than $1 billion to help agriculture as tobacco withers, was the best plan for farmers and rural communities, said Rep. Roger Thomas, D-Smiths Grove.
``I think it offers the best opportunity for moving agriculture forward and for changing agriculture,'' he said.
Yesterday's agreement resolved one of the biggest issues of the 2000 General Assembly. Friday, the House and Senate will vote on it.
Some House members who had pushed for more money for counties were not happy with the final 35 percent figure, however, saying it won't mean enough money for places hit hardest by steep declines in tobacco.
``It's not OK, but that's the way it is,'' said Rep. Pete Worthington, D-Washington, who with Republican Rep. Tommy Turner of Somerset did not sign off on the compromise.
``We're helping everybody else in trouble and when the poor old tobacco farmer falls on hard times through no fault of his own, we don't show the sensitivity and support for them we've shown for other areas,'' Worthington said.
Senate negotiators had pushed for sending less money to counties, arguing that a coordinated spending approach at the state level would be more effective.
Gov. Paul Patton will accept the 65-35 division because it will allow the state to develop comprehensive programs while also helping specific places hurt by the downturn in tobacco, said John-Mark Hack, director of agricultural policy for the governor.
Members of the Community Farm Alliance said they were happy with the deal because it includes their ideas on how to measure the success of programs funded by the settlement, and because farmers will have a strong voice in spending decisions.
``Controlling our destiny, that's what we wanted,'' said Martin Richards of Mercer County, a past president of the alliance.
Dividing the settlement money was an important issue because so much money, and how it will be spent, was at stake. The state is due more than $3 billion over 25 years from the national settlement of health lawsuits against cigarette companies.
Agriculture programs will get half the money, with the other half split between health-care initiatives and early-childhood initiatives.
The House and Senate passed different versions of House Bill 611, detailing how to spend the money, meaning negotiators had to try to work out a compromise.
On another front, House and Senate negotiators agreed that none of the settlement money will be set aside for a program to buy conservation easements from farmers, which bars development and preserves farmland.
However, the final state budget will include $3.75 million to create a $25 million bond pool from which preservation programs can seek funding. The amendment establishing the fund will give a leg up to the farmland preservation program, called PACE, said the sponsor, Rep. Joe Barrows, D-Versailles.
Fayette County had a particular interest in the decision. The county has set aside $2 million to buy development rights from farmers, and wants matching money from the settlement.
If the money doesn't come through, the county will have to let voters decided in November whether to fund farmland preservation by way of a tax, or else drop the rule against developing tracts of less than 40 acres in rural areas of the county.
Dropping back to the previous 10-acre limit would mean more development in rural Fayette County, said David Switzer of the Kentucky Thoroughbred Association.
The PACE compromise means Fayette County the only place in the state that has set up local rules to buy out development rights will have to move quickly on an application for money and hope for the best.
Lawmakers put the amendment on PACE into the state budget, as opposed to working it out in HB 611.
However, negotiators met again yesterday to work out a final agreement on HB 611, so that rules on the agriculture part of the tobacco settlement will remain in place past the end of the next two-year budget.
Among other things, they agreed that money to supplement a separate $1.5 billion fund that compensates farmers for lost tobacco quota called Phase II will come off the top of the settlement fund before it gets split for the county and state accounts.
The supplement will also be available throughout the Phase II program, though after a $40 million transfer next year there may not be a need for another supplement until the last years of the 12-year program.
Money for some other programs, such as payments on $50 million in bonds to build rural waterlines, and $18 million to help farmers meet environmental rules, will be taken out of the 65 percent of the money designated for the state's account.
Lawmakers also agreed on language setting aside money for environmental cleanup of farms that fail and of tobacco warehouses; on the makeup of the 15-member state board that will control the money; and on guidelines to judge the success of programs funded by the settlement.
The deal also has a provision under which the state board could consider funding research on alternative crops.
That could mean money to research growing industrial hemp, said Barrows, who had unsuccessfully pushed another bill to fund research on whether hemp could be a new source of income for farmers.