US States To Spend $8B Of Tobacco Settlement Through 2001
WASHINGTON (AP)--U.S. States plan to spend $8 billion through next year in tobacco settlement money - the first installment of a 25-year cash flow - and nearly half the money is going toward health care services for working poor families, a report shows.
Less than 10% of the money is going for smoking prevention programs, according to a National Conference of State Legislatures report that gives the first comprehensive look at how states are using money from the historic lawsuit settlement.
Instead, states have earmarked money for tax cuts, general funds and other initiatives that have nothing to do with anti-smoking themes, as well as assistance for tobacco farmers, services for children, elderly care, education and other programs.
The report, detailing money appropriated by 44 states for fiscal years 2000 and 2001, showed states have enacted 91 laws governing how to spend their share of a massive 1998 settlement under which tobacco companies will shell out $206 billion to states over 25 years. Four other states settled separately for an additional $40 billion.
The money was to compensate states for the cost of treating smoking-related illnesses of people on Medicaid. But there are no rules on how the money can be spent, so the settlement funds have provided a windfall for states to use on a variety of health and non-health related programs, from rainy-day funds and property tax relief to fixing dilapidated schools and beefing up teacher salaries.
"In the end, each state has acted in a manner that reflects the concerns and desires of their respective citizens," said William Pound, executive director of the conference.
The report comes just days after a Florida jury ordered tobacco companies to pay a $145 billion penalty in a class-action suit filed on behalf of sick Florida smokers. The companies plan to appeal.
Thirty-eight states have appropriated $3.5 billion - 43% of the total amount states will spend through fiscal 2001 - to help low-income people get health care, reflecting widespread concern about the 44 million Americans who lack health benefits.
Many states have earmarked the money for expanding existing health insurance programs for the poor. Washington state has appropriated $153 million of the $168 million it received for a state-funded program for working poor families that don't qualify for Medicaid and can't afford to buy their own insurance.
New Jersey, which received $552 million, will use $100 million to expand Medicaid, a state-federal insurance program for low-income people.
The report also showed that 17 states used $1.3 billion for a variety of services unrelated to health services. Illinois, which received $437 million, used $315 million for property tax relief and an earned income tax credit. The state used just $26.4 million for anti-smoking programs and $8.9 million for health care.
Minnesota, New York and Wisconsin each put over $200 million in their general funds. They allocated $20.2 million, $30 million and $20 million for anti-smoking campaigns, respectively. Minnesota and Wisconsin didn't use any money for health care; New York allocated $338 million for health care.
Tobacco prevention programs represented the third largest area of spending among all states, with $754 million going toward community and school-based programs, anti-smoking media campaigns and other tobacco control initiatives. Prior to this year, states spent just $140 million of their own money for anti-smoking campaigns.