Rowe would use tobacco settlement 'exclusively' for health needs

By The Associated Press Friday, March 12, 1999
Bangor Daily News

AUGUSTA - Weighing in on a $1.4 billion question, House Speaker Steven Rowe outlined a plan Thursday to use Maine's share of the national tobacco settlement "exclusively'' for health-related programs.

The Portland Democrat proposed the creation of a Trust Fund for a Healthy Maine, from which about $60 million annually would be disbursed to five programs.

Rowe said priority areas would include:

  • Smoking cessation and education;
  • Children's early care and education;
  • Children's health insurance;
  • Low-cost prescription drugs for the elderly;
  • Substance abuse prevention and treatment.

Rowe said it would be up to the Legislature to decide each year how the money would be allocated.

A $206 billion deal reached with Big Tobacco last year will provide Maine with $1.4 billion over 25 years.

Unclear is whether the federal government will stake a claim as reimbursement for Medicaid contributions.

Under Medicaid law, states must share proceeds of any lawsuits involving the program, which gets 57 percent of its money from the federal government.

The Clinton administration has suggested that it might agree to let states keep the money if they promise to use it for health and anti-smoking programs.

Gov. Angus King, without offering details, has suggested that the money be split, with some going for health care and some going for direct tax relief.

Rowe cited the Clinton administration suggestion to buttress his proposal to use all of the state's money for health-related purposes.

He also said applying the full amount to health care would provide "tremendous tax relief down the road'' by curbing health-related demand for government services.

Senate Minority Leader Jane Amero, R-Cape Elizabeth, has proposed the establishment of a Maine Tobacco Endowment Fund to serve as a permanent funding source for several current state programs.

Amero suggested initial funding be made available to a home visitation program for families with newborns, the elderly low-cost prescription drug program and the Partnership for a Tobacco Free Maine.

Advocates for expanded access to health care have said the state's settlement share should go toward covering 150,000 uninsured Mainers.

Senate Majority Leader Chellie Pingree, D-North Haven, has proposed expanding state subsidies of prescription drugs for the elderly and disabled.

Smoking rates among Maine youth and young adults are among the highest in the nation, according to state public health officials.

Rowe offers plan for tobacco money

Kennebec Journal/Morning Sentinel Online
Friday, March 12, 1999

By PAUL CARRIER, Blethen Maine Newspapers

AUGUSTA - House Speaker Steven Rowe has added his voice to the growing chorus of politicians proposing competing ideas for spending the windfall from last year's tobacco settlement. Rowe's proposal emphasizes spending on health and insurance programs.

Rowe's entry in the tobacco debate has focused renewed attention on several major plans for the money, and has underscored significant policy differences regarding payouts to the state that may total $1.4 billion through 2024 and millions more every year after that.

Maine was one of 46 states that reached a $195 billion settlement with the tobacco industry last year in connection with smoking-related health costs absorbed by the states.

Still unclear is whether the federal government, which was not part of the settlement, will try to divert some of the money to the federal treasury. That has been proposed in Congress, over the objections of the nation's governors and legislatures.

Even if the federal government keeps its hands off, officials disagree on how large the payments will be and when they will start.

State Treasurer Dale McCormick predicts the state will get its first payment no later than June 30, 2000. One calculation pegs annual payments from 2001 through 2024 at $53 million to $61 million a year, but McCormick said the range may well run from $60 million to $80 million a year for the next quarter century, with additional payments after that.

Flanked by several other Democratic lawmakers, Rowe, a Portland Democrat, said Thursday the state should divide up to $60 million a year among five priorities by creating what he called "a trust fund for a healthy Maine."

They include efforts to fight smoking, care for very young children, health insurance for uninsured poor children, an expanded low-cost prescription program for the elderly and programs to fight drug and alcohol abuse. Payments in excess of $60 million would be saved.

"We should invest in the programs that really invest in the health needs of Maine people," Rowe said during a news conference in his State House office.

"We're paying a very dear price for not attending to these problems now," said Rep. Thomas Kane, D-Saco, a supporter of Rowe's bill and the co-chairman of the Legislature's Health and Human Services Committee.

Rowe's proposal is similar to one advanced by Senate Majority Leader Rochelle Pingree, D-North Haven. Like Rowe, Pingree would spend the money on health care, although her priorities are not identical to Rowe's.

Pingree would use the money to expand the number of elderly Mainers eligible for low-cost prescription drugs, enlarge the list of illnesses covered by that prescription program, insure thousands of poor parents whose children recently acquired health insurance under a new state program and provide insurance for poor but childless Mainers who work but have no insurance.

"It should go to health care," Pingree said of the tobacco settlement, because the states are being compensated for health costs.

Independent Gov. Angus King has yet to say what he wants to do with the money, but his plan is expected to combine spending on health care - as Rowe, Pingree and other lawmakers have proposed - with tax cuts.

Human Services Commissioner Kevin Concannon suggested recently, for example, that the King administration might be willing to use some of the tobacco-settlement money to expand a six-county program that provides nursing visits to the parents of newborn children.

"That's certainly one of the areas we're looking at," said Dennis Bailey, King's spokesman. But Bailey said King also believes that the taxpayers should get some of the money through some kind of tax cut, because their taxes helped pay for the Medicaid expenditures that will be reimbursed by the tobacco settlement.

In a similar vein, assistant House Minority Leader Richard Campbell, R-Holden, has suggested that the money be used for health programs and to cut income taxes.

Senate Minority Leader Jane Amero, R-Cape Elizabeth, has offered yet another proposal that emphasizes investment over other options.

Her plan would place the tobacco-settlement payments in a savings acccount of sorts and use the interest - but not the principal - to providemore nursing visits for families with newborns, help smokers kick the habit and expand low-cost prescription drugs for the elderly.

By Amero's calculations, annual payments of $60 million, if left untouched, would produce a balance of $300 million in five years and earn millions more in interest, allowing the state to invest in health care while building a sizable endowment that would be available to meet future state needs.

"What we always do is spend it all" whenever the state has extra cash, Amero said Thursday. "This allows programs to expand but it also allows the core money to grow."

Other observers note, however, that the settlement money will be such a welcome pot of cash that it is sure to fuel additional spending schemes unrelated to health-care spending, tax cuts or savings accounts.