New Jersey: The following two news articles provide more details about New Jersey Governor Christie Whitman's FY'2000 budget request pertaining to the tobacco settlement funds. There is a discrepancy between the two articles in terms of how much money would go for the prescription drug program for the elderly and disabled -- one article says $7 million and the other says $8.7 million -- and we are not currently certain which is current. Both say $10.5 million will go for community-based care for elders. Further, $18.6 million is budgeted for tobacco control programs.

Whitman wants tobacco money to pay for state workers' health insurance

By Nancy Parello, Associated Press, 01/23/99

TRENTON, N.J. (AP) - About a third of New Jersey's first $93 million installment of a tobacco settlement would pay for health insurance for state workers, while 20 percent would fund smoking-related programs, state officials said on Saturday.

Gov. Christie Whitman plans to ask lawmakers to approve spending $36.4 million of the settlement - part of her proposed state budget - to finance routine increases in the cost of health insurance for state employees, state Treasurer James DiEleuterio said.

Usually, the state pays for those labor-related costs out of the general budget fund.

Whitman, who will formally detail her new budget on Monday, wants to use the rest of the money for anti-smoking programs, programs for the elderly, counseling for state prisoners, drug abuse programs for some welfare recipients and a handful of "wellness programs.''

Some anti-smoking advocates are already fuming. ``This is money that was supposed to recover costs of cigarettes and tobacco's affect on health care,'' said Stephen Landfield, an attorney for Action on Smoking and Health, which opposed the settlement forged between cigarette makers and 46 states in December. New Jersey's share of that settlement is $7.6 billion, to be paid over 25 years.

Instead, more of the money is ``being used to help her balance her budget than is being used for smoking cessation programs and health related issues,'' said Landfield. ``This is very contrary to the assumptions we had'' when the settlement was reached.

That settlement, however, did not specify how the dollars should be spent. Instead, it left it up to state officials and the Legislature to decide.

DiEleuterio defended the governor's plan, which still needs legislative approval, saying state workers also suffer from smoking-related illnesses. Additionally, New Jersey taxpayers have been financing smokers' health problems for years, so it's only fair to lower their share of the state's health care costs, he said.

``We've been covering smoking costs out of the general fund,'' he said. ``We should reimburse taxpayers for something they previously covered.''

The second-largest chunk of the $93 million - $18.6 million - would fund a media campaign and other programs designed to prevent children from picking up the habit or help both teens and adults stop smoking. That's 20 percent of the first installment.

The elderly would be the next big beneficiaries of the tobacco deal. Under Whitman's plan, $10.5 million would pay for more programs aimed at keeping the elderly at home and out of expensive nursing homes. The governor also wants to use tobacco money to fund a $7 million cost increase in running a state prescription program for low-income elderly and disabled people.

State prisons would get $9.7 million to pay for ``mental health services,'' such as counseling, for inmates.

Whitman also earmarked $4 million for ``wellness programs,'' including a $2.7 million early cancer detection and screening program for minorities.

It's uncertain whether lawmakers will go along with the plan. Some have suggested using the money to pay for school construction, while others have said it should be given back to taxpayers. Assembly Democratic Budget officer Joseph Charles Jr., D-Hudson, said a portion should go into a fund to protect HMO programs.

New Jersey's settlement is part of a $206 billion deal reached between cigarette makers and 46 states to settle lawsuits over health costs for sick smokers. The states must relinquish past, present and future claims for money damages, but the deal does not immunize the tobacco industry from individual smokers' lawsuits.

After the first year, New Jersey is expected to receive between $250 and $300 million, according to the terms of the settlement.

Copyright 1999 Boston Globe Electronic Publishing, Inc.

Use of tobacco suit funds criticized

January 24, 1999 By OVETTA WIGGINS The Bergen Record --Trenton Bureau

Governor Whitman's promise to spend "every penny" of New Jersey's share of the historic tobacco settlement on public health and anti-smoking programs actually includes using more than one-third of the first payment for state employees' health benefits.

Under the fiscal year 2000 budget plan Whitman will formally unveil Monday, the state has allocated $36.4 million of the multimillion-dollar payment from cigarette makers to defray all of the state's increased costs for its employees' health insurance.

Other plans for the $93 million first payment will include enhancing anti-smoking programs, developing mental services for prisoners, and offering alternatives to nursing home placements for the elderly.

"The key point for us was that the nexus be health care," said John Farmer, Whitman's chief counsel, explaining how the administration decided to spend the money. "In that universe of people [state employees], a good number will be tobacco users. It is not disingenuous."

But Stephen Landfield, an attorney for Action on Smoking and Health, an anti-smoking group, criticized the move as a diversion.

"In a time of unprecedented economic prosperity, she's going to use this as more money to play with," Landfield said. "This money is supposed to specifically be earmarked for things like education about the dangers of tobacco. To use it for any other purpose seems to do violence to what the settlement was about."

New Jersey and 45 other states reached a mammoth settlement with cigarette makers last year to settle lawsuits over health costs for sick smokers. Cigarette makers will pay $206 billion to the 46 states over 25 years. New Jersey's share is $7.6 billion.

Brian Baxter, deputy chief of policy and planning, said the state decided not to use the money on health-care costs for the poor because, he said, it would have been viewed unfavorably by the federal government, which has to reimburse states for Medicaid claims. Washington had threatened to lay claim to some of the states' settlement money, but President Clinton said last week that the federal government would sue cigarette makers on its own.

The state didn't use the windfall on KidCare, the subsidy program for uninsured children, because New Jersey -- like other states -- hasn't spent all the money it has allotted for the program in previous years because of low enrollment.

But the state is spending more than the first tobacco settlement check, $95 million, for increases in Medicaid spending next year.

Assemblyman Joseph Charles of Jersey City, the ranking Democrat on the Appropriations Committee, said he would like more thought given on how to spend the tobacco settlement.

"I think consideration should be given to the HMO problems we have now and consider using some of that money to help those who might be hurt by health-care problems from the HMO failures," he said. "One of the things that's sure is we need to list, or at least identify, all the areas that are health related that need funding and then decide which of those are most pressing."

Twenty percent of the settlement, or $18.6 million, will be used on anti-smoking initiatives ranging from an ad campaign to school- and community-based prevention and tobacco control programs.

"I think it's unrealistic to expect that a large portion or majority [of the settlement money] would go toward the comprehensive smoking control package," said Everett J. Merrill, director of communications for the American Cancer Society in New Jersey. "Sure we'd like to see 100 percent given to effectively fight the tobacco industry in the state. But is that pragmatic? Is that realistic? Probably not."

The state also will use $8.7 million from the settlement for its drug subsidy program for the elderly and disabled. An additional $4.5 million will be used to provide medical services and drug treatment for welfare recipients and $10.5 million will be used to help elderly residents who want to remain in the community instead of going into a nursing home.

The money from the settlement is open-ended. Other states, Farmer noted, are planning to spend the Medicaid recovery money on projects that have nothing to do with health, such as schools and highway construction.