Democrats outline blueprint for how to spend $300 million in tobacco money

TRENTON, N.J. (AP) 3/15/99 -- Senate Democratic lawmakers proposed Monday that New Jersey spend its $7.6 billion in tobacco settlement money to provide greater access to health care, expand eligibility for the state's discount prescription program for senior citizens, and pay for biomedical research.

Senate Minority Leader Richard Codey, D-Essex, said New Jersey needs a blueprint for the money it is expected to receive over the next 25 years. Under the settlement, New Jersey is scheduled to receive about $300 million per year through 2026.

The Senate Democratic plan calls for:

  • Setting aside $80 million per year to help offset cuts in federal reimbursement payments to charity care hospitals.

  • Using $80 million annually to expand the state's Pharmaceutical Assistance to the Aged and Disabled program, which helps more than 200,000 elderly and disabled people pay for prescription drugs.

  • Spending $40 million each year for graduate medical education and biomedical research.

  • Spending $25 million annually on community based health care services and programs.

  • Spending $45 million annually to address long-term health care problems, including increased funding to nursing homes.

  • Spending $30 million in anti-smoking initiatives.

"The Whitman administration has yet to come forward with a comprehensive plan to make optimum use of tobacco settlement funds," Codey said. "This blueprint builds on programs that work, saves good programs at risk and identifies how to address health care challenges of the future."

Larry Downs, director of New Jersey Breathes, a coalition of health groups including the New Jersey Medical Society, the American Cancer Society and the American Heart Association, said while the Democrats' proposal endorses laudable programs, appropriating only 10 percent of the settlement dollars towards tobacco-control is "insufficient."

"This settlement is not a windfall for all worthy causes," Downs said. "It's about saving taxpayers millions of dollars in tobacco-related Medicaid costs. The best way to accomplish that goal is to institute programs that stop people from smoking."

Downs recommends dedicating at least 25 percent of the settlement money to tobacco control efforts.

"Only then can we truly make an impact on underage tobacco use and tobacco-related health care costs in New Jersey," Downs said.

Attorney General Peter Verniero announced Monday that in addition to the $7.6 billion in settlement funds given by the tobacco industry, New Jersey will receive an additional $216 million as a bonus award given to negotiating states for their contribution to the ultimate settlement.

The money is being allocated out of a special $8.6 billion fund called the "Strategic Contribution Fund," that was established through the settlement agreement, Verniero said. It will be paid for by the tobacco industry.

It is anticipated that New Jersey will receive 10 annual payments of $21.6 million beginning April 15, 2008. The payment will be allocated each year on April 15 and the last payment will be paid out in the year 2017.