This section of the web site of the National Center for Tobacco-Free Older Persons of The Center for Social Gerontology (click on our Home Page below for more information about TCSG) contains regularly updated information on what is happening in states regarding the almost $250 billion the tobacco industry must pay to the states over the next 25 years as a result of the settlements they have signed to resolve Medicaid lawsuits filed by the states. The payment schedule is also on our web site. The information included focuses mostly on how the tobacco settlement funds are being directed toward programs for two major purposes: aging programs and tobacco control programs. Immediately below, we present highlights, some with links to news articles, which include a limited number of major stories/events; this is followed by state-by-state updates. We encourage users to email or fax (734 665-2071) information to us to be added to this site, either to update or correct information we have posted.

For the latest information and news on SMOKE-FREE ENVIRONMENTS ISSUES, see our new Smoke-Free Environments Law Project site at www.tcsg.org/sfelp/home.htm.

For daily news clipping updates on tobacco control issues, including the settlement funds, see Gene Borio's web site: www.tobacco.org.

Tobacco and Aging List-Serve:TCSG has created an interactive, list-serve on tobacco and older persons. Issues covered include: secondhand smoke, smoking cessation, tobacco settlement funds, health effects, legal and public policy matters, and others. To sign up, go to Smokescreen.org and click on Aging & Tobacco Discussion List.

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STATES WITH NEWS POSTED BELOW: 4/2: Louisiana, Mississippi, Ohio, Virginia; 2/24: Louisiana, Virginia; 2/12: New Hampshire, West Virginia; 1/19: Colorado, Ohio; 12/30: Alabama, North Carolina, North Dakota; 11/18: Pennsylvania; 10/13: New York (Chautauqua County); 9/5: New Hampshire; 9/4: California (Fairfield County), North Carolina, Ohio; 7/18: Kentucky, Massachusetts, Pennsylvania, Virginia;

See Highlights for reports on state's uses of settlement funds; See Highlights for Federal Lawsuit; visit TCSG's new Smoke-Free Environments Law Project web site here ; and see CDC reports on tobacco & minorities at TCSG's site under Articles/Materials;also, see to join the National Coalition for Tobacco-Free Older Persons; See Highlights for NCTFOP Press Release on Use of Settlement Funds for Aging & Tobacco Control; See Highlights for announcement of TCSG's new National Center for Tobacco-Free Older Persons; See Highlights RE smoking costs to Medicare.

STATES IN WHICH SETTLEMENT FUNDS HAVE BEEN ALLOCATED IN 2001 FOR AGING or TOBACCO CONTROL PROGRAMS: (SEE BELOW FOR SPECIFICS OF WHAT EACH STATE HAS DONE):

AGING: Alabama - $60.3 million for the Seniors' Safety Net Trust Fund; Arkansas - $5 million of settlement funds, matched with $13 million of federal Medicaid funds, for a total of $18 million for a new prescription drug program for elders; California: City of San Jose - $4.5 million for Senior Services; also Sacramento County - $65,000 for legal services for elders; Delaware - $6,635,400 of which $5,150,400 is for the prescription drug program, and $1,485,000 for SSI and Medicaid for elders and the disabled; Florida - $30.3 for a prescription drug program, $26.7 million for home and community based long term care and $4 million for Medicaid long-term care; Georgia - an indeterminate, but substantial millions of dollars for in-home and related services; Michigan - $45 million for a senior prescription drug program; Missouri - for FY'02, an estimated $50 to $100 million of settlement funds for a prescription drug program for elders, and possibly some portion of $7.2 million to expand Medicaid services for elders and the disabled, plus for FY'01, $127 million for the prescription drug assistance program for elders;

New Jersey - $50 million for the Senior Gold Pharmaceutical Assistance Program, $20 million for ElderCare Intiatives, and $12 million for nursing homes spousal income; Pennsylvania - $73 million, with $45 million for in-home services & $28 million for prescription drugs (in this and future years, 13% of total settlement funds are to go for in-home services and 8% for prescription drugs for elders).

TOBACCO CONTROL:Arkansas - $18 million annually; California: City of San Jose - $2.8 million; Delaware - $5,450,000 for FY2002; Florida - $39.1 million for FY2002; Georgia - over $5 million; Idaho - $50 million for FY2002; Illinois - $50 million; Indiana - $35 million, plus $30 million from last year, with the total $65 million to be spent over the next 2 fiscal years; Kentucky - $5 million for FY2002 and $5.5 million for FY2003; Missouri - $22.1 million; New Jersey - $32 million for FY2002; New Mexico - $5 million; Pennsylvania - $42 million (in this and future years, 12% of total settlement funds are to go for this purpose); Rhode Island - $4 million for FY2002; South Dakota - maybe $800,000 from interest on first year settlement funds (this is simply a part of the $4.2 million in general revenue funds appropriated for FY2001/02).

STATES IN WHICH SETTLEMENT FUNDS HAVE BEEN ALLOCATED IN 2000 FOR AGING or TOBACCO CONTROL PROGRAMS: (SEE BELOW FOR SPECIFICS OF WHAT EACH STATE HAS DONE):

AGING: California: City of San Jose - $2.5 million for Senior Services; Colorado - 1% of settlement funds, or about $1 million annually, for health needs of aging veterans; Delaware - $7.5 million for prescription drugs for elders and $1.5 million for in-home services for elders under the Medicaid waiver program, which should be matched by about $2 million of federal funds, for FY'01; Georgia - $8 million in settlement funds, plus about $5.9 million in federal matching funds, plus over $3 million in new state funds due to advocacy for the settlement funds for FY'01; Illinois - $35 million in FY'01 for prescription drug assistance for elders, plus $1.8 million for senior health services; Indiana - $20 million in FY'01 for prescription drugs for elders; Iowa - about half of $1.5 million in FY'01 going to counties for home care for elders; Maine - $10 million for FY'01 for prescription drugs for elders; Michigan - over $61 million for FY'01, plus about half of the $6 million going to Community Foundations for programs for children and elders; Nebraska - at least $130,000 for a senior nursing clinic; Nevada - $450,000 for FY'01 and 02, plus 30% of the overall settlement funds to go for prescription drugs and in-home care for elders; New Jersey - $61 million in FY'01 for prescription drugs and in-home care for elders; New York - for the EPIC prescription drug program for elders -- $107 million in calendar year 2000, plus a $55.4 million expansion in EPIC starting Oct. 1, 2000, plus $164 million in 2001, plus $189 million in 2002, and $324 million in 2003; Ohio - $12 million over next 12 years for prescription drugs for elders, with about $1 million for FY'01; Oklahoma - $36.2 million in FY'01 largely for health care services, including nursing home care, for elders; South Carolina - $20 million for prescription drug assistance for elders, and possibly millions more for senior services for FY'01.

TOBACCO CONTROL: Alaska - $1.4 million for FY'01; California: San Francisco - $1 million; California: City of San Jose - $2.5 million; Colorado - 15% annually, or about $15 million in FY'01, of the total settlement funds; Delaware - $3 million for FY'01; Georgia - $15.8 million for FY'01; Illinois - $29.5 million in FY'01; Indiana - $35 million for FY'01; Kansas - $500,00 for next fiscal year; Iowa - $9.3 million for FY'01; Kentucky - about $5.5 million for next two years; Maine - $18.3 million, plus $3.5 million in matching federal Medicaid funds, for a total of $21.8 million; Maryland - $30 million annually for the next ten years; Massachusetts - $12.1 million for FY'01; Nebraska - $7 million annually for next 3 years; Nevada - $600,000 for FY'01; New Hampshire - $3 million for FY'01; New Jersey - $30 million for FY'01; New Mexico - $2.225 million for FY'01; New York state - $30 million for FY'00, and $40 million in each of following three years; New York: Dutchess County - $500,000 for FY'01; New York: Livingston County - $45,000 for FY'01; New York: Monroe County - $500,000 for FY'01; New York: Suffolk County - $1.5 million for FY'01; Ohio - about $1.25 billion over next 12 years, including about $30 million for FY'01; Oklahoma - $2 million to be matched with about $4.5 million in federal and other funds; South Carolina - $1.75 million; South Dakota - $800,000 for FY'01; Texas - about $9 million for FY'01; Utah - $4 million in FY'01 and possibly another $2 million when lawsuits over legal fees are resolved; Vermont - $6.65 million for FY'01; Virginia - $11.8 million from last year's alloction of 10% of the overall settlement funds; Washington - $15.5 million for FY'01; West Virginia - $2 million.

STATES IN WHICH SETTLEMENT FUNDS WERE ALLOCATED IN 1999 FOR AGING or TOBACCO CONTROL PROGRAMS: (SEE BELOW FOR SPECIFICS OF WHAT EACH STATE HAS DONE):

AGING: Alabama - $2 million in FY'2000 for trust fund for elderly services; Delaware - an estimated $2.7 million in FY'2000 and $5.1 million in FY'2001 for a prescription drug program for low-income elders; Florida - $1.7 billion Fund for elders & kids with $17.3 million for elders in FY'2000; Maine - $5 million for use in FY'2001; Massachusetts - $42 million for FY'2000; Michigan - $53 million in FY'2000, plus about half the $6 million going to Community Foundations for programs for children and elders; Nebraska - $0.5 million; Nevada - 30% of settlement payments annually equals $360 million over 25 years; New Jersey - $19.2 million in FY'2000; Rhode Island - $3.4 million in FY'2000; Vermont - $325,000 in FY'2000.

TOBACCO CONTROL: Alaska - $1.4 million for FY'2000; Florida - $45 million in FY'2000; Hawaii - 25% of settlement total, or about $3.6 million in FY'2000 and about $10-12 million in future years; Maine - $3.5 million in FY'2001; Maryland - $21 million annually; Massachusetts - 1/4 of 30% of funds annually or about $22.8 million in FY'2000; Minnesota - $489 million into endowments for tobacco prevention programs, with $17.7 million for FY'2000; Mississippi - a pilot program for 1999 & 2000 was funded with $62 million ; Montana - $7 million for biennium of FY'2000-01; Nevada - 10% of settlement funds annually or $120 million over 25 years; New Hampshire - $3 million per year; New Jersey - $18.6 million in FY'2000; New York state - $37 million in FY'2000; New York City - $13 million for FY'2000; North Dakota - some portion of 10% of the funds set aside for health programs; Rhode Island - $1 million for FY'2000; Texas - $200 million into an endowment, with interest of about $10 million annually for tobacco prevention; Vermont - reserved $19.2 million for FY'2000; Virginia - 10% of settlement funds for tobacco control and other health programs, with $11.8 million to go for tobacco prevention in the coming year; Washington - $100 million for tobacco control, but not clear how much for FY'2000 or future years out of the $100 million; Wisconsin - $23.5 million for the biennium, with $2.3 million for FY'2000 and $21.2 million for FY'01; Wyoming - all settlement funds in a trust, with some to be allocated in 2000 for tobacco prevention.

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HIGHLIGHTS

For 2000 highlights, click here.

For 1999 highlights, click here.

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STATE-BY-STATE UPDATES

How to read the updates: Each state update begins with the total projected funds over 25 years; 1st year payment; and 2nd year payment. Both the 1st and 2nd year payments are expected to be made to the states by July, 2000, if not sooner; therefore, both payments are expected to be made within many states' FY'2000 budget period. The 1st year payments may be received by spring of 1999. However, payments to 46 states and the territories are currently being held until final court decrees have been entered in enough of these states to amount to 80% of the Medicaid populations of the 46 states which entered into the overall $206 billion settlement. The states of Mississippi, Florida, Texas and Minnesota each entered into separate settlements, and these 4 states have begun to receive their payments.

Each state's update briefly lists what, if anything, TCSG has learned about what is going on in the state regarding proposals for how the tobacco settlement funds should be spent, including proposals made by Governors, Attorneys General, key elected officials, aging groups, tobacco control groups and other key groups or coalitions. ITEMS IN CAPITAL LETTERS WILL HIGHLIGHT AGING OR TOBACCO CONTROL PROGRAMS; IF NO ITEMS ARE CAPITALIZED, TCSG IS UNAWARE OF PLANS FOR USE OF SETTLEMENT FUNDS FOR AGING OR TOBACCO CONTROL PROGRAMS. We will update this information on close to a daily basis, albeit not for every state, and will delete previous notices when they appear to be out of date. For additional information, you may contact us by e-mail; please send us information, including news articles so we can make this listing as current and accurate as possible.

To jump to a particular state, click on the first letter of its name:
A | C | D | F | G | H | I | K | L | M | N | O | P | R | S | T | U | V | W

ALABAMA

Total: $3.17 billion; 1st paymt $38.8 million; 2nd paymt $103.6 million.

• 12/30: A state bond commission voted Monday to give $12 million to the University of South Alabama to help build a cancer research institute. USA has dedicated its share of the state's tobacco settlement to the project, setting aside the $3.9 million it has received so far. The university is supposed to get $17.2 million eventually. The USA Foundation has also pledged more than $1 million to the cancer institute. The university is using the tobacco and foundation money to pay for salaries and underwrite start-up costs. [Mobile Register, Dec. 30, 2003]

• 8/21: Tobacco is a tiny speck in Alabama's agricultural landscape at less than 300 total acres. Yet Alabama politicians steered $500,000 to the tobacco farmers from Alabama's $3 billion share of the national tobacco settlement. Most of the Alabama farmers, like Everett, got small checks. The owner of a large farm, Wayne Kervin of Georgiana, got $231,853, based on pounds of tobacco grown. To Everett, who farms six acres for his retirement, and Kervin, who farms more than 100, the move makes perfect sense. They've seen their crops cut roughly in half in the past five years by federal quota cuts, the shift to overseas growers and smoking declines. [Birmingham News, August 18, 2002]

• 10/23: Alabama has received $234.8 million so far from the tobacco settlement but only $681,113, about the cost of two cigarettes per person in the state, has been spent on anti-smoking campaigns. State Health Officer Dr. Don Williamson and anti-smoking groups said last week that's clearly not enough. "It's a drop in the bucket,'' said Janet Windle, chairwoman of the Coalition for a Tobacco-Free Alabama. "For all the millions of dollars, this is all they allocated on this issue.'' Dr. Williamson's agency got $335,000 last year out of the Legislature from the national tobacco settlement worked out by states ostensibly to recover the cost of smoking-related illnesses by Medicaid recipients. His agency is using $235,000 of the total to buy and distribute education programs for teachers. Of the $335,000, $100,000 was allocated to the Alabama Alcoholic Beverage Control Board to hire agents and buy equipment to enforce the age ban on buying cigarettes. But the ABC Board got only $40,000 and is owed $60,000. [Florence Times Daily, Oct. 22, 2001]

• On April 17th, the House approved a bill giving $97 million more to an economic development fund controlled by Governor Don Siegelman. This money would be used for industrial incentives. If approved by the Senate, the money would finish paying for incentives promised to lure a new Honda plant, as well as pledges made to Mercedes, Toyota, and other companies locating in Alabama. House members amended the legislation to be subject to all sections of the state's competitive bid law. The bonds from this will be repaid from the tobacco settlement funds and would transfer the risk to the bondholders. [Mobile Register, April 18, 2001]

• On April 16th, Alabama received another $66 million from the tobacco settlement, bringing the total to $229 million thus far. Several legislators have criticized Governor Siegelman for being slow in releasing the settlement funds for programs once the state receives the payments. For example, the Governor did not release about $60 million for the "Seniors Safety Net" programs for many months after it could have been released; this money was for PRESCRIPTION DRUGS, IN-HOME CARE, and NURSING HOME CARE. The governor's staff said the money would be released more quickly this time. [The Associated Press, April 17, 2001]

• On March 29th, Governor Don Siegelman announced that he is adding $60,272,701 of settlement funds to the Seniors' Safety Net Trust Fund for services for the ELDERLY. The fund was created to provide earnings which can go for services for seniors who are not covered by Medicaid. The earnings from the Trust Fund are available for NURSING HOME CARE, HOSPITALIZATION AND PRESCRIPTION DRUGS FOR SENIORS. Exactly how much this will put into the service system for seniors this year is unclear, but the earnings will be drawn on both this year and in future years. [Associated Press, March 30, 2001]

• On September 19th, the Children First oversight Committee of the legislature held its first meeting and announced they will meet again on November 1st. The Committee said it wants to hear from the Children's Affairs Commissioner on how the state is spending the $50 million in settlement funds it has already received for services to children and youth. As of August 22nd, various state agencies have already spent about $11.4 million of these funds and the Committee wants to be sure how it has been spent. [Birmingham News, September 20, 2000]

• On July 28th, a deal was announced by the University of South Alabama president under which the university will receive $20 million from the state for dropping their 1997 lawsuit to obtain tobacco settlement funds from either the state or the tobacco companies (see story below). This lawsuit has been weaving its way through state and federal courts since it was filed, with the university claiming that it had provided substantial care for persons with diseases due to tobacco and, therefore, had a right to sue the tobacco industry for reimbursement or to get some of the settlement funds. In December, 1999, the university very quietly dropped the lawsuit. On July 28th, the university president announced that the governor had agreed to the university getting $20 million over the next decade for dropping the suit. Attorney General Pryor, who had heatedly fought the lawsuit, agreed to the arrangement. It is not clear if the $20 million will come directly from the settlement funds or from other state revenues. [Mobile Register, July 29, 2000]

• Governor Don Siegleman (D) announced on Jan. 27th that he would file legislation to create a Medicaid "Rainy Day" Fund, with settlement funds, to support various Medicaid programs through the end of the decade, particularly PRESCRIPTION DRUGS AND LONG-TERM CARE FOR ELDERS. Siegleman's announcement, at a Montgomery Senior Center, did not name a dollar figure, but he said this figure would be forthcoming with his budget address. The governor said he would create a Long Term Care Task Force, which he would chair and which would include the Medicaid commissioner and Aging Commissioner Dr. Melissa Galvin and others, to study the growing needs of ELDERS. He will propose that funds placed in the Medicaid Fund be invested and maintained separately from other state revenues and only used for purposes established by the board overseeing the fund. AGING groups reacted favorably to the governor's speech, particularly since last year he had opposed using settlement funds for aging programs; but, they await the dollar figures he has in mind. [Governor's press release & TCSG sources, Jan. 27, 2000]

• On June 9th, the Governor signed legislation which will provide $2 million annually, or $50 million over 25 years, for SENIOR CITIZENS PROGRAMS. Elder rights groups in Alabama also expect to seek additional funds in future years, including, in all likelihood, from the settlement funds.[AP, June 9, 1999) See Highlights for action by the legislature on June 1st which sent a bill to the Governor which will allocate $2 million in settlement funds in FY'2000 to a TRUST FUND FOR ELDER SERVICES, while providing up to $40 million of the funds to the Medicaid program which was threatened with severe cuts, and $60 million for the Children First program (see below for more on this program), as well as $7 million for economic development , which had been a key priority of the Governor. The legislature and Governor sought to use none of the funds for TOBACCO PREVENTION/CESSATION. [ AP June 9, 1999 Mobile Register, June 2, 1999].

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ALASKA

Total: $668.9 million; 1st paymt $8.2 million; 2nd paymt $21.9 million.

• 5/13: State legislators are refusing to spend as much as they promised on a major state campaign against tobacco use, say advocates with the American Cancer Society. The anti-tobacco budget shaping up in Juneau falls about $1 million short of what lawmakers just a year ago said they'd spend from the millions pouring into Alaska from a tobacco lawsuit settlement. The Legislature pledged 20 percent of the settlement for programs like television advertisements against smoking but is granting about 15 percent, activists said. They are fuming over what they call a betrayal. "For them to turn around before the ink is even dry on the bill and to take it and use it for purposes other than in the legislation they approved last year is scandalous," said Eric Myers, a longtime activist against tobacco and a local board member of the American Cancer Society. The 20 percent would amount to about $5 million of the $25 million Alaska expects to get this budget year from its 1998 legal settlement with the tobacco companies. A joint House-Senate committee working on the budget split 4-2 along party lines in approving $4 million. The bulk of the tobacco money has been pledged to construction projects. [Anchorage Daily News, May 13, 2002]

• 2/12: The disproportionately high use of tobacco among youth and Native Alaskans is a growing concern for health organizations around the state. In November, Gov. Tony Knowles proposed $7,500,000 be set aside for anti-tobacco youth programs. This past week the South Central Foundation and the Alaska Native Health Board sponsored the Tobacco Prevention Regional Conference. The anti-tobacco advocates are gearing up for another round of lobbying in Juneau. They intend to make sure 20 percent of the tobacco settlement monies Alaska receives are appropriated for anti-tobacco programs and services. [KTUU-Ch. 2, Feb. 9, 2002]

• Prior to May 11th, Legislators approved $110 million in bonds to be repaid with income from a tobacco litigation settlement. The bonds will pay for three new schools in rural Alaska and provide planning money for a fourth. It will also pay for 28 major school maintenance projects, about $20 million in university projects and about $14 million of port and harbor work. That bond program, combined with one approved last year, will tie up 80 percent of the money the state receives from the tobacco settlement, perhaps for the next 15-18 years. Legislators agreed to divert the remaining 20 percent ($4.5 million next year and about $5 million for the next several years) to an account for ANTI-SMOKING AND SMOKING CESSATION efforts. [Associated Press, May 10, 2001]

• On May 7th, the Senate voted 14-5 to make annual deposits of 20 percent of the tobacco settlements into a fund dedicated to SMOKING CESSATION AND EDUCATION. The House had approved similar language, but the Senate Health, Education, and Social Services Committee changed the bill during committee deliberations. Senator Alan Austerman (R-Kodiak) offered the amendment to change it back and was quickly joined by a half dozen co-sponsors. The smoking cessation fund currently has $1.5 million. If the bill becomes law, 40 percent of he tobacco money would be used for projects approved last year, 40 percent for schools, University of Alaska projects and ports and harbors outlined in the bill, and 20 percent for smoking cessation efforts. [Associated Press, May 8, 2001]

• On October 26th, the Alaska Housing Finance Corporation (AHFC) completed the sale of $116 million worth of construction bonds backed by the tobacco settlement funds. This sale was completed a day after a state Superior Court judge approved the plan to sell the bonds when he dismissed a legal challenge to the sale. The money raised by the sale of the bonds will go for port and school repair and construction. Eric Myers who challenged the sale of the bonds has said he will appeal to the state Supreme Court; if he were to prevail, the sale of the bonds would need to be rescinded, one would think. AHFC does not expect to lose the appeal, officials said. [Reuters, October 26, 2000]

• On September 15th, the state of Alaska Housing Finance Corporation announced that its Board of Directors had approved creation of Northern Tobacco Securitization Corporation (NTSC) as the nonprofit public corporation which will be used to issue bonds backed by the tobacco settlement funds on behalf of the state. In the past legislative session, HB 281 had been enacted, at the request of Governor Knowles, to enable the state to use 40% of the settlement money the state expects to receive to issue bonds. The money raised by the sale of the bonds would be used to finance the construction of about $93 million worth of school construction projects. The money could also be used for university construction projects and facilities for ports and harbors. The creation of the NTSC is a way of protecting the state from having any obligation to holders of bonds; i.e., the risk is to be held solely by the bondholders. It is not clear when the bonds will be offered for sale. [PRNewswire release from Alaska Housing Finance Corporation, September 15, 2000]

• When the legislature finished work on the fiscal year 2001 budget, they had appropriated $1.4 million of settlement funds for TOBACCO PREVENTION & CESSATION PROGRAMS. This is the same amount that was allocated in fiscal year 2000. The governor signed the FY'01 appropriation, and the funds are now being disbursed. [TCSG sources in Alaska, July 13, 2000]

• Now that the FY'2000 budget has been approved, and $1.4 million has been allocated for TOBACCO PREVENTION AND CESSATION PROGRAMS (see HB 50, section 38 on the Alaska legislature's web site), planning is going forward by the key players -- Alaska Tobacco Control Coalition, American Lung Association (ALA) and the Alaska Department of Health & Social Services (DHSS) for how to utilize the funds. The $1.4 million was allocated to the DHSS to administer, but is to be put out as a grant to the ALA on behalf of the Alaska Tobacco Control Coalition. [TCSG sources in Alaska, June 15, 1999]

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ARIZONA

Total: $2.9 billion; 1st paymt $35.4 million; 2nd paymt $94.5 million.

• 7/23: Arizona is "one of the most disappointing states" in the nation because the state's leaders have slashed funding for its highly successful tobacco prevention program, according to a national report issued today by the American Lung Association, American Cancer Society, American Heart Association and Campaign for Tobacco-Free Kids. Arizona voters will have the opportunity to increase funding for tobacco prevention and protect it in the future by supporting an initiative on the November ballot to increase the state cigarette tax by 60 cents a pack, with some of the revenue dedicated to tobacco prevention. According to the new report, Arizona has fallen from second to eleventh in the nation in its funding of tobacco prevention because Gov. Jane Dee Hull and the Legislature have cut prevention funding in half, from $36.6 million to $18.3 million. Arizona currently spends 65.7 percent of the $28 million minimum amount that the U.S. Centers for Disease Control and Prevention (CDC) has recommended. [U.S. Newswire, July 22, 2002]

• 6/12: The state collected nearly $160 million in tobacco taxes in the past year. Here's where the cuts could come: Of the $25 million that went toward tobacco-related health education programs, about $5 million a year for five years will go toward research at the Arizona Bioscience and Biomedical Institutes. Of $5.5 million earmarked for health-research, about $500,000 a year for a decade will go to biotech research. The state will dedicate more than $90 million toward the planned biotechnology research institutes whether or not it lands the prestigious International Genomics Consortium, Gov. Jane Hull's office said Tuesday. About one-third of that will come from tobacco taxes, making administrators fret over cuts to health-related research and programs. [Arizona Daily Star, June 12, 2002]

• 5/9: Governor Jane Hull on Wednesday signed a bill to provide $500,000 annually for the next 10 years to help the state attract an international biotechnology project. Hull called the financial commitment she sought "an important step in the historic process of making Arizona an international center for biotechnology." Hull requested the state funding from tobacco-tax revenue as part of an incentives package being compiled from various sources to lure the headquarters of the International Genomics Consortium. Hull is also asking lawmakers to budget an additional $5 million a year for five years from tobacco-tax revenue. [Associated Press, March 8, 2002]

• 3/22: Gov. Jane Hull thinks she's found a way to provide free health care to more Arizonans - and do it in a way that actually saves the state money. The plan would expand the state's 4-year-old KidsCare program, said Tom Betlach, the governor's chief budget analyst. When KidsCare was adopted, the eligibility level for the Arizona Health Care Cost Containment System, funded with federal and state dollars, was about $5,300 a year for a family of four. Since that time, however, voters approved Proposition 204, which uses proceeds from a settlement with the tobacco companies to boost the cutoff to the federal poverty level, about $16,000 a year for that family. [Arizona Daily Star, March 22, 2002]

• 3/12: A House panel decided Monday to ask voters to limit how much the state must spend to provide free health care for the working poor. The measure was approved on a 10-6 vote by the House Appropriations Committee. It would limit spending for expansion of the Arizona Health Care Cost Containment System to the funds available from the state's settlement of its lawsuit with the tobacco industry, plus the cash the state already was spending for the program. The only increases would be for inflation and population growth. [Arizona Daily Star, March 12, 2002]

• 2/20: Saying voters were misled, Senate President Randall Gnant seeks to put part of Proposition 204 that was approved less than two years ago back on the ballot. Gnant's plan, if approved in November, would retain the requirement that Arizona use proceeds from a nationwide tobacco settlement to provide free health care for the working poor. But Gnant wants voters to allow lawmakers to stop enrolling people if the tobacco money runs out, even if they are financially eligible. He said voters never knew the financial obligations would cut into the state's operating budget. Initiative proponents said the cost could be met by the $100 million a year the state is expected to receive from the tobacco settlement. But there was a fail-safe: If those funds weren't enough, the state general fund would make up the difference. [Arizona Daily Star, Feb. 19, 2002]

• 12/27: Governor Jane Hull rejected lawmakers' attempt to use federal welfare money, about $2.5 million, for the Healthy Families program and pregnancy prevention. Hull said that money should be used for welfare recipients, not to expand a program that also receives money from the state's portion of the nationwide tobacco settlement. Carol Kamin of the Children's Action Alliance said the tobacco money will dry up within two years, ending one of the state's most recognized and successful child abuse prevention programs. [The Arizona Republic, Dec. 21, 2001]

• 12/21: State lawmakers approved a $49.2 million plan to improve instruction for students learning the English language Wednesday, paving the way for a new court fight. On the last day, lawmakers also voted to fund dialysis and chemotherapy for 159 people who are not U.S. citizens. The dialysis plan uses $2.8 million from tobacco-education funds to pay for the care for those who are poor but do not qualify for state-paid health care because of their immigration status. That includes those here legally for less than five years and those who are illegal entrants. [Arizona Daily Star, Dec. 20, 2001]

• 12/19: To balance the state's budget, Governor Jane Dee Hull made a proposal that would essentially end the state's successful tobacco prevention program, which is currently funded at $34.5 million a year through a cigarette excise tax approved by voters in 1994. In a big victory for tobacco prevention, the Arizona Legislature rejected this proposal. The Legislature did vote to take $15 million from the program's reserve account, but did not reduce the operating funds. [Tobacco Free Kids, Dec. 19, 2001]

• 11/20: R.J. Reynolds Tobacco Co. violated terms of a multi-billion dollar settlement by advertising year-round at two Arizona auto race tracks, a judge ruled Friday. Judge Colleen McNally of Maricopa County Superior Court ruled that Reynolds violated advertising limits imposed by the settlement between 46 states and major tobacco companies, including Reynolds. The ruling came in a lawsuit filed March 19 by the Arizona attorney general's office. Tom Prose, chief assistant attorney general, said the ruling will require Reynolds to take down its outdoor advertisements at Arizona tracks and that it would likely be followed in other states. A March lawsuit filed by the Arizona attorney general's office said Reynolds left outdoor advertisements up year-round at Phoenix International Raceway and Firebird International Raceway in Chandler. Phoenix International is the site of NASCAR Winston Cup stock car racing in October and Firebird is the site of NHRA Winston Drag Racing Series competition in February. Those events last just a few days each year and the settlement required that ads be placed no more than 90 days before the first day and removed within 10 days after the last day's event, the state's lawsuit said. Reynolds argued that it could leave the ads up year-round because it actually was advertising for each racing series' entire season. The Winston Cub series begins in Daytona, Fla., in February and ends in Atlanta in November. [Raleigh News & Observer, Nov. 16, 2001]

• With 99.9% of the ballots counted, on November 7th Arizona voters approved both ballot initiatives which would allocate the settlement funds. Proposition 204, called the Healthy Arizona 2 proposition would allocate the settlement funds totally for the provision of health insurance coverage for about 100,000 working poor persons; it received 63% yes votes, totaling 791,784 votes. Proposition 200, called the Healthy Children, Healthy Families proposition, would have used some of the settlement funds for health insurance for about 40,000 uninsured persons and the rest of the settlement funds for a variety of other health programs, including for AGING; it received 58% yes votes, totaling 733,831 votes. Since the proposition with the most votes, which also got at least 50% of the vote total (which both did), wins, it would appear that Proposition 204 will be the winner. Both ballot measures had been put before the voters because the legislature could not decide what to do with the funds. Now it will remain to be seen if the ballot measures will be implemented as the voters directed. [Arizona Republic, November 8, 2000]

• Governor Jane Hull (R), in her Jan. 10th State of the State address set forth her proposals for using the settlement funds. She again stated that her priorities are to use the funds for health-related projects/programs, as follows: building a new state hospital is her top priority; using the remaining funds from the up-front payments to enhance community health delivery infrastructures, including health facilities, mobile clinics and telemedicine; using the annual payments to fund a health trust to address issues related to children, behavioral health, the uninsured, the ELDERLY, and disease prevention and research. She said she agreed with Senate president Burns that a trust fund is appropriate for funding these health needs, but she wants that to be done with future payments, not the initial ones. She also wants one third of the initial payments to go for behavioral health needs. Her next priority is children's health programs; this is followed by rural health needs and then health care coverage for the working poor. Then, the governor said she wants to ENSURE THAT LONG-TERM CARE SERVICES ARE PROVIDED in safe settings by qualified caregivers. She said Rep. Sue Gerard's task force has taken the lead in finding workable solutions to resolve our long-term care needs and she commends her. No mention was made of SMOKING PREVENTION & CESSATION PROGRAMS. [Arizona Republic, Jan. 11, 2000 & Governor's State of the State address, Jan. 10, 2000]

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ARKANSAS

Total: $1.6 billion; 1st paymt $19.9 million; 2nd paymt $53.1 million.

• 4/4: Arkansas lawmakers may have a solution to the state's budget crunch, but their plan has some anti-smoking activists fuming. Some lawmakers want to take money from the tobacco settlements fund to bail out the state, but taking that money away from coalitions aimed at fighting smoking might just destroy those programs. The Tobacco-Free Coalition in northwest Arkansas gets most of its funding though the settlement money. Voters decided how they wanted the tobacco money to be spent, so the coalition was promised $100,000 for the first year. Each year, the coalition reapplies for funding. However, if the Legislature dips into the settlement fund there may not be money for the future of organizations like the Tobacco-Free Coalition. [KHBS/KHOG, April 2, 2003]

• 8/2: The Tobacco Settlement Commission voted Tuesday to recommend that funding be continued for all programs that received tobacco settlement money in the fiscal year that ended June 30. The commission's unanimous vote, taken during a conference call, will go to Gov. Mike Huckabee and the Legislature so that funding decisions can be made during the legislative session that will begin in January. The commission, created in 2001 to oversee the $55 million a year the state expects to receive from the national tobacco settlement, had until Thursday to make funding recommendations and adopt performance indicators for agencies that receive tobacco settlement money. Earlier this month, Dr. Joe Thompson of Little Rock, of the Arkansas Center for Health Improvement, presented a draft report to the commission. He said then that the programs received less than 50 percent of their expected funding because some of the year's receipts went to complete the $100 million trust fund established by the Legislature for future health needs. [Southwest Times Record, July 31, 2002]

• 5/1: The deadline for community groups and organizations to apply for grant money for tobacco prevention and education programs is May 31, according to the Coalition for a Tobacco-Free Arkansas. The coalition has $85,000 available for funding community-based tobacco prevention and education programs. Awards will range from $5,000 to $25,000 depending on the size, needs and activities of the communities applying for the grant. Grant applicants must be public or private Arkansas nonprofits, or organizations that are seeking nonprofit status. The grants are supported from the CHART (Coalition for a Healthy Arkansas Today) plan, which was approved by voters in November 2000. That act set aside funds for tobacco prevention and education to decrease the use of tobacco in Arkansas. [Morning News of NW Arkansas, April 30, 2002]

• 4/17: Arkansas' share of tobacco settlement payments for 2002 will reach $61 million this year with a payment of $43 million this month, it was announced Monday. Arkansas is expected to receive between $50 million and $60 million a year indefinitely as part of a 1998 settlement between 46 states and the nation's major tobacco companies. Attorney General Mark Pryor announced Monday that Price Waterhouse Cooper has directed the participating tobacco manufacturers to make payments to Arkansas and other settling states in accordance with the Master Settlement Agreement. Arkansas received a $16 million payment in January. Pryor's office also learned Monday that Arkansas will get another $964,294 as part of $204 million that had been withheld in January by Brown and Williamson Tobacco Co., according to Michael Teague, spokesman for Pryor. [Southwest Times Record, April 16, 2002]

• 3/25: Governor Mike Huckabee's plan to use tobacco settlement money to salvage a Medicaid program probably will be abandoned, Ray Hanley, the state's Medicaid chief says. Hanley said "it's unlikely" the state will take $2.9 million from the state's tobacco settlement money to preserve the program for the medically needy through the end of the fiscal year -- June 30. He said the state in the meantime must find an alternative source for the $2.9 million. None has been found, but many options are being considered, he said. "We're working on it," Hanley said. Huckabee began to backtrack on the diversion plan late last month after Attorney General Mark Pryor concluded that the transfer of money would be illegal. The medically needy Medicaid program helps about 30,000 Arkansans. The medically needy typically are middle-income people who spend themselves to below the poverty level during a three-month period because of catastrophic medical conditions, such as a heart transplant or injuries from a car wreck. Pryor's nonbinding, written opinion was sought in a question submitted Feb. 8 by state Sen. Jim Argue, D-Little Rock. [Morning News of NW Arkansas, March 23, 2002]

• 3/8: Despite the hard line he took earlier, Gov. Mike Huckabee said Wednesday that he's reconsidering his plan to use $3 million of tobacco settlement money to shore up funding for Medicaid. Attorney General Mark Pryor has said the governor's plan to shift tobacco money to Medicaid would be illegal. On Feb. 14, Huckabee said he wouldn't change his mind on the "mere basis of an attorney general's opinion. "Wednesday, Huckabee said his primary goal is ensuring there's enough money to continue the "medically needy" category of Medicaid, which helps low-income people with large hospital bills. Huckabee didn't say he definitely wouldn't use the tobacco money for the medically needy category. "But he's re-evaluating his position," Argue said. "I think the guy deserves credit to be willing to re-evaluate his position." [Arkansas Democrat-Gazette, March 7, 2002]

• 2/18: Governor Mike Huckabee's plan to transfer $3 million of the state's tobacco settlement to counter budget cuts is illegal, Attorney General Mark Pryor said in an opinion Friday. In a conference call, he described the Huckabee administration's attempt to justify the transfer as "federal government math" and said the administration's lawyers are "playing with definitions." "When the people passed the tobacco plan in Arkansas, they designated how the money will be spent," Pryor said. "We cannot come back now and change [the plan]." Pryor said only the Legislature or the people can change the plan. Huckabee said Thursday that he would go ahead with his plan regardless of Pryor's opinion, which is not binding. Huckabee's plan would shift the money to a Medicaid program known as the "medically needy," which pays hospital bills for people with catastrophic injuries or illnesses. [Arkansas Democrat Gazette, Feb. 16, 2002]

• 2/13: Governor Mike Huckabee wouldn't reveal details of a meeting late Wednesday with key players in the coalition behind the tobacco settlement spending plan, worth about $60 million a year. The subject of the meeting was the initiated act the voters approved in 2000 to distribute the money. More specifically, the participants talked about "maintaining [the act's] integrity," said one lobbyist who attended the meeting, Robert Evans of Arkansas State University in Jonesboro. The meeting came five days after the lead author of the plan, Dr. Joe Thompson of Little Rock, expressed concern that Huckabee had violated the intent of the initiated act by announcing a plan to use $3 million of tobacco money to help the state through budget cuts this year. [Arkansas Democrat-Gazette, Feb. 14, 2002]

• 2/10: Friday that Governor Mike Huckabee's use of the money to solve a budget shortfall wasn't the intent of the initiated act that voters approved in 2000. "This is not the way it was envisioned this money was to be spent," said Thompson, a pediatrician. "The intent of this was to create and expand health insurance for those who do not have it." This week, legislators and legislative staff have questioned the legality of Huckabee's plan to siphon $3 million from tobacco settlement funds and send it to a Medicaid program facing cuts. An administration lawyer also has said that plan falls into a legal gray area. [Arkansas Democrat-Gazette, Feb. 9, 2002]

• 1/18: Governor Mike Huckabee reversed himself Wednesday and said he would use money from the state's $1.6 billion tobacco settlement to save Medicaid services for thousands of Arkansans. Huckabee announced his plan to use $2.9 million of tobacco money earmarked for expanding Medicaid services for adults ages 19-64 to offset planned cuts that would have eliminated the medically needy category on March 1. That category of Medicaid covers about 30,000 people, recipients who are not typically Medicaid eligible but become so temporarily because of catastrophic medical problems that result in high bills. It also includes hundreds of low-income Arkansans with serious illnesses that carry large medication and treatment expenses. "The way we're announcing ... gives us the ability to answer the need without having to have a session, without having to change the CHART formula," Huckabee said. "It totally keeps faith with the program and the voters, and the intentions." [Associated Press, Jan. 17, 2002]

• 1/9: A once hotly contested provision of Arkansas' master tobacco settlement plan became reality Monday evening when the College of Public Health opened its doors for its first class. Students and faculty of the College of Public Health at the University of Arkansas for Medical Sciences gathered for a class picture before heading straight into their first seminar: "An Introduction to Public Health." Despite the gentle introduction, the 41 students enrolled in the two-year master's of public health program will be expected to do more than just sit in classrooms, said Dr. Thomas Bruce, interim dean of the college. Instead, the students -- who include all kinds of full-time professionals, including a flight attendant and doctors -- will get their feet wet in the real world of public health. They'll work on projects to improve health in areas throughout the state. "We'll be very, very much involved in community programs," Bruce said, adding that the first projects the school will embark on will include a rural project in Phillips County and an urban one in Little Rock. "It will be public health in which students actually serve in the community." The college was born out of the voter-approved Coalition for a Healthy Arkansas Today, commonly known as CHART, plan that organized the spending of Arkansas' share of the master settlement with major tobacco companies. The school will receive about $5 million a year from the state tobacco settlement. The college now exists as a school without a building. Classes meet in existing classrooms on the UAMS campus while a three-story building for the college is under construction. That building, due for completion in fall 2003, is going up on top of an existing education building on the campus. College officials hope future grants and funding will increase the school to six floors. The college also exists without a dean. Candidates have been interviewed, and Bruce, who came out of retirement to get the college running, said a permanent dean is expected in mid-April. Bruce said he will become the chairman of the board of directors of Heifer International. Although inaugural events at the school went without a hitch Monday, the future of the college wasn't always certain. Despite its inclusion in the CHART plan, the college faced numerous hurdles that threatened its existence last year as the value of such a program lacked wide appreciation. [Arkansas Democrat-Gazette, Jan. 8, 2002]

• 1/3: Governor Mike Huckabee said Wednesday that the state's tobacco settlement funds should not be tapped without voter approval to offset any of the $142 million in budget cuts in state government. In November 2000, 64 percent of the voters approved a Huckabee-backed plan that outlined how the state would spend its roughly $60 million-a-year share from the national legal settlement with tobacco companies. Some legislators are studying the possibility of using some of the tobacco settlement funds to pay for services that are being trimmed because of the cuts, particularly Medicaid cuts of $50 million in state and federal funds. [Arkansas Democrat Gazette, Jan. 3, 2002]

• As noted below, when the dust cleared from the legislative session, AGING and TOBACCO CONTROL ADVOCATES had achieved major victories in the struggle for tobacco settlement funds. Aging advocates parlayed their multi-year campaign for settlement funds and other state funds into the following: $5 million of settlement funds, matched with $13 million of federal Medicaid funds, for a new $18 million PRESCRIPTION DRUG PROGRAM FOR ELDERS; $1 million in tobacco tax revenues for MEALS-ON-WHEELS FOR ELDERS; $3 million from a new tax on rental cars for TRANSPORTATION SERVICES FOR ELDERS; a total of $4.4 million in capital improvement funds for cities and towns to help build SENIOR CENTERS and COMMUNITY CENTERS FOR ELDERS. The down side was that funding for certain other aging services were cut by $465,000 in 2001-2002 and $609,500 in 2002-2003; among the programs cut were LEGAL ASSISTANCE SERVICES and money for the "Aging Arkansas" newspaper. TOBACCO CONTROL PROGRAMS were funded at $18 million annually, which was a major victory and will enable the state to undertake a significant effort in this area. [Aging Arkansas, May, 2001 and TCSG sources]

• On April 9th, the Senate approved 11 of 12 appropriation bills that would implement the voter-approved initiated act for spending the state's share of the settlement with the major tobacco companies. The Senate voted 35-0, without any discussion or questions, to send these bills to Governor Mike Huckabee. A dozen bills involving tobacco settlement funds represent about a third of Huckabee's legislative agenda. The 12th bill, HB1748 cleared the House 85-7 last week after it was amended to reflect a compromise with Governor Huckabee to add money for House members' priority projects such as PRESCRIPTION DRUGS for the elderly, Meals on Wheels, breast and cervical cancer care and school nurses. The twelve bills together appropriate $56.73 million in FY2002 and $132.36 million in FY2003 for a variety of health care related programs including an expansion of the state's Medicaid health insurance program for the indigent and disabled, a minority-group health initiative, programs to encourage people to quit smoking and to prevent people from beginning, a biosciences research institute, and a school of public health. [Arkansas Democrat-Gazette, Apr 10, 2001]

• On April 2nd, Governor Mike Huckabee gave an address to a joint session of the Arkansas House and Senate. In the address, he stated that the tobacco companies had successfully managed to get people addicted to cigarettes. Because of that, money was awarded in the tobacco settlement cases to address the health problems that usage of cigarettes had caused. He urged the legislators to put aside politics and use the money to improve the HEALTH CARE of the people in Arkansas. "Unlike many states who are doing everything from building roads and making all kinds of unique and rather creative uses of their money, from the very beginning the one thing that has sort of unified all of us has been the idea that we would use this money to address the very serious health needs of the people in our state. [Arkansas House and Senate, April 2, 2001]

• On December 18th, Attorney General Mark Pryor signed papers certifying that the state had finally achieved finality on its tobacco settlement agreement. This means that within weeks the settlement funds will leave an escrow account and go into the state coffers. How the money will be spent will be dictated by the voter initiative approved in November (see below). This means the people of Arkansas will finally get the benefits of the settlement funds. [Arkansas Democrat Gazette, December 19, 2000]

• VICTORY on Nov. 7th on Proposed Initiated Act 1, the CHART measure which allocates the tobacco settlement funds largely to health programs, including AGING and TOBACCO PREVENTION AND CESSATION. With about 2/3 of the returns counted, the measure was far beyond the 50% needed votes; 389,408 votes for, versus 219,797 votes against. Governor Huckabee (D), who strongly supported the measure was thrilled, as were AGING and TOBACCO CONTROL groups. While the legislature could change the measure, it would take a 2/3 vote to do so, and that is not very likely. See below for specifics of what the measure will do. [Arkansas Democrat Gazette, November 8, 2000]

• Both the Arkansas Silver Haired Legislature (SHA) and the Arkansas Association of Area Agencies on Aging (AAAAA) are setting legislative priorities for the 2001 legislative session. The AAAAA priorities have been set and are likely to parallel the SHA ones when the SHA votes at its August 30th mock legislative session. The AAAAA is planning an ambitious legislative agenda which calls for substantially expanded IN-HOME SERVICES for ELDERS, as well as expanded and upgraded TRANSPORTATION SERVICES, and increased pay for nursing home staff. Both the AAAAA and SHA will support increased funding for MEALS PROGRAMS FOR ELDERS, and for INCREASING MEDICAID ELIGIBILITY LEVELS to 100% of poverty to increase the number of elders eligible by about 8000 to 9000 persons. Funding will be sought from a number of sources, including TOBACCO SETTLEMENT FUNDS, general revenues, and an increase in the CIGARETTE TAX. These groups are also strong supporters of the CHART ballot initiative (see below) on the November ballot. [Aging Arkansas, August, 2000]

• This note is simply to summarize the provisions of the November 7th ballot initiative which would direct how the settlement funds would have to be spent. The funds would be allocated as follows: 29% for TOBACCO PREVENTION AND CESSATION PROGRAMS; 8% into a trust fund; 21% for health care research; 15% to create an Arkansas School of Public Health; and 27% to expand health care coverage for prenatal care for pregnant women, EXPAND PRESCRIPTION DRUG BENEFITS AND IN-HOME PERSONAL CARE FOR SENIOR CITIZENS, increase hospital, medical and prescription benefits to Medicaid recipients (INCLUDING ELDERS AND MINORITIES), bring Medicaid eligibility up to 65% of the federal poverty level and raise it to 100% Medicaid eligibility in 5 years (BOTH OF WHICH WOULD BENEFIT ELDERS AND MINORITIES). While this article did not mention it, some of the funds would also go for MINORITY HEALTH PROGRAMS. [Benton County Daily Record, August 17, 2000]

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CALIFORNIA

Total: $25 billion; 1st paymt $306.3 million; 2nd paymt $818.4 million

Under the settlement, 50% of the total funds will go to the State of California; 40% will go to the 58 counties based on population size; and 10% will be split between the cities of San Francisco, San Jose, San Diego, and Los Angeles.

• Fairfield County 9/4: The number of poor area residents signing up for health coverage through the County Medical Services Program grows by 100 every month, and county officials increased the county's contribution for the program by $1 million Tuesday. CMSP extends ongoing, preventive health care to indigent patients, typically uninsured single adults who have chronic illnesses for which they cannot afford treatment. Believed to be the first of its kind in the nation, the pilot program started with about 2,500 enrollees in early 2002 and reached 3,200 enrollees a year later. As of last month, enrollment reached 3,900. While that shows that many residents are use the program and want to stay enrolled, it also means the budget estimate of $12.3 million for the program's second year was too low, said Moira Sullivan, assistant director for the county's Health and Social Services Department. The current projected cost is $14.3 million. Sullivan asked the Board of Supervisors to cover $1 million, half of the difference, using master tobacco settlement money that went unspent last year. The Board of Supervisors voted 4-0 to do that. [Fairfield Daily Republic, August 27, 2003]

• Mendocino County 6/27: The Mendocino County Tobacco Settlement Advisory Committee has announced the recipients of the second round of funding for the Tobacco Settlement Revenue, Technical Assistance Grant. The Board of Supervisors has designated approximately $100,000 per year to distribute for funding to organizations throughout the county. Covelo Community Services District: Ground and surface water contamination assessment, engineering studies and test plans in Round Valley. Big Brothers/Big Sisters of Mendocino County Planning and training of "Brain Gym," an innovative approach to learning through movement. [Mendocino Beacon, June 27, 2003]

• Ventura County 5/13: Much of the $8.3 million in tobacco settlement funding that Ventura County expects for the coming year should be used to shore up cash-strapped public health-care programs, government chief Johnny Johnston said. Johnston is recommending big reductions in funding for private doctors and hospitals, as well as smaller cuts to community health programs run by private nonprofit groups. Money saved from those reductions could then be funneled to the county's public hospital and mental health clinics to blunt the effects of expected cuts in state funding for the 2003-04 budget cycle, the county executive officer said. [Los Angeles Times, May 12, 2003]

• Ventura County 10/17: Ventura County supervisors agreed Tuesday to use $5.5 million in tobacco settlement money to bail out the county's cash-strapped public hospital and mental health agency, angering anti-smoking advocates who said the move would gut their own community health programs. Supervisors insisted they had little choice but to use a portion of the $9.6 million in tobacco funding that the county will receive this year to preserve core health programs. Providing mental health and hospital care for the poor is one of county government's basic functions, several supervisors said. Board Chairman John Flynn called it "a moral issue." [October 16, 2002]

• 9/30: The proposal that led to this debate was Governor Easley's plan to restart the state's economy. It has changed into something more ambitious, more generous and, to some, more worrisome. Both the cancer hospital and the biotechnology training center would be financed by obligating $25 million from the settlements of the national tobacco lawsuits. Anti-smoking groups say that obligating money for a cancer hospital and other projects from the trust fund depletes the money that could be directed toward new smoking prevention programs. Deborah Bryan, director of government relations for the American Lung Association of North Carolina, said the state focuses most of its resources now on medical treatment. "What is missing is the prevention piece," Bryan said. "It's a huge concern to us. We have neglected this arena of health for so long in this state." [Raleigh News & Observer, Sept. 30, 2002]

• Orange County 10/1: Marking the official start to a long-sought-after partnership, the Children and Families Commission of Orange County approved $28.5 million in funding over the next three years for a new initiative between the Children's Hospital of Orange County (CHOC) and the University California Irvine (UCI) Medical Center to create a variety of innovative programs to improve pediatric healthcare throughout the county. "This is a milestone agreement long in the making," said Crystal Kochendorfer, chair of the Children and Families Commission of Orange County. "We are proud to be a part of the process bringing together two of the County's most valuable healthcare assets in providing children with early access to care and meeting the Commission's commitment that every child in Orange County starts school healthy and ready to learn." The Children and Families Commission of Orange County was created as a result of Proposition 10, the California Children and Families Act of 1998. [Business Wire, Sept. 30, 2002]

• Placer County 9/30: The Placer County Board of Supervisors has formally adopted a $421 million budget for the 2002-03 fiscal year. The spending and revenue report approved Tuesday marks a major increase from the past year's $333 million budget. The budget benefits from nearly $40 million from the settlement of a lawsuit against tobacco companies that sought to recover the costs counties incurred treating smokers. The money is earmarked for long-term building plans, including new criminal justice facilities in south Placer and a new building for the Planning Department at the DeWitt Center in north Auburn. The budget also adds $3 million for public safety. [Sacramento Bee, Sept. 29, 2002]

• California State 9/4: A bitterly divided California legislature ended a 61-day stalemate early this morning, passing a budget intended to address a $24 billion deficit that is growing deeper by the month. Critics said the plan relies on illusory savings and accounting gimmickry that would worsen the state's troubles. The budget borrows against anticipated revenue from the national tobacco settlement, Democrats got the deal by agreeing to drop an increase in fees for car registration and eliminating any new taxes on cigarettes. An earlier budget approved by the Democratic-controlled Senate would have raised almost $2 billion through those two taxes, but Republicans argued the taxes would place a disproportionate burden on poor and middle-income residents. The tobacco industry lobbied hard against the cigarette tax. [New York Times, Sept. 2, 2002]

• California State 7/23: California is "one of the most disappointing states" in the nation because the state's leaders are slashing funding for its highly successful tobacco prevention program, according to a national report issued today by the American Lung Association, American Cancer Society , American Heart Association and Campaign for Tobacco-Free Kids. The health groups urged Gov. Gray Davis and the Legislature to use 15 cents of the proposed 63-cent increase in the state cigarette tax to restore funding for tobacco prevention and to reject proposals to borrow against the state's future tobacco settlement funds to address the state's budget shortfall. According to the new report, California will fall from eighth to 20th in the nation in its funding of tobacco prevention if the state's leaders stick with plans to cut prevention funding by $61 million -- 45 percent -- from $134.5 million in Fiscal Year 2002 to $73.54 million in FY2003. The Legislature is still finalizing the state budget. [U.S. Newswire, July 22, 2002]

• Solano County 6/26: Solano County residents have a chance this week to help guide the ways tobacco settlement dollars are spent in their cities. The county gets about $4 million every year from the Tobacco Master Settlement Agreement, which resulted from lawsuits several states brought against major tobacco companies in 1997 to seek reimbursement for costs incurred by treating tobacco-related diseases. In 2000 the Board of Supervisors decided Solano County would spend the money only on programs that help increase access to health care and curb substance abuse. Such programs could include prevention education campaigns, youth development activities and training for merchants who sell alcohol or tobacco. [Fairfield Daily Republic, June 26, 2002]

• Fresno County 6/19: Fresno County supervisors Tuesday launched a plan to use tobacco money to help pay for a new juvenile justice campus. The county wants to raise $75 million for the campus by "securitizing" tobacco payments, which basically means taking cash up front by selling off the rights to annual settlement payments. "We've got to act now -- we can't sit and wait," board Chairman Bob Waterston said. "Everything's good right at this moment." The idea is to issue bonds in exchange for future tobacco settlement payments during the next 40 years or until the bonds are paid. [Fresno Bee, July 19, 2002]

• Ventura County 6/17: Hoping for the best and planning for the worst, Ventura County supervisors are warning health and law enforcement officials that their budgets may be pared further if state cuts are as severe as expected. Supervisors are considering dipping into tobacco settlement and public safety funds to make up for a projected $26-million loss of state revenue. Both proposals are controversial. Sheriff Bob Brooks has already vowed to fight any attempt to cut his $162-million budget. And a citizens committee that makes recommendations on tobacco settlement spending has made clear that it doesn't want that money to be used to close a revenue gap. [Los Angeles Times, June 17, 2002]

• Ventura County 6/9: County officials are eyeing the multimillion-dollar tobacco settlement as a way to blunt sharp cuts to public mental health and public health care programs proposed by the state for next year's budget. The move would cut money out of a wide range of community health-care services that received it in the past year, including prevention aimed at youths and emergency care provided by private physicians and hospitals. About $8 million was awarded to these "new" health-care projects this year. A citizens' oversight committee has recommended spending next year's $9.4 million allotment of the tobacco settlement money on similar programs. In addition, the oversight committee wants to use $15.7 million of unspent tobacco dollars from previous years as an endowment fund and a yet-to-be determined large-scale health-care project. Meanwhile, the county hospital, clinics and mental health programs face losing about $17.3 million -- $14.1 million in state dollars and $3.2 million in county funding -- in next year's budget, which begins July 1. County Executive Officer Johnny Johnston said the tobacco settlement dollars might be the only option the county has to patch up the public health safety net. [Ventura County Star, June 9, 2002]

• Butte County 5/15: Tobacco education and health care advocates don't want tobacco settlement money dropped into Butte County's general fund. With its siren shrieking and lights flashing, an Oroville Hospital ambulance pulled up in front of the Butte County Administration Office Tuesday morning to deliver petitions to qualify a measure for the November ballot to allocate money for tobacco use prevention and health care. Organizers of the FAIR (Full Allocation of Intended Revenues) campaign, which includes the American Cancer Society, American Lung Association, American Heart Association, Butte Glenn Medical Society, and others, say they have almost 12,000 signatures, more than enough to qualify their plan for the November 2002 ballot. To dramatize the emergency nature of the issue, the signatures were pulled from the ambulance and transported by gurney to the county-clerk recorder's elections office. "People are dying because of tobacco, and many are dying because of the deceptive and illegal practices of the tobacco industry," said Dr. Richard N. Gray, Jr., representing Butte-Glenn Medical Society. "The petitions are delivered in an emergency vehicle because we have an emergency." He described an emergency as a situation where "life or limb is in peril." The proposal would direct about 75 percent of the more than $2 million Butte County currently receives from a 1998 settlement . . . The FAIR initiative would ensure this money is spent as it was originally conceived, to reduce the harmful effects of tobacco consumption and diminish the burdensome health care costs of tobacco use, according to Bond. [Orville Mercury Register, May 15, 2002]

• Sacramento 5/15: Governor Gray Davis proposed raising taxes Tuesday on smokers and motorists to help overcome what has grown into a $23.6-billion budget shortfall, saying there was no other way to protect schools. The move reversed a promise Davis made in January not to ask for tax increases. The tax hikes--an $84 increase in the average vehicle license fee and a boost of 50 cents per pack in the cigarette tax--would total $1.75 billion, according to Davis' estimates. But although they probably will account for most of the Capitol's budget debate in coming weeks, they represent only a share of Davis' plan to fill the budget shortfall. Much of the gap would be closed by $7.6 billion in spending reductions, including deep cuts in health programs for the poor. Davis also relies heavily on various accounting shifts, budget transfers and loans, such as borrowing $4.5 billion against the state's future share of the national tobacco settlement and postponing some payments to schools. [Los Angeles Times, May 15, 2002]

• California State 5/14: The Board of Supervisors allocated $8 million of tobacco settlement funds in September to serve health-care needs countywide. For community-based organizations, a competitive process was held to determine the recipients in each targeted health-care area. The following programs are among those funded for this year. -- Tobacco prevention: The defeat of Measure O, the initiative to take the tobacco settlement funds away from public control, was driven in large part by residents' determination to see a significant portion of this money used to protect youth and adults from tobacco. This year, in schools, clubs and youth workshops, more than 15,000 children are receiving focused education on the risks of tobacco use. I can also report closure on the legal matter involving the Measure O ballot arguments and Community Memorial Hospital's lawsuit against the five Coalition Against Measure O ballot signers demanding they pay Community Memorial Hospital's legal fees. Several weeks ago, the coalition's attorney, Fred Woocher, was finally paid for the legal fees associated with the original lawsuits and subsequent appeals. -- David Maron of Camarillo is a businessman and serves as chairman of the Tobacco Evaluation/Oversight Committee. He chaired the Coalition Against Measure O. [Ventura County Star, May 14, 2002]

• California State 5/2: Ending speculation since the March election, county officials who strongly opposed Measure A say they'll enforce the initiative's mandate to spend the local share of tobacco settlement money on health care. The proposed budget to be presented to the Board of Supervisors on May 21 distributes this year's roughly $2.5 million installment of the settlement as required by the ballot measure, county Assistant Administrator Gail Wilcox confirmed. Measure A garnered more than 62 percent approval in the March 5 election. "We're going to comply with the will of the voters," Supervisor Katcho Achadjian said Wednesday. Officials have given few details on why they changed their stance. [San Luis Obispo News, May 2, 2002]

• California State 4/5: With state budget revenue estimates worsening by the day, Gov. Gray Davis has a contingency plan to borrow as much as $4 billion from future tobacco settlement funds -- money that otherwise would pay for cancer treatment and health care for poor children. The Democratic governor initially wanted to borrow $2.4 billion of tobacco funds, but he is considering more after estimates of the gap between state revenues and expenditures widened from an initial $12.5 billion to $17.5 billion for the fiscal year beginning July 1. Some health groups oppose the idea, saying it would cut state spending on health care and violate the intent of the tobacco settlement -- using tobacco company money to pay for tobacco-related illnesses. "It's almost like the tobacco industry is winning, because the money won't be going toward what we think it should be, and that's fighting tobacco," said Ann Goure, a spokeswoman for the American Cancer Society. Besides worrying health groups, the borrowing would put California taxpayers on the hook for an expensive long-term debt that would not be paid off until 2026. [San Francisco Chronicle, April 4, 2002]

• Contra Costa County 4/1: Contra Costa is the only Bay Area county that does not spend money from a national tobacco settlement on smoking prevention programs. Though the Board of Supervisors can allocate the money as it sees fit, the county's Tobacco Prevention Coalition -- a group of 41 individuals and agencies -- sensed flush times following the 1998 agreement between the tobacco industry and the attorneys general of 44 states. Contra Costa's share has come to more than $20 million over the past two years, none of which has been allotted to tobacco-related programs. The money first became available in 2000. Since then, supervisors have allocated the entire county portion to the Health Services Department, which has used it to provide medical services for uninsured residents. The practice rankles coalition members, who say at least a portion should go toward tobacco-education campaigns. The coalition wants supervisors to set aside $650,000 from the settlement to fund youth and ethnic community anti-smoking programs. "It's a modest request, it's minimal," said Janet Abbott, coalition co-chairwoman. "And it's really the honest way to go, because the public already believes the money is going toward tobacco prevention." But with many state revenue sources uncertain at best, Contra Costa supervisors say they likely will continue to use the money to shore up the Health Services Department budget. Supervisors last week acknowledged the importance of tobacco-use prevention, but said the settlement money should pay for the most pressing need, health care for low-income families. [Contra Costa Times, March 31, 2002]

• Butte County 3/19: A ridge doctor claims Butte County officials are plotting to prevent voters from deciding how more than $2 million a year in public funds is spent. But interim County Administrative Officer Lawrence Odle and Treasurer-Tax Collector Dick Puelicher said Dr. Richard Gray is wrong. A plan to "securitize" funds has nothing to do with the proposed election, they said. At issue is about $2.2 million in tobacco-settlement money that flows to Butte County annually. Gray and others want the money spent on anti-tobacco education and to reimburse doctors and hospitals for treating patients with tobacco-related ailments. Gray said the money was intended for these purposes. He called the county's current practice of using it for general purposes unethical. "It burns me that they would try to keep the voting public from having a voice," he said. But Odle said in no way are he and other county officials trying to prevent a vote. And the county is already spending millions on indigent care and other tobacco-related health programs, including education efforts, he added. [Chico Enterprise-Record, March 19, 2002]

• Ventura County 3/6: Ventura County's private and nonprofit hospitals are planning to use their $900,000 share of tobacco settlement money to pay for seismic retrofits on aging facilities and to help cover the cost of providing health care to uninsured patients. Under an agreement that the Board of Supervisors is expected to approve today, each of the seven hospitals would receive up to $90,000 for securing boilers, ventilation equipment and other fixtures that could come crashing down during an earthquake. The hospitals are also entitled to recoup the costs of treating uninsured patients who arrive in emergency rooms. Total compensation available to each hospital varies, from $163,000 for St. John's Regional Medical Center in Oxnard to $98,000 for Los Robles Regional Medical Center in Thousand Oaks. [Los Angeles Times, March 6, 2002]

• San Luis Obispo County 2/6: County supervisors are to introduce a proposed ordinance today designed to undermine Measure A by designating that tobacco settlement funds be used for local health-related programs. Under the California formula, San Luis Obispo County will receive about $2.5 million a year for the next 20 years. Measure A, which voters will decide March 5, specifies how the county's share of the master tobacco settlement agreement should be spent over the next 20 years. Supporters of the measure say that even with the new county ordinance, the supervisors could later divert the money to pay for filling potholes or other budget priorities. The supervisors call Measure A a money grab by doctors and hospital administrators who would receive 29 percent of the settlement funds if voters approve and the courts uphold the measure. [San Luis Obispo News, Feb. 5, 2002]

• California State 1/24: The largest single piece of Governor Gray Davis' plan to patch a $12 billion hole in the state budget may face a tougher-than-expected fight in the Legislature, California's two ranking Democrats said Wednesday. Leaders of the state Senate and Assembly said Davis' plan to borrow against California's tobacco-settlement money likely will be targeted by health advocates who feel it will hurt poor people in the long run. And that could make it hard for lawmakers to support. "It won't be a slam dunk," said Senate President Pro Tem John Burton, D-San Francisco. "I'm not saying it won't get through. But there's going to be a lot of opposition to it." Davis wants the Legislature to mortgage a portion of the billions the state receives from the tobacco industry in settlement of a federal lawsuit. The governor would borrow $2.4 billion this year and pay it back with a portion of the $10.8 billion settlement over the next two decades. Much of the money that comes from those payments, however, is earmarked for health programs. "And a lot of health advocates and others won't want to take that money away," Burton said. But the tobacco-settlement money is "a huge chunk" of the governor's plan to bridge the budget deficit, Davis spokesman Steve Maviglio said. "If this doesn't pass, the Legislature is going to have to start looking for a lot of other cuts." [The Record, Jan. 24, 2002]

• San Diego County 1/18: San Diego County government is providing $4.3 million to 19 area hospitals that are grappling with the rising costs of providing emergency medical services. The Board of Supervisors on Tuesday unanimously voted to share money received from a national tobacco lawsuit settlement with the hospitals. The vote was part of an effort, spurred by the Sept. 11 attacks and subsequent anthrax scares, to improve the region's ability to respond to disasters and terrorism. [San Diego Union Tribune, Jan. 17, 2002]

• California State 1/14: If Governor Gray Davis has his way, California will become the largest state to borrow from future tobacco settlement revenues to fill gaps in its budget. Tapping into the promise of future tobacco settlement money to sell bonds is becoming more popular as states look for ways to close massive budget shortfalls for the first time in years. Advocates call it a smart way to secure a quick lump sum of cash, while others call it an expensive risk that is contrary to the settlement's intent of paying for anti-smoking efforts. "It's sort of seen as easy money," said Jean Ross, executive director of the California Budget Project. Forty-six states sued tobacco companies in 1998 to recoup health-related expenses associated with tobacco use. The resulting $206 billion settlement provides payments of billions of dollars each year to states for at least the next 25 years, based on tobacco sales. Already, governments spend the yearly revenues on a variety of items, including closing shortfalls. It's been more recently, however, that states have looked at selling bonds -- called securitizing -- to pocket more of the money up front. States nationwide are feeling the effects of a recession, the high-tech industry collapse and the fiscal fallout from the Sept. 11 attacks. [Associated Press, Jan. 11, 2002]

• Los Angeles County 12/20: Brushing aside concerns that the money should be saved for Los Angeles County's looming health crisis, the Board of Supervisors on Tuesday approved $3.5 million in anti-tobacco spending. Four supervisors relied on medical officials' arguments that the money would combat smoking and therefore keep health costs lower in the future. But the lone opponent, Supervisor Gloria Molina, said she was alarmed that her colleagues wanted to continue a well-intentioned program given the $1-billion deficit that their health department soon will face. The money will go to groups in the supervisors' districts for various measures to discourage smoking. "While there's a lot of money being spent with all these organizations and some of them are doing a good job, priority of priorities, this is not a good use of dollars," Molina said, noting that hospitals and clinics may be closed in coming years. [Los Angeles Times, Dec. 19, 2001]

• Ventura County 12/18: Ventura County's Terrorism Working Group is among 22 organizations across the county that will divvy up $1.2 million in public health funding, officials said Monday. Money will be used for a variety of nonprofit programs, from a public awareness campaign about bioterrorism to expanded cancer screenings for the working poor. Free dental clinics, more investigation into elder abuse, and school-based public health programs will also receive the grants announced by Public Health Director Paul Lorenz. Funding comes from $10 million the county receives each year from its participation in a states' lawsuit against major tobacco manufacturers. The rest was distributed earlier this year. A citizens advisory group recommended that the $1.2 million be distributed to community groups that can demonstrate emerging needs in certain areas, from communicable diseases to tobacco education. [Los Angeles Times, Dec. 18, 2001]

• Sacramento County 12/13: Caught off-guard by rising cost estimates, Sacramento County supervisors complained to staff Tuesday that the budget process for major construction projects is confusing and undermines public trust in government. The sticker shock included a report that the primary care clinic's cost is expected to jump from $30 million to $41.4 million. In a separate report, the Board of Supervisors learned the previously approved price of $6 million for a new animal shelter and parks department complex at Mather Commerce Center has more than doubled to $15 million. The news surprised and clearly troubled board members, who committed funding to both projects last year from a total of $104 million in tobacco-litigation settlement funds earmarked for big-ticket construction projects and purchases. The animal-care site is among eight major projects approved by supervisors in the past year at a cost of about $165 million. The board has set aside $80.7 million for the projects from the tobacco settlement, and $10 million more from grants and proceeds from past bond sales has been earmarked by staff. [Sacramento Bee, Dec. 12, 2001]

• San Diego County 12/10: A San Diego Superior Court judge, Ronald S. Prager, ruled that an advertising campaign by the R. J. Reynolds Tobacco Company violated the 1998 settlement in a nationwide tobacco lawsuit, which bans many types of outdoor advertising for tobacco products, including billboards. The lawsuit challenged the outdoor promotion of Nascar Winston Cup and drag racing events. It is one of three cases that the state attorney general, Bill Lockyer, has brought accusing R. J. Reynolds of violating the settlement. [New York Times, Dec. 8, 2001]

• California State 11/13: California counties got a windfall that will total more than $10 billion over 25 years from the tobacco settlement. But counties aren't spending the money on smoking cessation and anti-tobacco campaigns. Instead, financially strapped counties are using it for various projects, including an animal shelter, road repairs, debt repayment or just to prop up general funds. Of the $1.2 billion doled out to local governments so far, only 18 percent has been invested in health programs. Less than 6 percent has gone to prevent smoking, according to figures calculated by the Tobacco Industry Monitoring Project, a state-supported program based at the University of Southern California. The 58 counties and three cities each receive an annual payment based on population and tobacco sales, as part of the 1998 Master Settlement Agreement with major tobacco manufacturers. But not enough of that money is going "to adequately fight the tobacco industry's campaign to recruit new smokers," said Paul Knepprath, vice president of government relations for the American Lung Association of California. [Associated Press, Nov. 11, 2001]

• Orange County 9/26: The Orange County Board of Supervisors on September 25, 2001 approved spending $5.7 million to expand delivery of basic health care to the poor through a coalition of community clinics. The money, which comes from the county's share of tobacco settlement, will be used to help support 29 clinics operated by 17 organizations, said Marty Earlabaugh-Gordon, executive director of the Coalition of Orange County Community Clinics. Earlabaugh-Gordon describes the funding as "a sound investment in community clinics that will strengthen the ability of the coalition to provide clinical health-care services." Last year, the clinics provided medical care for 133,000 people during 366,000 visits. The measure was approved 4 to 0, with Supervisor Tom Wilson absent. Supervisor Jim Silva said the money would help reduce overcrowding in hospital emergency rooms -- often the only place of treatment for those without insurance. "Community clinics really fill a gap," Silva said. The coalition, which began in 1974, serves as an advocate and grant-seeker for community health clinics. Its main focus is getting health care to the elderly, the poor and the uninsured. [Los Angeles Times, Sept. 26, 2001]

• Ventura County 9/26: On September 25, 2001 after rejecting a last-ditch effort to increase dollars for anti-smoking programs, Ventura County supervisors approved an $8-million expansion in health care services ranging from immunizations and dental work to creation of a psychiatric residency program at the county hospital. Supervisors thanked a volunteer citizens group that made recommendations on how to spend the county's share of the tobacco settlement funds. The citizens group advised supervisors to spend 15% of tobacco settlement revenue for anti-smoking efforts. Many California counties have followed that guideline, but nationally just 5% of the money has been used to help Americans kick the cigarette habit. Board Chairman Frank Schillo noted that public schools receive $400,000 a year in cigarette taxes to educate children about the dangers of smoking. And other supervisors questioned the effectiveness of some education programs in preventing smoking. Anti-smoking activist vowed they will be back next year to again push for higher funding. [Los Angeles Times, Sept. 26, 2001]

• Bakersfield 9/12: On August 29th, County Supervisors in Bakersfield wrapped up work on the county budget for the current fiscal year, which began on July 1 and runs until June 30, 2002. In order to offset a substantial revenue shortfall, the Supervisors raided the tobacco settlement fund and used $18.7 million of these funds to help balance the budget. The settlement funds will be used to fund the Kern Medical Center, to replenish the county's tax litigation reserves, and to pay for maintenance work and a few capital improvement projects. While Supervisors said they did not want to use the settlement funds for these purposes, they did. [Bakersfield Californian, Aug. 30, 2001]

• Sacramento County: 9/12: Sacramento County has become the first county in California to sell its share of its settlement money, in the form of bonds, in order to get a one-time payment of about $172 million. The county has now decided to use $69.( million of that to go into a fund for health youth and TOBACCO EDUCATION programs. An additional $102 million will be spent as follows: $40 million for juvenile hall expansion; $30 million for a new primary care clinic; $15 million for cleaner burning garbage trucks; $6 million for a new animal shelter; and $5.2 million for libraries in Carmichael and Rio Linda. [Sacramento Bee, Aug. 31, 2001]

• Ventura County: Long-awaited dollars to help Ventura County's doctors and hospitals recover the costs of unpaid medical bills are on their way, along with money to expand health-care programs. An advisory committee agreed that the county's public hospital and county-run health programs should receive the largest share--at least $4 million--of the $8 million in tobacco settlement funds available this year. Another $1.8 million should be divided between private hospitals and doctors to cover uncompensated health care for treating uninsured patients, and $1.2 million should be earmarked for tobacco education and prevention programs, the group decided last week. Members of the committee said they are relieved that after five months of meetings, and criticism that they were moving too slowly, their work is nearly done. [Los Angeles Times, August 20, 2001]

• Statewide:During the end of July, California lawmakers passed a $103.3 billion budget. While we were unable to finds specifics, the budget highlights specified that the $402 million from the tobacco settlement funds "will be used solely for health care programs, including expanded health coverage for the uninsured, cancer research and treatment, and ANTI-TOBACCO efforts." Included in that money is an expansion of the Healthy Families Program for children and to 250 percent of the federal poverty level and $20 million to provide grants to local nonprofit organizations to reduce smoking among teens and college-aged youth. An additional $475 million will be given to local governments in California. Unlike in past budgets, the budget specified that "these funds may be used for any public health purpose deemed a local priority." Although the money will not be coming from the tobacco settlement funds, AGING ADVOCATES might be interested to know that the Senior Citizens Property Tax and Renters' Tax Assistance, a program for low-income seniors and disabled individuals will be permanently increased by 45 percent above the level of benefits provided in 1999; this will cost an additional $75 million in 2001-2002. [Budget Highlights, State Budget, 2001-2002]

• Sacramento County: On June 17th, TCSG learned from the Northern California Senior Legal Hotline (NCSLH) that they have just been awarded a contract from Sacramento County for $50,000 over the next three years to provide legal education for older persons on various health subjects. In addition, it appears that NCSLH will also receive $15,500 to pay for an outcomes study of this project. The money for this comes from the tobacco settlement funds that Sacramento County receives each year.

• Stanislaus County:On June 12th, the Board of Supervisors authorized $6 million to be spent to build community centers and improve streets in Stanislaus County. The board earmarked $4 million for street work in Empire and in the Shackelford School and Robertson Road areas in south and southwest Modesto. The other $2 million will pay for a community center in Grayson and the community hall portion of government buildings in Salida and Waterford. The county executive's office had recommended spreading another $2 million from the tobacco settlement among nonprofit groups, based on proposals to be submitted this summer, but the Supervisors agreed to discuss this before making a decision, and they may target efforts that help people get health care. [The Modesto Bee, June 13, 2001]

• San Joaquin County: While it has been over two years since they have received the tobacco settlements money, officials are just getting around to deciding how it should be allocated. As of April 2nd, officials said the majority of the money has been earmarked for the county hospital. Of the $13.5 million they have received thus far, officials have allocated $10 million to the second phase of a reconstruction project at San Joaquin General Hospital, $2.7 million for technology upgrades (to be used mainly for a new communication system for the sheriff's and fire emergency medical departments), and $170,000 for road improvements. Over the next ten years, county officials expect an additional $62.7 million. Long-term plans for this money include $25.1 million for health care facilities, $12.6 million for road maintenance and construction, $12.5 million for capital improvement projects and $12.5 million for new technology. [Modesto Bee, April 2, 2001]

• Orange County: On December 19th, the Orange County Supervisors agreed to hire 23 new employees, including nurses, analysts and health educators to help determine how more than $14 million in settlement funds will be distributed this year to hospitals, clinics and health programs. The money being split is just the money for this current year. Future settlement funds will go entirely for health care, per the voter initiative approved in November, unless the Supervisors succeed in their lawsuit to have it stricken. Juliette A. Poulson, interim director of the county Health Care Agency, said the new employees will review existing and new programs that target health needs. Under the plan, 14 positions wiull provide outreach services to OLDER ADULTS and those in the county who lack basic health care. Employees, including public-health nurses and social workers, will visit homes, family resource centers and SENIOR CENTERS tjo conduct health assessments, education, screenings, referrals and case managment. Other positions will be used to provide planning support and monitoring of health education campaigns, alcohol and drug treatment and TOBACCO PREVENTION AND CESSATION programs. In addition, funds were approved to hire two staff analysts to support additional contract services and one to serve as the project manager for tobacco-settlement services. [Los Angeles Times, December 20, 2000]

• On July 13th, a lawsuit was filed in Los Angeles County Superior Court on behalf of six Medicaid recipients who are seeking a share of the settlement proceeds that will be coming to California. The lawsuit is seeking class action status on behalf of tens of thousands of low-income and disabled Medicaid patients who have been treated, or expect to be treated, for smoking-related illnesses, according to John Rowell, the plaintiffs' attorney. The suit claims that Medicaid recipients are entitled to whatever settlement funds are left over after the state recovers the money it spent to treat smoking-related illnesses. As such, the suit should not affect state-specific finality of the California settlement because it deals with how the money will be spent, not elements of the settlement itself. Similar suits have been filed in Florida, Wisconsin and Colorado (see State Updates below for these states). [Bloomberg, July 13, 1999]

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COLORADO

Total:$2.7 billion; 1st paymt $32.9 million; 2nd paymt $87.9 million

• 1/19: The state Joint Budget Committee has nixed Governor Owens' proposal to securitize the state's tobacco funds, a move that will - for now - leave intact tobacco education and cessation efforts. [Vail Daily News, January 18, 2004]

• 5/2: State Treasurer Mike Coffman summed up Colorado's use of its share of a national tobacco lawsuit settlement: "Not one dime of this money goes to an injured smoker," Coffman said. Very little of it has gone to pay for health-related spending of any kind. The state's politicians have raided a revenue source intended to make up for public payments for smoking-related illnesses. They have turned it into a Ponzi scheme of public administration. Because of the raids on the tobacco funds, the Children's Basic Health Plan is about to turn kids away from a program that pays medical expenses for kids of the working poor. "It's boggling to us that the program that could help solve the problem that led to the tobacco settlement has been gutted," said Chris Sherwin, executive director of the Colorado Tobacco Education and Prevention Alliance. [Denver Post, April 28, 2003]

• 3/27: State Treasurer Mike Coffman warned Wednesday that Colorado's fiscal problems might force the state to risk more than half of its $2.9 billion tobacco settlement to raise enough money for an emergency reserve. Coffman, whose office would handle the money-raising transaction, said now is a bad time to go to the market, in part because competition among states will make interest rates higher, and because of a negative credit watch for tobacco-settlement money. He plans to meet with investment bankers today to see exactly how bad the situation is. Under a plan to be presented to the legislature next week as part of the 2003-04 budget, Colorado would pledge roughly $1.4 billion of its $2.9 billion settlement to investors - most likely to an investment firm that would then sell bonds. [Denver Post, Mar. 27, 2003]

• 3/6: Local health and human service nonprofits are looking to Denver nervously this week, as the state Legislature works on a budget for the upcoming year. A proposal to shift money from the state's share of the national Tobacco Settlement Fund from health programs into transportation and other areas is of particular concern, say officials at nonprofit health and human service organizations. Groups like the Valley Partnership for Drug Prevention in Aspen and the Family Visitor Program in Glenwood Springs are likely to lose funding if the shift is made. Mountain Valley Developmental Services, which works with developmentally disabled residents and their families, is also facing cuts. [Aspen Times, March 6, 2003]

• 10/25: Colorado lawmakers say they will look at plans to sell part of the state's $2.9 billion national tobacco case settlement to plug part of the current $400 million hole in the state budget. Members on the state's budget panel Tuesday confirmed they will review those proposals. The plan could jeopardize $75 million in health and reading programs for poor children funded with tobacco dollars, but it also could save taxpayer-funded state programs and avoid layoffs for now. The impact on programs is not yet known. "We'll look at all possibilities," said Sen. Peggy Reeves, Democratic vice chairwoman of the Joint Budget Committee, which would make the recommendation to the full legislature. "I have a feeling that what we'll end up needing to do is cut tobacco-funded programs. You can't keep scaling back everything and make it work." [Associated Press, Oct. 23, 2002]

• 10/17: PAGOSA SPRINGS - The $109 million in the Colorado's tobacco trust fund is gone, spent by Gov. Bill Owens to pay down the debt in the wake of an emergency - wildfire fighting - says the manager of advocacy for state anti-tobacco groups. The governor's office presented a different version. Chris Quint, appearing for the Colorado Tobacco Education and Prevention Alliance, spoke to a group of tobacco educators, including several from the San Luis Valley, here last week. He explained that the Legislature permitted Owens to divert the tobacco trust fund dollars into the general fund and then use them in the event of an emergency. The emergency was the budget shortfall. Quint said tobacco prevention and education would receive about $15 million a year from the tobacco settlement over the next 25 years. The state will receive about $100 million a year for that period for use in a variety of programs. But the trust fund is gone. Dan Hopkins, the governor's press secretary, said Monday that no tobacco settlement money went into fighting the wildfire emergency, although the Owens administration has borrowed from the fund by expressed authority of the Legislature. [Pueblo Chieftain, Oct. 15, 2002]

• 3/18: Some of Colorado's tobacco settlement windfall could go up in smoke - but some see it as a sign of success, not reason for alarm. In a pointed warning, the Council of State Governments predicted last week that tobacco settlement funds for states could be about 20 percent less than expected over the next decade. The reasons: Fewer people are smoking, plus the tobacco giants who signed the settlement agreement in 1998 have seen their market share start peeling off to smaller companies not covered by the pact. If trends continue, Colorado's share could fall several hundred million dollars short of the $2.7 billion projected over 25 years, said council spokeswoman Julia Nienaber. Colorado spends the money - $299 million since 1999 - on literacy, health and anti-tobacco programs. [B&W NewsReal, March 13, 2002]

• 2/25: An angry Sen. Norma Anderson gave up the fight Wednesday over her bill that limited the cost to tobacco companies of appealing when they lose lawsuits. But the Lakewood Republican didn't give up without a few choice fighting words aimed at those who attacked her for carrying SB 8. "There has been so much misleading and incorrect information extended on this bill that I've made this decision (to let it die)," Anderson told lawmakers. "I may have the votes in here to pass the bill, but I do not want to put the rest of you in the same position I've been put in. I think I've been called every name in the book for the first time in my 16 years of being here -- even a political whore." Her bill would have set a $25 million cap on the appeal bond that could be required of some tobacco companies. The cap applied to companies that are paying millions to Colorado and other states as part of a legal settlement. Anderson said she wanted to safeguard the $100 million a year that Colorado now gets from the settlement by ensuring tobacco firms weren't forced into bankruptcy by high appeal bonds. She ran into a buzz saw of opposition, including a full page ad in the Rocky Mountain News on Tuesday by the Colorado Tobacco Education and Prevention Alliance blasting the bill as "special protection for big tobacco." Before she laid the bill on the table, a move to kill it, Anderson said the groups who have led the opposition "are the same ones who have their hands out to spend the tobacco settlement money." [Rocky Mountain News, Feb. 21, 2002]

• 2/13: A bill critics say gives the tobacco industry an edge in fighting lawsuits got a new breath of life Monday. The bill slipped out of the Senate Judiciary Committee two weeks ago over stiff opposition and then was temporarily derailed. A parliamentary move by the committee chairman delayed the bill. But Sen. Rob Hernandez, D-Denver, joined Republicans Monday to send SB 8 to the full Senate on a 4-3 vote. Hernandez said he agreed to reconsider his vote after the first committee action, which allowed for the delay, only as a favor to Sen. Ken Gordon, D-Denver, the committee chairman. But Hernandez said that he hasn't changed his mind on the legislation. The bill by Sen. Norma Anderson, R-Lakewood, sets a $25 million limit on the bonds some tobacco companies must post to appeal a civil suit. The cap would apply to any tobacco company that has signed off on the settlement of a national lawsuit by agreeing to pay millions to Colorado and most other states. Anderson said she'll change the cap to $100 million on the Senate floor. Anderson said the bill merely protects tobacco companies from being forced into bankruptcy over a civil court action. That would threaten the 1998 settlement, which pumps roughly $100 million into Colorado annually. [Rocky Mountain News, Feb. 12, 2002]

• 2/6: A tobacco bill that was sidetracked by a parliamentary move will be back in the Senate Judiciary Committee next week for a vote. Sen. Ken Gordon, D-Denver, said he'll ask the committee once again to vote on SB 8 Monday. The bill initially was approved by his committee but called back when Gordon convinced Sen. Rob Hernandez, D-Denver, to reconsider his vote. Republicans called it an "underhanded way" to defeat the bill and little more than a "pocket veto," which is barred by the Colorado Constitution. At the time, Gordon refused to say whether he would have another vote on the measure. The bill declares that tobacco companies can be required to post an appeal bond of no more than $25 million in civil litigation. It's designed to prevent those companies from being forced into potential bankruptcy. [Rocky Mountain News, Feb. 5, 2002]

• 10/3: After hours of clashing behind the scenes, four lawmakers on Tuesday Oct. 2, 2001 hammered out a compromise to help fund cancer treatment for uninsured women until 2009 using both tobacco-settlement money and taxpayer dollars. Late Tuesday, the Senate gave final approval to Senate Bill 12 and sent it to the House for consideration. The measure would match federal dollars at a 65-35 split to pay for breast and cervical cancer treatment. The state's 35 percent portion through 2003 would come from interest accumulated from money that pays for tobacco prevention and smoking cessation. After 2003, money would shift from tobacco interest to taxpayer revenue, which many believe is a more stable, long-term source of funding. [Denver Post, Oct. 3, 2001]

• 9/18: Attorney General Ken Salazar has filed a lawsuit against seven foreign tobacco companies for failing to pay their escrow obligations under a Colorado tobacco law. The lawsuits were brought under a law enacted in 1999 as part of the implementation of the 1998 Master Settlement Agreement with the major domestic tobacco companies. Tobacco companies that are not parties to the agreement are required to pay approximately one cent into escrow accounts for each cigarette that they sell in Colorado. Salazar said failure of the manufacturers to comply with the escrow funds law could result in the termination of their right to sell cigarettes in Colorado, and a penalty of up to 300% of the amount improperly held from escrow for knowing violations. The escrow amounts currently past due total approximately $15,000. [Wall Street Journal, Sept. 18, 2001]

• On June 13th, thirteen research teams were awarded $6 million from the settlement money. In its first round of awards, the Colorado Tobacco Research Program funded studies of smoking-related illnesses, the effectiveness of PREVENTION PROGRAMS, and public attitudes about smoking. Up to 8 percent of the annual payments will go toward tobacco and substance-abuse research. [Rocky Mountain News, June 15, 2001]

• As of May 29th, Colorado had received more than $200 million from the tobacco settlement. This money has been allocated to seven different causes: reading programs for youth, tobacco education and prevention, children's health insurance, tobacco research, nurse home visitor programs, low income health care, and the Veteran's trust fund. While these may all be good programs, only two of the seven have anything directly to do with tobacco and not a dime of the money is going to help the people whose suffering spawned the lawsuit - victims of emphysema, lung cancer, and other smoking-related illnesses. Nurse Mary White, who treats such patients as a supervisor of cardiopulmonary rehabilitation at Montrose Memorial hospital, said some of the money should be helping them. Instead of suffering through their last years tied to home and an oxygen concentrator, more patients should be able to obtain education, drugs, and portable liquid oxygen that would allow them to live active lives, White said. [Rocky Mountain News, May 29, 2001]

• On August 16th, the state Department of Public Health and Environment announced the awarding of the first $615,000 of settlement money to go for TOBACCO PREVENTION AND CESSATION PROGRAMS. The money went to a number of county health departments, among others. [The Gazette, August 19, 2000]

• On May 2nd, legislators again rejected endorsing a bill backed by the State Treasurer which would have authorized the state to issue bonds backed by settlement funds, in return for a big up-front payment, but a large payment also to the investment houses that would have helped the state arrange the offering. This probably kills the bill for this session. [Denver Post, May 3, 2000]

• On April 27th, the House and Senate agreed on a tobacco settlement bill, SB 71, sponsored by Senator Norma Anderson (R) and Representative Marcy Morrison (R), and sent it to Governor Owens, who is expected to sign it. The bill allocates the anticipated approximately $100 million annually in settlement funds as follows: 19% up to $20 million for Owens' Read-to-Achieve literacy program; about $3 million, increasing to $19 million, annually for a nurse home-visit program for low-income parents; 15% or about $15 million for ANTI-TOBACCO PROGRAMS; 10% up to $10 million for the Children's Health Insurance Program; 6% or about $6 million into grants for community health centers; 8% for tobacco-related research; 1%, or about $1 million annually, for health needs of AGING VETERANS; and the remainder into a trust fund out of which interest could be spent in the future. The trust fund apparently will start out getting about 38% of the annual funds, but this will decrease to 19% over the years; at the same time, the visiting nurse program would start out getting 3% of the funds, but this would increase by 2% annually until it reaches 19% over time. Meanwhile, the legislature is still trying to decide whether to pass HB 1454, a bill backed by State Treasurer Coffman, which would authorize the state to issue bonds backed by the settlement funds in order to get a large up-front payment which would then be invested , with interest to be spent on the various programs. There are strong advocates for the bill, and equally strong opponents of it, including TOBACCO CONTROL GROUPS. The legislature hopes to adjourn by May 3rd, so it isn't clear what will happen to HB 1454. If it passed, all the foregoing dollar amounts would be altered significantly. [Denver Post, April 28, 2000 and Pueblo Chieftain, April 29, 2000]

• A Durango man has filed a lawsuit in Federal District court, seeking class action status, and claiming a share of the settlement funds for Medicaid recipients in Colorado who have smoking-related illnesses. His attorney, William Zimsky, says that the suit is similar to one filed recently in Wisconsin [another such suit was filed recently in Florida] (see below for info on both suits), which also claims that, under the federal Medicaid law, recipients are entitled to part of the settlement funds which the Medicaid program did not spend for the treatment of tobacco-related illnesses. Former Attorney General Gale Norton disputed the claim, saying that Colorado was one of the few states which did not file their lawsuit based on the Medicaid statutes. This suit does have the potential to inject itself into the debate over how the settlement funds will be spent, when the legislature and Governor re-visit this issue next session. [Rocky Mountain News & Reuters, May 19, 1999]

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CONNECTICUT

Total: $3.6 billion; 1st paymt $44.6 million; 2nd paymt $119 million

• 8/30: Democratic gubernatorial candidate Bill Curry on Monday unveiled his first television spot of the campaign, challenging Republican Gov. John G. Rowland on Connecticut's fiscal problems. In the 30-second ad, Curry looks into the camera and says: "Gov. Rowland, you inherited all the revenue from a new income tax, two new casinos, billions in a tobacco settlement and the Wall Street boom of the century. "Now, Connecticut faces a billion dollar deficit, and we are the most indebted state in the nation. What did you do with the money?" "It really does frame the debate," said Roy Occhiogrosso, [Newsday, August 26, 2002]

• 4/8: Faced with a growing budget deficit, Gov. John G. Rowland's administration is looking at a longshot option. Instead of collecting the tobacco money at the current rate of roughly $100 million a year for 25 years, officials are considering whether to sell off the rights to several years' worth of payments. The up side is that Connecticut could swiftly rake in millions of dollars to close the gaping hole in the state budget, and perhaps stave off further tax increases or spending cuts. The down side is that a financial firm or whoever else "buys" the tobacco money would likely pay less than full value. Some experts say Connecticut might reap less than $40 million for one year's worth of tobacco payments. "I would say (selling tobacco money) is being looked at, but we haven't arrived at a point where we think it is advisable," said Marc Ryan, Rowland's budget chief. "I'm very, very suspicious about this but, given the situation we are in, we are looking at it." Connecticut isn't alone in considering such an action. [Danbury News-Times, April 7, 2002]

• 2/6: Anti-smoking advocates and municipal officials are again pushing for legislation that would allow towns to ban smoking in public places. West Hartford-based MATCH, or Mobilize Against Tobacco for Children's Health, said Monday that communities should have the right to ban smoking in restaurants, shops and other public areas. Under a 1993 state law, smoking was banned in municipal and state buildings. As part of a compromise agreement, municipalities were not allowed to enact their own smoking regulations. Legislation giving control back to municipalities was proposed last year but was killed in the final days of the session. [Hartford Courant, Feb. 4, 2002]

• 1/21: Even though Connecticut has received hundreds of millions of dollars from tobacco related lawsuits, state Attorney General Richard Blumenthal is still worried about smoking as a health risk. "One statistic says it all: The average age that people begin to smoke in Connecticut is 11 years old," Blumenthal said in a written statement. Blumenthal said Tuesday he is disappointed that Governor John Rowland wants to use money obtained in lawsuits against the tobacco industry to balance the state's budget. Blumenthal wants to use a larger percentage of the money for anti-smoking campaigns. A recent report by the Campaign for Tobacco-Free Kids ranks Connecticut 45th out of the 50 states and the District of Columbia in terms of using funds from the 1998 Master Tobacco Settlement to educate children about the dangers of tobacco use. "As citizens of a state with a proud record of leadership in public health, we ought to be outraged and embarrassed by this report," Blumenthal said in a press release. [Yale Daily News, Jan. 18, 2002]

• 1/17: The state belongs in a "tobacco hall of shame" because of the way it has used money from the settlement of lawsuits against the tobacco industry, state Attorney General Richard Blumenthal said today. Gov. John G. Rowland has proposed using more money from the settlement to help balance the state's budget. Blumenthal has advocated using the money for programs designed to prevent smoking. "The proposal to raid the Tobacco and Health Trust Fund is a short-term fix with devastating long-term effects," said Blumenthal, whose lawsuit against five major tobacco companies four years ago led to the settlement. According to the General Assembly's nonpartisan Office of Fiscal Analysis, the state will have received nearly $400 million from the tobacco industry by the end of the fiscal year in June. Of that money, $336 million has gone to support the overall state budget, $5 million was directly allocated to fight smoking, and $57 million was designated for the trust fund. Interest from the fund is to be used for anti-smoking programs. Rowland has proposed taking another $41 million out of the tobacco settlement trust fund to offset a projected deficit of $200 million. [Hartford Courant, Jan. 15, 2002]

• 1/4: Anti-smoking groups are fuming over Gov. John G. Rowland's proposal to use more money from the settlement of lawsuits against the tobacco industry to help balance Connecticut's budget. With the state facing a projected deficit as high as $200 million, Rowland has proposed taking another $41 million out of the tobacco settlement trust fund to help balance the books. "Completely outrageous," said Ellen Dornelas, a psychologist who directs Hartford Hospital's smoking cessation program and co-chairs MATCH, or Mobilize Against Tobacco for Children's Health. Attorney General Richard Blumenthal, whose lawsuit against five major tobacco companies four years ago led to the settlement, called the governor's proposal "disheartening and discouraging." According to the General Assembly's nonpartisan Office of Fiscal Analysis, the state will have received more than $397 million from the tobacco industry by the end of the fiscal year in June. Payments began in 1999. Of that money, $336 million has been pumped directly into the general fund to support the overall state budget. Just $5 million was directly allocated to fight smoking, with another $57 million designated for a Tobacco and Health Trust Fund. Interest from the fund is to be used for anti-smoking programs. [The Associated Press, Jan. 3, 2002]

• On March 29th, in a battle of politics as much as of substance, Republicans in the House, who have just 51 members versus 100 Democrats, offered an amendment to a tobacco settlement bill which would have moved $32 million of settlement funds to the state PRESCRIPTION DRUG PROGRAM FOR ELDERS. The amendment failed on a vote of 96 to 47. However, analysts said this was a strong indication that the legislature is very likely to find money somewhere, whether from settlement funds or elsewhere, to increase both funding for and eligibility levels for the SENIOR PRESCRIPTION DRUG PROGRAM. The Republican amendment went far beyond the expansion in the drug plan that Governor Rowland (R) offered in his budget by raising income eligibility levels for the plan. Democrats indicated their opposition was not so much to the substance of the amendment as to do it outside the regular budget process, and also to using settlement funds for this purpose. [Hartford Courant, March 30, 2001]

• The debate over how to spend the tobacco settlement funds continues as anti-tobacco advocates, including the state Attorney General and the Senate Majority Leader, claimed on March 15th that the state is only spending a fraction of what it should on ANTI-SMOKING programs. Dozens of activists wearing yellow ribbons in honor of dead loved ones descended on the Legislative Office Building on March 15th, spoke at a public hearing, lobbied lawmakers and staged a news conference to underscore the need for a bigger commitment to anti-smoking programs. A spokesman for Governor John G. Rowland said the General Assembly has been a full partner in spending tobacco settlement money, including a state fund set up to address the medical costs of smoking. [Connecticut Post, March 16, 2001]

• On August 9th, TOBACCO CONTROL ADVOCATES reacted to the release of a report on tobacco by Surgeon General David Satcher by pointing out that Satcher had said that states should be spending 20 to 25% of their settlement dollars on TOBACCO PREVENTION AND CESSATION PROGRAMS, whereas Connecticut had, thus far, allocated just $5 million out of the $150 million it received in the 1999-2000 fiscal year. Ellen Dornelas, of the Mobilize Against Tobacco for Children's Health group, said that the state has virtually no funding for any element of a comprehensive tobacco control plan. Ann Moore, a state Office of Policy and Management spokesperson, said the state had set aside $20 million of settlement money in both the 1999-2000 and 2000-01 fiscal years for tobacco control programs, and that a board of trustees was now in the process of being appointed to oversee how the money is to be spent. She said the board is to issue a report in February to the legislature on how to spend the funds. Dornelas stood by her statements and said the recent $1 million state education department program called Science, Tobacco & You for fourth and fifth graders was a one-shot deal and was intended to be a part of a comprehensive statewide program, which she said the state does not have. [AP in Boston Globe, August 9, 2000]

• On Feb. 9th, Governor Rowland (R) submitted his budget message to the legislature. Since Connecticut's legislature passed a biennial budget last year, this budget submission makes recommended adjustments in actions taken last year, which includes new allocations for the coming fiscal year. From the budget documents, it is not easy to discern everything that is being proposed with the settlement funds, but the following is our current understanding, which is subject to revision later. The governor's budget document says the following: "At the time of passage of the biennial budget last session, Connecticut was anticipated to receive $300 million over the biennium. Approximately $166 million was to be received in FY'1999-00, with $78 million being transferred into the General Fund for on-going programs, $20 million into the Tobacco & Health Trust Fund, $5 million to the OPM Tobacco Account for one-time TOBACCO CESSATION & EDUCATION PROJECTS [our emphasis], and $63 million to be carried forward. In FY'2000-01, another $134 million was to be received, bringing the balance to $196 million. About $150.3 million was scheduled to go to the General Fund and $20 million more into the Trust Fund, leaving $26 million to be carried forward into future years." However, the budget document continues, the state's settlement allocations were reduced due to lower tobacco sales, leaving the state with $15.4 million less in FY'1999-00 and an anticipated $21.7 million less in FY'2000-01. These reductions will reduce the $150.3 million transfer to the General Fund to $139.2 million in FY'2000-01. In spite of the lower payments, the governor still proposes to put another $20 million into the Tobacco & Health Trust Fund. At the end of FY'2000-01 there would be no funds to carry forward to the next year. [Still with me?] Of the $139.2 million to be spent out of the General Fund, the governor's plan has 21 line items listed under "Public Health Initiatives" and 7 line items listed under "Education is Our Future Initiative." Of the Public Health line items, the largest is $75 million to "eliminate the Hospital Gross Receipts Tax," followed by $10.5 million for a "Tax Credit for Providers of Medical Coverage through HUSKY A &/or B;" both of these items are actually to cover tax cuts the governor is proposing for hospitals and HMO's in the state - in other words, $86 million in settlement funds this coming fiscal year would go for tax cuts for large medical providers. Also listed as line items under the Public Health Initiatives is $400,000 for "SMOKING ENFORCEMENT" and $200,000 for "TOBACCO EDUCATION." The $5 million for TOBACCO CESSATION & EDUCATION PROJECTS allocated last year would still be available to the extent it hasn't been spent, but there is no increase, as far as it appears. Also listed under the Public Health Initiatives are the following which appear to apply to ELDERLY PROGRAMS and/or disabled programs, I think: $1.5 million for ASSISTED LIVING Pilots; $500,000 for Expanding CONGREGATE HOUSING Opportunities; $5.5 million for Expansion of the Connecticut HOME CARE Program - Original Budget (possibly this was included in last year's biennial budget?); $4.9 million for New Expansion of the Connecticut HOME CARE Program; and $5.8 million for Personal Care Assistance/ABI Waiver Services. It is not clear how these allocations compare to the prior fiscal year allocations, nor is it clear if any of these produce federal match under the Medicaid program or some other program. The largest portions of the Education Initiatives are $10.8 million for Expansion of Magnet Schools, with another $2,7 million for Charter Schools, and $2 million for Expansion of School Based Child Health and $2.1 million for OPEN Choice. [I leave it to others to help decipher some of this.] [Governor's Budget, Feb. 9, 2000]

• In finishing work on the FY'2000 budget, the legislature allocated $5 million for TOBACCO PREVENTION AND CESSATION PROGRAMS. While this is less than tobacco control advocates had sought, it is a start, and the legislative leadership has indicated that next session may produce a more comprehensive plan fro halting tobacco use in the state. [CTFK memo, July 13, 1999]

• In a special legislative session called because work had not been completed by last Wednesday's deadline, the Senate on June 14th passed a bill which allocates the tobacco settlement funds; the bill now moves to the House. The Senate bill allocates the approximately $300 million the state expects to receive over the next two years. TOBACCO CONTROL PROGRAMS would receive $5 million, to be given out in grants to groups to fight tobacco use. The legislature set aside $40 million over two years to go into a trust for future use, as yet unspecified. About $228 million is to go to education needs and various public health programs. Rochelle Ripley of the anti-tobacco MATCH Coalition said of the $5 million, "it's a start." Dispersal of the anti-tobacco funds would be based on agreements reached among the legislative leaders and the governor's office. Senate President Kevin Sullivan (D) said the plan postpones real anti-tobacco efforts until next year when he hopes a more comprehensive plan can be developed. Senate Republicans opposed another plan which would have allowed the trust fun's principle and interest to be spent with little legislative oversight. [AP, June 14, 1999]

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DELAWARE

Total: $774.8 million; 1st paymt $9.5 million; 2nd paymt $25.4 million

• 6/4: Plans to spend the state's cut of the national tobacco settlement were approved Thursday by the Joint Finance Committee. Included in the $26.7 million is $5 million Gov. Ruth Ann Minner sought to implement the recommendations of the state's cancer task force.Under state law, the money can only be used for anti-smoking or health-related purposes, including Delaware's "Pill Bill" low-income prescription drug assistance program. [Wilmington News Journal, May 30, 2003]

• 9/12: The Delaware budget for the fiscal year of July 1, 2001 to June 30, 2002 was enacted and included the allocation of $20,366,100 of the tobacco settlement funds for this period. TOBACCO CONTROL PROGRAMS will receive $5.45 million, which is about 63% of the minimum CDC recommended amount. That amount is divided as follows: $4,607,000 for community-based organizations; $131,200 for the Attorney General's office for legal work related to tobacco laws and regulations; $499,000 for enforcement of tobacco laws by the Alcohol Beverage Control Commission; and $217,700 for a School Health Coordinator for statewide training, health promotion programs and life skills training in the schools. In addition, $5,150,400 was allocated for the PRESCRIPTION DRUG PROGRAM FOR ELDERS, as well as $1,485,000 for SSI & MEDICAID COVERAGE FOR ELDERS & PERSONS ON DISABILITY who would otherwise have lost benefits due to unearned income. Other settlement funds were allocated for a variety f health-related programs, including for diabetes, chronic disease, a heart defibrillation initiative, alcohol and drug treatment programs, breast cancer detection, etc. Congrats to both TOBACCO CONTROL and AGING advocates. [Info from budget document and American Lung Association of Delaware, September 12, 2001]

• On September 27th, the Delaware Health Fund Advisory Committee received a report on how the distribution of tobacco settlement funds is going. The Committee, established by the legislature last year when it allocated the funds, is an oversight committee which also makes recommendations for how the settlement funds should be spent. The Committee heard that $15 million of the $30 million the state has already received is in a strategic reserve fund. Another $7.5 million is being used for PRESCRIPTION DRUGS FOR ELDERS, and the program was described as going very well, with over 70% of those elders who applied for the program being approved. The Committee also heard from the Health Department and the Public Safety Department that the TOBACCO PREVENTION & CESSATION efforts are going well. Other settlement funds are being spent on insurance for the uninsured working poor and for defibrillators. The Committee will meet again on October 26th. [Newszap, September 28, 2000]

• In completing work on the FY'01 budget, the Delaware legislature followed the recommendations of the Delaware Health Fund Task Force and allocated tobacco settlement funds for a variety of purposes. The biggest share, $17.4 million went into a strategic reserve fund, but the rest was appropriated for various health programs. AGING PROGRAMS were major winners, obtaining $7.5 million for PRESCRIPTION DRUGS FOR ELDERS, and $1.5 million for IN-HOME CARE FOR ELDERS under the Medicaid waiver program, meaning these funds should be matched with close to $2 million in federal Medicaid funds. Thus, AGING PROGRAMS should reap about $9 million in settlement funds and $2 million more in matching funds, for a total of about $11 million in FY'01. TOBACCO CONTROL PROGRAMS were allocated $3 million for FY'01, which is less than desired, but a start for a comprehensive tobacco control effort. In addition, $1 million went for insurance for the uninsured, $800,000 went for heart defibrillators, and smaller amounts went for diabetes research, research on orphans disease, and transitional housing for persons with addictions. [National Conference of State Legislatures report, August 1, 2000]

• On August 31st, Gov. Thomas R. Carper signed S.B.G which will create a PRESCRIPTION DRUG PROGRAM FOR LOW-INCOME ELDERS AND DISABLED PERSONS. Under terms of the bill, seniors over the age of 65, who earn less than 200 percent of the federal poverty level ($16,480 for singles and $22,120 for a married couple) or those whose prescription medications exceed 40 percent of their income will be able to be covered. The bipartisan effort to pass the bill came after months of negotiation and discussion which involved the leadership of the Senate and House. Expense for the program will be covered by an appropriation of $500,000 from the Department of Health and Social Services. The remainder of the first year operating cost is estimated to be $2.7 million. Second year expenses are estimated at $5.1 million. Money to fund the program will be taken from the state share of tobacco settlement money, estimated to be nearly $725 million over the next 25 years. [Delaware State News 9/1/99]

• On June 30th,the Governor signed, SB 8 (with amendments) and HB 180 to set up the process for the state to handle its settlement funds. The bill specifies that all the settlement funds shall go into a newly-created Delaware Health Fund from which money can be appropriated by the legislature each year for health-related programs. The bill states that the Delaware Health Fund Advisory Committee shall be established to hold public hearings and develop recommendations on how the funds should be spent and submit such a plan, by November 15th, to the Governor and legislature. The Advisory Committee is to have representatives of the legislature, the Secretary of Health & Social Services (who will chair the group) and public appointees of the Governor and legislative leadership. The bill also specifies that the settlement funds must be expended for any one or more of the following purposes: expanding access to health care and health insurance for uninsured or under-insured persons; making long-term investments in health care infrastructure; "promoting healthy lifestyles, including the PREVENTION AND CESSATION OF THE USE OF TOBACCO, ALCOHOL AND OTHER DRUGS;" promoting preventive care to detect and avoid adverse health conditions, especially those related to cancer and other TOBACCO-RELATED DISEASES; providing funding to the medical community for innovative treatment of costly illnesses; "PROMOTING A PAYMENT ASSISTANCE PROGRAM FOR PRESCRIPTION DRUGS TO DELAWARE'S LOW INCOME SENIOR AND DISABLED CITIZENS;" promoting a payment assistance program to persons who suffer from debilitating chronic illnesses; and/or such other health-related purposes as the legislature deems appropriate. Thus, the bill provides broad guidance for how the settlement funds should be spent and provides a solid basis for funding for TOBACCO CONTROL AND FOR AGING PROGRAMS, but with no guarantees and with the need to fight each year for an allocation. However, it does provide that settlement funds shall not be used to replace other funding, and it specifies that the settlement funds have to remain in the Delaware Health Fund if not spent in a given year. While work remains to be done in coming years, this is a very nice victory for both AGING and TOBACCO CONTROL ADVOCATES. [TCSG sources and SB 8, as amended. July 14, 1999]

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DISTRICT OF COLUMBIA

Total: $1.2 billion; 1st paymt $14.6 million; 2nd paymt $38.9 million

• 5/9: The council voted to put $10 million of the city's share of the national tobacco settlement into a trust fund. That's less than what several council members favored but an increase over the mayor's proposed budget, which included no money for the trust fund. [The Washington Post, May 8, 2002]

• On December 15th, the Congressional committees which oversee the budget of the District of Columbia said that the District could spend $123 million from its rainy day reserve funds in order to avoid major cuts in services, including jobs, police and fire protection, library services, health programs and public works projects. However, the Congressional committees said that the entire $60 million in tobacco settlement funds the District will receive this year must go into the reserve fund. The Mayor and D.C. Council had wanted to divide the settlement funds between the reserve fund and health and educational programs. It is not clear from the news article, but it appears that this means that the settlement funds this year will go entirely to cover existing program expenses. It is also possible that next year the settlement funds might have to be spent on a restructuring of D.C. General Hospital unless other funds can be found for that purpose. [Washington Post, December 16, 2000]

• On June 6th, Mayor Anthony Williams and the D.C. Council agreed on how to split the tobacco settlement funds. Under the agreement, about half the payments would be spent on health and education programs, and the other half would be invested in a new endowment fund which the Council hopes will grow to $2.5 billion by 2030. The specific programs which would get funding this year will be dealt with later by the Mayor and Council, but among the things the Mayor has said he wants funded are: health coverage for the uninsured, ANTI-TOBACCO PROGRAMS, neighborhood doctor's offices in poor neighborhoods, voice mail for D.C. teachers, and other education programs. The issue of whether to sell bonds backed by settlement payments in return for a large up-front payment is still unsettled. Many health advocates were disappointed by the agreement, wanting more funds spent now. The Mayor is pushing for more community involvement in the planning process for spending the settlement funds, and the Council may be more amenable to that now than they were earlier. [Washington Post, June 7, 2000]

• On April 6th, Mayor Anthony Williams proposed that the District sell bonds backed by the settlement funds in order to obtain about $645 million up-front rather than waiting for the annual settlement payments. The District is scheduled to receive about $1.2 billion over the next 25 years. The Mayor proposed that the funds received from sale of the bonds be invested, but that about $73 million be used next year to reduce the District's debt costs, and that about $50 million annually in subsequent years be used for this purpose. He also proposed that the $73 million that would otherwise be used to reduce debt costs be used to pay for the following programs: about $11.3 million for ANTI-TOBACCO PROGRAMS; and the rest to pay for some of the education, health and family initiatives in the Mayor's 2001 budget, such as insurance for immigrant children, school computers, and SENIOR CITIZENS HEALTH CENTERS. After 2001, the money would be distributed based on recommendations from a public-private commission and the mayor and City Council. Also, at least 10% of the money would be in an income-producing community endowment. The Mayor's plan received a mixed reception from city councilors and tobacco control groups, with ACS saying it sounded like a good start, and with the D.C. Coalition on the Tobacco Settlement, representing 100 organizations, said it worried that the payments from the bond sales might tempt D.C. officials to spend the money in a willy-nilly manner given the city's history of raiding funds. The Mayor's plan must be approved by the City Council, the financial control board and Congress before it would go into effect. [Washington Post, April 7, 2000]

• Mayor Anthony Williams and D.C. Council members tentatively agreed on December 14th on a plan to pay for $9.9 million in bonuses to thousands of unionized city employees, lamenting last week's rhetorical rumble over the issue, they called a truce. The compromise put forward by Williams involves borrowing money from the city's share of the tobacco settlement, using interest income on accounts held by the DC financial control board and reallocating city agency funds. The money will be used to pay $1,700 bonuses to 5,807 unionized DC employees no later than Monday. The quick turn around is a "reward" for the employees giving up pay increases during the city's recent financial crisis. [Washington Post 12/14/99]

FLORIDA

Total: over $13 billion; state has received $1.1 billion already; subsequent payments are approximately $450 million/year.

• 6/20: Florida lawmakers have restored $3.5 million to support the Florida Biomedical Research Program, which funds studies into tobacco-related diseases. One day after the state House voted unanimously to restore the program's budget, the Senate voted Thursday to fund the program. The Florida Biomedical Research Program was established in 1999 to fund research aimed at finding better treatments for tobacco-related diseases, including cancer, cardiovascular disease, stroke and pulmonary disease. [Orlando Business Journal, June 20, 2003]

• 5/10: Some local students hope their acting talents will help convince teens around the country to make better choices in life. A dozen young people from Palm Beach County and other parts of South Florida will star in a 30-minute televised drama called Choices in which the characters deal with issues such as drug use, teen pregnancy and prejudice. The show is expected to air this fall on the cable channel Wam! and will move to syndication and classroom television in January, said Tawny Gaines, producer of the show. The program is receiving support from the state. The state Department of Health and Human Services granted Ko-Mar Productions $30,000 in tobacco settlement money to re-edit and distribute a special version of the show to Florida schools. The classroom version will be tamer than the one that airs on TV stations, Gaines said. [Sun Sentinel, May 10, 2002]

• 4/19: An appeals court Wednesday upheld a trial court order keeping a union's health plan out of a landmark lawsuit that produced a record-breaking $145 billion verdict against major cigarette makers. The Southeastern Iron Workers health plan asked to intervene just before the verdict ended a two-year, three-part trial in a lawsuit brought on behalf of sick Florida smokers. Miami-Dade Circuit Judge Robert Kaye turned the union aside, and the 3rd District Court of Appeal issued a one-paragraph order backing him up. Smokers' attorneys are working on the final paperwork for an appeal before the same court on the verdict issued nearly two years ago. The industry tried to use the union's request as justification for moving the case to federal court after the verdict, but a federal judge in Miami sent the case back to state court. The verdict was for punitive damages. Smokers and their survivors still have to seek trials on individual claims for compensatory damages. [Naples Daily News, April 19, 2002]

• 1/17: Use about $136 million initially earmarked for the Lawton Chiles Endowment to help continue a scaled-back youth anti-smoking program and to help fund other health initiatives. Democrats, who want the endowment left untouched so it can grow, were angered by the move. Senate Democratic Leader Tom Rossin of West Palm Beach said the move is born out of desperation caused by years of GOP tax-cutting. It's unconscionable, Rossin said. You're basically using money paid by the tobacco industry to cover the cost of the Republicansā tax breaks. [Sun-Sentinel, Jan. 15, 2002]

• 12/19: The Florida Legislature, with the acquiescence of Governor Jeb Bush, sought to cut Florida's $37.3 million tobacco prevention budget by $14.5 million - nearly 40 percent - despite its success at reducing smoking by 47 percent among middle school students and 30 percent among high school students in just three years. Advocates were able to reduce the cuts to $7.5 million (still too much) and will fight to restore the money during the spring legislative session. [Tobacco Free Kids, Dec. 19, 2001]

• Included in Florida's fiscal year 2002 budget is the appropriation of $545.2 million from the tobacco settlement funds. Florida divides the money from the settlement into 5 categories and have allocated money as follows: $270.1 million for children's services, $143.4 million for family services, $60.9 million for ELDERLY services, $60.4 million for research and prevention, and $10.3 million for administration. The largest amount of money, $141.4 million is appropriated for child protection and permanency. Another $94.5 million is allocated for Kidcare (title XXI and Florida Healthy Kids), $60.9 million for Medicaid services to individuals, $45.6 million for services for developmentally disabled, $39.1 million for a TOBACCO PREVENTION PROGRAM, $30.3 million for PRESCRIPTION DRUGS FOR THE ELDERLY, $26.7 million for home and community based LONG TERM CARE for the ELDERLY, $5.1 million for a tobacco enforcement program, and $4 million for Medicaid LONG TERM CARE. [TCSG source in Florida legislature, July 31, 2001]

• On June 12th, Florida officials lifted a four-year ban on the purchase of tobacco stocks for the state government's $100 billion pension fund. Florida, which in 1997 ordered the sell-off of $825 million in tobacco stocks, becomes the latest and largest state to rescind restrictions on the historically profitable but controversial equities. Following a unanimous vote by a panel overseeing Florida's pension investments, Florida Governor Jeb Bush said he and the two other panel members believed that they should not tie the hands of portfolio managers who guide the investments of the pension fund on behalf of more than 750,000 current and former state workers. [Reuters, June 12, 2001]

• On May 4, 2001, the Florida Legislative Session came to a close. Although this was one of the most contentious sessions in Florida's history, it proved to be a successful one for TOBACCO CONTROL advocates. Pending the Governor's approval, Florida lawmakers secured $44.2 million in the 2001-2001 appropriations bill to continue the funding for Florida's Tobacco Control program. This amount allows the comprehensive youth tobacco program to maintain each of its five components: Education and Training, Youth Programming and Community Partnerships, Marketing and Communications, Evaluation and Research, and Enforcement. Part of the tobacco control victory included defeating efforts to eliminate $5.1 million for the enforcement component of the program. [TCSG source, May 22, 2001]

• On June 8th, Governor Jeb Bush (R) signed a bill which allocates the settlement funds for the coming fiscal year. Under the bill, 33.5% of the interest from the Lawton Chiles Fund will go for bio-medical research, 50% will go for children's services, and 16.5% will go for SENIOR SERVICES. Dollar figures were not available in this news report; more later. This is a change from the prior year (see below) and Bush opposed this new allocation formula. Therefore, he said he has negotiated an agreement with key legislators, led by Representative Mike Fasano (R), to change the formula next year to say that just 8.8% of the interest will go for bio-medical research, and the remaining 91.2% will go for health care for children, ELDERS, and disabled persons. Bush also signed a bill which will establish a PRESCRIPTION DRUG PROGRAM FOR LOW-INCOME ELDERS; eligibility requirements for the program will be developed by the Agency for Health Care Administration and the Department of Elder Affairs. [Miami Herald, June 9, 2000]

• On May 15th, it was reported that ELDER ADVOCATES were both outraged and surprised that only 16.7% of the settlement funds coming from the Lawton Chiles Endowment Fund were to go for ELDERLY PROGRAMS. AARP and other aging groups apparently were caught off-guard when the legislature adopted a new spending formula that allocated 50% of the Chiles Fund earnings for children's programs, 33.3% for bio-medical research, and 16.7% for AGING PROGRAMS. The Chiles Fund had originally been touted as being intended for children's and aging programs, with a 50-50 split of the funds. But, when the enabling legislation was adopted last year, it included bio-medical research as a category that could be funded. This year, Senator Jim King (R), the legislator responsible for putting bio-medical research in the enabling legislation and who represents a district which has the Mayo Clinic in it, pushed for the new funding formula; he worked out a compromise with Lawton Chiles' widow, and that was what was adopted. Mrs. Chiles said she would have spent all the money on children's services, but this was a fair compromise. The legislation passed unanimously. The state Department of Elder Affairs spokesperson, Gary Gershowitz, said this is a win-win situation for everybody. AARP said they had not heard about the bill until a week ago and were debating whether to ask the governor to veto the bill. Rep. Michael Frasano (R) said he was surprised by AARP's reaction and said that the only elderly advocates he saw at the hearings on the bill were from the Heart. Lung and Cancer associations, and they all favored the bill. The new spending formula doesn't take effect until the fiscal year 2001-2002, said Frasano, and it can be changed next session. The governor is expected to sign the bill next week, according to King. It is expected that the Chiles Endowment will generate about $120 million annually in income which can be spent; half of that would be $60 million, or about $10 million more than the entire budget for the Community Care for the Elderly program, which is currently the state's biggest in-home care program for the elderly; further, these state settlement funds can often be matched with federal dollars which more than double the funding available. [St. Petersburg Times, May 15, 2000]

• On May 9th, Governor Jeb Bush (R) signed legislation which was passed the legislature unanimously on May 5th to protect the tobacco industry from possible high punitive damages that may be awarded in the Engle trial. The legislation will cap the amount of any bond that has to be bought to file an appeal of the lawsuit; the cap would be $100 million or 10% of the companies' net worth, whichever is lower. In addition, the legislation would establish a mechanism for selling off part of the state's future entitlement to settlement payments (securitization), but would require the full legislature to approve selling the entitlement to funds. Bush signed the bill, but refused to comment on it. [AP, May 9 and 5, 2000]

• On March 31st, ANTI-TOBACCO GROUPS urged the legislature to spend $60 milllion annually on TOBACCO PREVENTION & CESSATION PROGRAMS, rather than the $44 million the Senate and House have proposed to spend. [USA Today, March 31, 2000]

• Governor Jeb Bush (R) announced his budget on January 19th and his proposals for more funding for "vulnerable populations," including children, ELDERS and developmentally disabled persons on Jan. 12th. Bush said that he will be asking for substantial new funding for these groups, including the following: an additional $134 million for the child welfare system; $154 million for the KidCare health insurance program for children and families; $60 million for dental care for children in the KidCare program; $136 million for community-based programs for developmentally disabled persons; $12.1 million for COMMUNITY CARE FOR THE ELDERLY, to eliminate waiting lists for in-home services, estimated at 6,214 senior citizens; and an undisclosed amount of funds amounting to a 10% increase in the CARES program (Comprehensive Assessment, Review and Evaluation for Long-Term Care Services) to assist in finding community-based care for ELDERS to avoid nursing home placement. It is not clear if these funds are to come from the settlement funds, but it is likely, since the Lawton Chiles Endowment for Children and the Elderly was set up with settlement funds last year for this purpose. There were no press releases on the governor's web site concerning the use of tobacco settlement funds nor anything about TOBACCO PREVENTION & CESSATION funding. [Governor Bush Press Releases, Jan. 12 & 19, 2000]

• On February 1st, Phase II settlement checks were mailed to tobacco growers and quota holders in the state. While the number of persons getting checks was not stated, it was announced that over $3.8 million was being distributed to over 96% of the persons who applied for the funds. A second round of payments will go out on April 17th to persons who were late in getting applications in or had problems with the forms. Florida expects to distribute about $58 million on Phase II funds in the next 12 years. [Business Wire, Feb. 1, 2000]

• As noted below, lawmakers approved only $45 million for tobacco control for FY'2000, versus $70 million last year. The $45 million is being split up as follows: $5 million set aside for enforcing the law against underage tobacco sales; $18 million for the "TRUTH" campaign involving youth; $7.35 million for community partnerships; $6.25 for anti-smoking education school programs; and $2.35 million for evaluation of the programs. It is unclear what the remainder of the funds will go for at this time. [AP in Miami Herald, August 8, 1999]

• See Highlights above for May 13th which provide info on Florida becoming the first state in the nation to appropriate tobacco settlement funds for IN-HOME SERVICES FOR THE ELDERLY. Governor Jeb Bush signed legislation to create the Lawton Chiles Endowment for Children and Elders; this fund, over the next four years, will receive at least $1.7 billion in settlement funds, with the interest to be available for appropriation for programs for ELDERS, children and bio-medical research. In FY'2000, $17.3 million of settlement funds will be available for AGING programs to keep elders in their own homes rather than in nursing homes. [TCSG sources in Florida, May 17, 1999 and Gov. Jeb Bush press release & AP report May 13, 1999]

• On April 29th, the legislature passed a bill that is intended to halt any lawsuit filed by individuals claiming a share of the settlement funds. This bill is directed at a lawsuit filed earlier in April (see note below) by Sixto Oliva in which he claimed a portion of the settlement funds should go directly to Medicaid recipients. If this bill is signed by the Governor, as expected, its validity as applies to Oliva's lawsuit will almost certainly be challenged, since the suit has already been filed. According to news reports, this same bill "also clarifies that money from the [tobacco] SETTLEMENT is only for state-sponsored health PROGRAMS FOR children and the ELDERLY." More later on this. [Orlando Sentinel April 30, 1999]

• Sixto Oliva has filed a lawsuit claiming that Florida law entitles him and other Medicaid recipients to a share of the settlement funds, based on the wording of the law which assisted Florida in pursuing its Medicaid suit against the tobacco industry. This has prompted the legislature to swiftly take up the matter and see if they can amend the law to knock out Mr. Oliva's lawsuit, since it could threaten the state's claim on a sizable share of the settlement funds. [AP April 21, 1999]

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GEORGIA

Total: $4.8 billion; 1st paymt $58.9 million; 2nd paymt $157.4 million

• 2/28: Georgia wisely chose to dedicate two-thirds of the state's tobacco settlement funds to important health care purposes, and to invest -- for real tangible returns -- the remaining one-third toward the economic health of Georgia's rural and underdeveloped counties. OneGeorgia uses that one-third share and helps when other resources have first been tapped and a final boost is needed to make the jobs happen. OneGeorgia has directly benefited 82 of the state's most economically depressed counties, and, in only two years, has positively affected three-fourths of the state's poorest counties. It would be a major mistake to cut this successful program, with so much potential for even greater impact. As the economic development professionals who are working every day to bring jobs to Georgians, we support continued funding of OneGeorgia at its current level. This groundbreaking initiative is giving vital assistance to Georgia communities with the potential to grow economically, with just a little help. [Feb. 26, 2003, Atlanta Journal-Constitution]

• 10/28: Anti-tobacco advocates have no problem with those uses. The frowns arise when the funding also goes to economic development for any county that applies for grants. "The economic development was supposed to be stimulus for communities transitioning from tobacco farming, not for every county," Unterman said. Some of the funding is going to counties without tobacco farming for uses such as sewer projects, Unterman said Unterman said she wonders why cancer patients throughout Georgia should have to leave the state for specialized treatment when the tobacco settlement funds could have paid for offering those advanced treatments here. [Gwinnett Daily Post, Oct. 27, 2002]

• 4/2: A passenger-rail link to Middle Georgia got another boost Monday in the state Capitol, as the Senate's budget committee agreed with Sen. Robert Brown's request to provide $12 million in state funds for the project. The $12 million would come from Georgia's portion of the settlement between states and tobacco companies. The state gets about $173 million a year from the tobacco settlement. Using tobacco-settlement money also makes sense, Brown said, because Brown & Williamson Tobacco Corp. contributed to the class-action settlement. B&W is one of the largest employers in Macon. Georgia has regularly used portions of its tobacco-settlement money to promote economic development in rural parts of the state, Brown said. [Macon Telegraph, April 2, 2002]

• 2/4: The Georgia Department of Human Services will award a $1.5 million contract for the development of a new statewide cancer awareness and education campaign. The department has opened a bid for the contract, which will be funded bythe Georgia Cancer Coalition with tobacco lawsuit settlement money, and is seeking a communications firm. The coalition, a public-private partnership formed last year by Gov. Roy Barnes, will use as much as $400 million of the state's tobacco settlement funds to create a statewide system aimed at reducing cancer deaths. [Atlanta Business Chronicle, Feb. 4, 2002]

• 12/6: A state authority set up to spend part of Georgia's tobacco settlement announced Monday it will send $8 million in grants and loans to 20 communities, for everything from an interstate access road to riverfront property. Together, the projects eventually could create or retain as many as 880 jobs, according to OneGeorgia, an authority chaired by Gov. Roy Barnes. OneGeorgia, vice-chaired by Lt. Gov. Mark Taylor of Albany, was created last year to provide economic assistance to rural communities wanting to develop local business and tourism opportunities. The authority can use as much as $1.6 billion of the state's $4.8 billion tobacco settlement. Monday's announcement comes as Georgia faces its worst economic downturn since the early 1990s. [Atlanta Journal-Constitution, Dec. 5, 2001]

• At an annual meeting during the week of June 4th, the State's Tobacco Community Development Board voted to pay all but about $780,000 of the $21.3 million it expects to receive from the settlement this year to approximately 7,500 Georgia growers who are losing income because of declining cigarette sales. The $780,000 will be used to run the program. Anti-smoking activists who attended the Atlanta meeting objected to sharing the settlement money with growers, but farm supporters argued that the impact of dwindling tobacco sales has hurt the rural economy. Tobacco is grown under a federal program that regulates production and guarantees minimum prices to growers. The amount each farmer can produce is known as a "quota." With the decline in cigarette sales, the government has cut the quota by nearly 50 percent over the past three years. While the farmers say that it is no windfall, it may help them survive. [Associated Press, June 8, 2001]

• As of March 30th, with the legislature finished with its work for the year on March 21st, Georgia SENIORS had scored major victories in obtaining increased funding for a wide variety of programs, as follows: $6,502,923 for the Community Care Services Program; $4,000,000 for the non-Medicaid home and community based services program; $434,455 for LEGAL SERVICES to the elderly including $150,00 for the Senior Legal Hotline; $112,014 for 7 additional surveyors for the Office of Regulatory Services for investigating nursing home complaints; $261,013 for Adult Protective Services; $96,000 for a training program for nursing facility staff that care for residents with dementia; $250,000 for an education effort concerning osteoporosis; and $250,000 to draw down federal funds for the National Family Caregiver Support program. These are enhancements to the base budget. It is not totally clear how much of these increases are paid for with tobacco settlement funds, but some of them definitely are. The Georgia Council on AGING and related advocates did a fantastic job again this year in making a strong case with both the governor and legislature for increasing a variety of IN-HOME CARE PROGRAMS FOR ELDERS. Plus, funding for TOBACCO PREVENTION AND CESSATION PROGRAMS totaled over $5 milion, with $4.9 million for tobacco prevention and cessation programs and more for a variety of health screening programs related to diseases caused by tobacco, such as cancer. [TCSG sources in Georgia, March 30, 2001]

• On November 16th, a news report stated that the lawsuit brought by Georgia Medicaid recipients to obtain a share of the tobacco settlement funds had been dismissed recently. The suit, like ones filed in a number of other states, claimed that any settlement funds over and above what the state actually spent on tobacco related health care costs of recipients should go to the recipients. This case was dismissed, as have all other such cases so far, based on a sovereign immunity defense that says the state cannot be sued by people seeking money damages. [Hartford (CT) Advocate, November 16, 2000]

• On August 17th, the Georgia Department of Human Resources (DHR) and the Coalition for a Healthy & Responsible Georgia (CHARGe) issued a comprehensive plan for TOBACCO PREVENTION AND CESSATION services in the state. The plan is a set of recommendations for how to spend the $15.8 million of settlement funds allocated for this purpose earlier this year by the legislature. Under the plan, the following would be done: over $4.5 million would go to the 19 public health districts in the state for local tobacco prevention programs; almost $2.5 million for statewide organizations to analyze existing efforts, educate community organizations and help build local coalitions; more than $1 million for training and technical assistance for health district and community programs; about $4.3 million for a media campaign encouraging a tobacco free lifestyle; and about $1.7 million to monitor tobacco-related behavior and policies statewide and to assess tobacco prevention efforts at the state and local levels. The plan was hailed as the first real effort by the state to attack the tobacco problem, which kills over 10,000 Georgians annually and causes disabilities among thousands more. The plan is to be implemented over the coming year. [Business Wire release from DHR, August 17, 2000]

• When the legislature finished its work on the state budget in March, as noted below, they had included $15.8 million of settlement funds for TOBACCO PREVENTION & CESSATION PROGRAMS. We can now confirm that AGING PROGRAMS also did very well. As a result of strong elder rights advocacy, the following new funding was obtained: $4.2 million in settlement funds was allocated for the COMMUNITY CARE SERVICES PROGRAM FOR ELDERS UNDER THE MEDICAID WAIVER PROGRAM, with an additional $5.9 million in federal matching funds for this program for a total of $10.1 million; $3.8 million for NON-MEDICAID HOME & COMMUNITY BASED SERVICES FOR ELDERS. Thus, $8 million in settlement funds was allocated for AGING programs, plus the $5.9 million in federal matching funds for an overall total of $13.9 million. In addition, aging advocates feel that the availability of settlement funds for Home & Community Based Services allowed legislators to provide additional general revenues funds for other AGING programs, including expansion funds for the Long Term Care Ombudsman Program, almost $1 million for Adult Protective Services, and almost $1 million more for new adult Medicaid eligibility workers. Thus, AGING programs garnered over $17 million in combined settlement, state and federal matching funds due to the advocacy for settlement funds. Both AGING and TOBACCO CONTROL ADVOCATES had to work hard for the funding, but they were successful. [TCSG sources in Georgia, May 23, 2000]

• Approximately 10,000 Georgia farmers are thought to be eligible for Phase II settlement payments. The state will shortly certify the names of those who will receive the first payments -- expected to be about 60% of those eligible -- and they will get checks late in December. Others who might be eligible either have not responded or their claims are still being examined. Chase Manhattan Bank is handling the payments for Georgia and the other 13 tobacco states, and has told GA that it will net about $22.3 million this year in Phase II money, after the banks adds interest of $262,000 and deducts an administrative fee of $119,098 -- a fee that has Governor Barnes angry. [Lexington Herald-Leader, Dec. 3, 1999]

• SB 241 was sent to the Governor on March 29th to create a massive new Department of Community Health (DCH) within state government. Among its duties, the DCH will have authority and responsibility to oversee the expenditure of "any funds appropriated to the department including, without being limited to, funds received by the state pursuant to the settlement of the lawsuit filed by the state against certain tobacco companies." This appears to give DCH the lead role in receiving and expending TOBACCO SETTLEMENT funds. However, thus far the Governor has not made a specific proposal for how the settlement funds should be used, although he has said vaguely that they should go for health care. Further, the legislature will have the responsibility for appropriating the settlement funds, and that has not yet been done. Further, the DCH will have responsibility for running a wide array of current state health programs, including the Medicaid agency. Thus, while it is possible the Governor and legislature intend DCH to be the lead agency for the oversight and allocation of the settlement funds, SB 241 gives no indication of how the funds might be spent. [Georgia legislature web site & SB 241]

HAWAII

Total: $1.2 billion; 1st paymt $14.4 million; 2nd paymt $38.6 million

• 5/3: These are just a few samples of statewide community efforts to "Start.Living.Healthy" -- a message directed to residents via television and radio. The state Health Department is spending most of its tobacco settlement money on the campaign, giving 26 communities $5, 000 each to develop plans to deal with major health problems. Another $19, 000 is allocated per community to carry out the approved plans. The Healthy Hawaii Initiative's broad mission is to create healthier families by preventing smoking and obesity and encouraging better eating habits and exercise, said Virginia Pressler, DOH deputy director for health resources administration. [Honolulu Star-Bulletin, May 2, 2002]

• 3/30: About 1,160 Hawaii residents die each year from smoking, a figure that eventually could rise to 18,000 because of the high percentage of isle children who smoke, according to the Campaign for Tobacco-Free Kids. The nonprofit group reports that 19.7 percent of adults in the islands smoke, below the national average of 23.3 percent, and 24.5 percent of Hawaii high school students smoke, vs. 28 percent nationally. About 2,700 Hawaii kids under age 18 become daily smokers each year, it says. The group said if the current smoking trend among children continues, the annual tobacco death toll will continue to rise. National health groups yesterday released two reports on tobacco use in Hawaii and other states, stressing smoking prevention as "one of the smartest and most fiscally responsible investments that governors and state legislators across the country can make." [Honolulu Star Bulletin, March 28, 2002]

• 11/21: State legislators apparently believe funding a medical school is a healthier use of tobacco settlement funds than fluoridating Lanai's drinking water to prevent tooth decay, according to their recent actions. The Legislature approved $150 million from the tobacco funds for the University of Hawaii's planned medical school complex at Kakaako. But 46 of the 76 state lawmakers do not feel the fund should be used to support fluoridation. In a letter to state Health Director Bruce Anderson, they wrote: "We believe that those moneys would be better spent on compensating dentists who serve children on Lanai or to implement a dental sealant program in the schools." They said the law governing use of tobacco settlement money appropriated to the Health Department "was not intended to include fluoridation of water supplies for 'health promotion and disease prevention programs' or 'prevention oriented public health programs." Of Hawaii's $1.3 billion share of the national tobacco settlement, 35 percent of the money is earmarked to the Health Department for the Children's Health Insurance Program and other health-related activities. [Honolulu Star-Bulletin, Nov. 19, 2007]

• 11/2: Construction should begin on the University of Hawaii's new Health and Wellness Center in Kakaako within a year now that the Legislature has approved use of tobacco funds to build it, said UH President Evan Dobelle. The medical complex will include the John A. Burns School of Medicine, the Cancer Research Center of Hawaii and a new Pacific Biomedical Research Center. Once the medical school has been relocated, the vacated building on the Manoa campus will be refurbished into a biomedical sciences center. Dobelle had proposed the $300 million center as a way to stimulate the state's sagging economy during the special session of the legislature. The state will sell $150 million in revenue bonds, to be repaid by tobacco funds, to cover half the costs, and the university will match the $150 million with private fund-raising, Dobelle said. [Honolulu Star-Bulletin, Nov. 1, 2001]

• On August 22nd, Governor Ben Cayetano awarded $650,000 to 14 different groups from the Hawaii Tobacco Prevention and Control Trust Fund. "Hawaii is one of only a handful of states nationally to earmark a significant portion of the tobacco settlement money for public health efforts," Cayetano said. "These groups will receive the support needed to discourage tobacco use in the islands and to teach Hawaii residents how to lead healthy, smoke-free lives." The trust fund was set up in 1999 to use 60 percent of the tobacco settlement money. [KITV Ch. 4, August 23, 2001]

• On July 7th, Governor Benjamin Cayetano signed legislation passedearlier by the legislature which allocates the settlement funds. The law states that 25% of the settlement funds will go to TOBACCO PREVENTION AND CESSATION PROGRAMS, making this one of the highest percentages in the nation allocated by a state to tobacco control programs. This law means that as much as $300 million over the next 25 years could go to tobacco control programs. The first payment to the state is for about $14.4 million, so about $3.6 million should be available for tobacco control programs out of that payment, and about $10 to $12 million per year in subsequent years. The Tobacco-Free Hawaii Coalition played a major role in achieving this victory. [CTFK press release, July 7, 1999 and TCSG sources.]

• On May 4th, the tobacco settlement package of bills were passed and sent to the Governor. The $1.3 billion the state is to receive over the next 25 years was divided up as follows: 40% for the state "rainy day" emergency fund; 35% to the Health Department for health-related programs, including the children's health insurance program; and 25% for ANTI-SMOKING PROGRAMS. The appropriation for anti-smoking programs is a major victory for the tobacco control/public health movement, in as much as it is a much higher percentage than most states have passed and is consistent with CDC estimates of the funding needed for a comprehensive TOBACCO PREVENTION PROGRAM. The Governor is expected to sign this. [Honolulu Star Bulletin April 5, 1999]

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IDAHO

Total: $711.7 million; 1st paymt $8.7 million; 2nd paymt 23.3 million

• 6/20: Idaho will receive $300,000 as part of a $160 million national settlement reached Wednesday with tobacco companies, officials said. The bulk of the money will come from Brown & Williamson, the nation's third largest tobacco manufacturer, state Attorney General Lawrence Wasden said. The major tobacco companies agreed in 1998 to pay $206 billion to the states to settle health claims over cigarette smoking and other tobacco use. [The Spokesman-Review, June 20, 2003]

• 8/30: Using Idahos Millennium Fund to patch this years state budget would sacrifice childrens health and end up costing more in the long run anyway, a group of health-care professionals and advocates told lawmakers Monday. The fund, filled by the national tobacco settlement, was set up to fight tobacco use in the state. The Legislature has already diverted close to $30 million to shore up the fiscal year 2002 and 2003 budgets, and Gov. Dirk Kempthorne said this summer he would tap this and other state funds if the state cant meet budget by the end of June 2003. But Mary MacConnell, of Idahos branch of the American Heart Association and chairwoman of the Coalition for a Healthy Idaho, said tobacco-related costs in the states Medicaid system already run at about $65 million. "And that will continue to grow unless we stop children from smoking," she said. The group tried to get that message across to a legislative committee charged with evaluating the programs the fund pays for. [Idaho Statesman, August 27, 2002]

• 2/26: A new law opening up the state's multi-million dollar tobacco prevention fund to counties could save local taxpayers almost $300,000 next year. State legislators passed a law effective July 2000 that allows counties to raid the state's tobacco prevention fund to offset the growing cost of treating patients suffering from smoking-related illness. Under current law counties are responsible for the tobacco-related medical bills of indigent patients up to $10,000. The new law reduces that deductible by one half, for "tobacco-related cancer and respiratory disease treatment," according to the state's Catastrophic Health Care Cost Program which oversees indigent payments. The county calculated local payments for patients suffering tobacco-related illness to come up with the estimate. Three patients (totaling approximately $15,000) will be submitted to the CHCCP in March, said county Welfare Director Marla Lewis, with as many as 57 possible patients to be submitted along with a doctor's affidavit saying tobacco was a contributing factor. [Coeur d' Alene Press, Feb. 26, 2002]

• 1/25: Rep. Jim Clark, R-Hayden, introduced legislation on Thursday to limit Idaho's tobacco settlement money from being spent for anything but tobacco- or substance abuse-related cessation, prevention or disease treatment. Rep. Kris Ellis, R-Coeur d'Alene, had earlier introduced a concurrent resolution backed by a group of legislators and anti-smoking groups to direct the money to nine priority areas identified by the Centers for Disease Control as key to reducing smoking. Clark said his bill is more specific and has more teeth because it would be a state law rather than a legislative resolution. "Mine just puts up fencelines, saying that it can only be used for tobacco-related issues," he said. Advocates of Ellis' resolution, HCR 39, were taken by surprise by Clark's bill. "We like his focus on health, especially tobacco, but I haven't had a chance to look at the whole thing," said Mary MacConnell, lobbyist for the American Heart Association. [The Spokesman Review, Jan. 25, 2002]

• 1/18: Coeur d'Alene Rep. Kris Ellis, along with five House co-sponsors, introduced a resolution Wednesday to keep Idaho from spending its tobacco settlement funds on anything but tobacco-related problems. "Idaho spends around $25 million in Medicaid alone for tobacco-related diseases," Ellis told the House State Affairs Committee. "I think this makes a good case for putting some money into these things." The resolution wouldn't head off Gov. Dirk Kempthorne's plan to divert the $18 million April tobacco settlement payment to help balance the budget. It deals only with how to spend annual earnings on the money that has been deposited into the Millennium Fund, the trust fund Idaho set up for its settlement money. [The Spokesman Review, Jan. 17, 2002]

• 12/27: As Idaho struggles to balance its budget in the face of major revenue shortfalls, millions of dollars in tobacco settlement money are piling up in a largely untouched trust fund. Idaho now has $46.3 million in its "Millennium Fund," with another $8 million payment expected in January and an additional $15 million in April. But under a plan proposed by Gov. Dirk Kempthorne and approved by lawmakers in 2000, the money goes into a permanent fund, from which only 5 percent a year is spent. This year, that meant about $2.6 million for various health, substance abuse and education programs, and next year, it will be between $3.5 million and $4 million. This year, tobacco funds went to anti-smoking campaigns at the Department of Health and Welfare, quit-smoking programs at public health districts, and youth courts and other programs. [The Spokesman Review, Dec. 26, 2001]

• On January 4th, the special committee charged with helping decide how to spend the settlement funds for the state followed the recommendations of Governor Dirk Kempthorne (R) to extend most of the programs that the legislature authorized about six months ago. These programs include the TOBACCO PREVENTION AND CESSATION initiative. The recommendation calls for $3 million to be allocated for the coming fiscal year starting on July 1, 2001, for TOBACCO CONTROL PROGRAMS; this is $700,000 more than allocated in the current fiscal year. Senator Cecil Ingram (R) concurred with the recommendation for $3 million. One of the other programs currently in operation and likely to be continued uses $735,000 of settlement funds for counties to offset the cost of paying for indigent care for persons with illnesses caused by tobacco; this money would otherwise come from property taxes, so it frees up other tax money by substituting settlement dollars. [Idaho Statesman, January 5, 2001]

• On November 28th, Governor Dirk Kempthorne unveiled a $500,000 media campaign to encourage Idahoans to STOP SMOKING. The media campaign will be paid for with tobacco settlement funds. The ad campaign is part of a larger TOBACCO PREVENTION AND CESSATION PROGRAM being funded with settlement funds. The ads include both hard-hitting ones and humorous ones and are ones developed in other states. The governor said about 500 televised spots will run across the state in coming months. The current tobacco control campaign is funded for just one year and will need to be renewed by the legislature at the end of the current fiscal year. The governor seemed to indicate that he would support further funding. [Idaho Statesman, November 29, 2000]

• On Feb. 14th, Governor Dirk Kempthorne signed his first bill of the 2000 legislative session, creating the Idaho Millennium Fund which will hold the estimated $711 million in settlement funds the state expects to receive over the next 25 years. According to reports, money in the fund has already generated about $2.5 million in interest. The legislation says that about 5% of the fund's proceeds can be spent, but it is up to the legislature to decide how much and on what. Many Democratic legislators and health groups are pushing for spending some of the funds now, particularly on TOBACCO PREVENTION & CESSATION PROGRAMS. [Idaho Statesman, Feb. 15, 2000]

• The legislature passed and on Feb. 8th, Governor Dirk Kempthorne signed into law a bill that will place the anticipated tobacco settlement payments in the budget stabilization or "rainy day" fund. News reports refer only to the $32 million which will constitute the first two payments the state is to receive, so it is not clear if this new law applies to all future settlement payments or just the first two. For funds to be spent out of the stabilization fund requires a two-thirds vote of either the House or the Senate. The vote in favor was overwhelming in both houses of the legislature, although in the House all Democrats, and only two Republicans, voted against the bill. Many Democrats argued that the settlement funds should be appropriated for health care programs targeted at the harm caused by tobacco. Some Republicans said that the money has not arrived yet, and the state should wait until the amount received is actually known. [This would suggest that it is unlikely that the settlement funds will be appropriated this year, although that could always change.] [Moscow-Pullman Daily News 2/9/99]

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ILLINOIS

Total: $9.1 billion; 1st paymt $111.7 million; 2nd paymt $298.4 million

• 9/23: Like many states, Illinois has dedicated only a small part of the tobacco proceeds to fighting tobacco use, a decision activists say is misguided, particularly when tobacco companies seem to be stepping up their advertising to counter anti-smoking campaigns. But Illinois' fiscal crises led Gov. George Ryan and lawmakers to divert even more of the tobacco money to pay for other things, such as prescription drug benefits for seniors. Early on, a big chunk went to pay for a politically popular tax rebate. The legislature chopped the overall anti-tobacco budget from $47 million last fiscal year to $12 million this fiscal year. Complicating the fiscal dilemma for anti-smoking programs is that the tobacco settlement money is paid to the state by cigarette makers only a few times a year. The next installment won't come until December or January. In previous years, the state had enough cash in its main checking account to tide over the anti-smoking programs run by local health departments and other providers until the tobacco money arrived. Officials say they can't afford to do that this year. "This fund has been treated as a piggy bank by the budget makers," said Rep. John Fritchey (D-Chicago), co-chairman of the House Committee on Tobacco Settlement Proceeds. "But it's supposed to pay for these ongoing programs. It was disingenuous to make them think the money was going to come to them uninterrupted and then not pay it." Facing a nearly empty tobacco account, the Illinois Department of Public Health recently sent letters to local health departments and other program providers. The fund was out of money, the letters said, and "payments are being temporarily suspended" for the state-funded Illinois Tobacco-Free Communities Program. [Chicago Tribune, Sept. 21, 2002]

• 7/11: The American Legacy Foundation's campaign to push states to maintain money from the settlement with tobacco companies for anti-smoking efforts comes too late for an Illinois program, which has been scrapped. Newspaper ads from Arnold in Boston are running in nine states including Illinois, Pennsylvania and Michigan, urging lawmakers to increase the amount of money from the Master Settlement Agreement with tobacco companies on anti-tobacco programs. With budgets pinched by the slow economy, legislators have used the settlement to shore up budgets, the American Legacy Foundation argues. The organization claims that states have allocated just 5 percent of the $205 billion in funds from the 1998 settlement between tobacco companies and state attorneys general to anti-tobacco programs. In Illinois, a fiscal crunch has led the state to divert funding that had been going to an anti-smoking campaign, spelling the end of a campaign created by high school students in the state along with Hadrian's Wall in Chicago. Tom Schafer, communications chief for the Illinois program, said the Legacy Foundation's funding effort is too little, too late. "They should have done it back in May," he said. The last ads from Hadrian's Wall are set to break later this month. Those spots, one of which runs for two minutes, depict the students realizing they've been duped by the tobacco executive who sponsors All Smoke High and rising up in revolt. [Ad Week, July 2002]

• 6/27: The legislature will allocate $5 million to the Illinois Department of Public Health during the next fiscal year for anti-smoking programs, down from $44 million. So Kane County will receive $139,314 for tobacco prevention beginning July 1, down about $250,000 from the year before, or about 64 percent, England said. England said she is unsure exactly what will be cut, but the Health Department obviously will be unable to provide the same service it has. Programs in schools will take priority, she said. England said she remains optimistic restaurants will continue to go smoke free, though. She said health department officials have been confident of that since they took a survey three years ago that showed 70 percent of smokers support smoke-free public environments, and actually choose the no-smoking sections of restaurants. [Surburban Chigaco News, June 26, 2002]

• 5/3: A judge on Thursday ruled against an effort by the Illinois attorney general to dismiss a lawsuit filed by attorneys seeking $900 million in fees from a settlement with the tobacco industry. Judge James Henry said the move was premature and that the state could pursue the matter after both sides have had a chance to explore the factual issues of the case. He also suggested the two sides settle their dispute outside court. The dispute centers on how much money the state must pay in legal fees from a $9 billion settlement with the tobacco industry that is to be paid out over 25 years. [Associated Press, May 2, 2002]

• 4/25: Local health officials fear state lawmakers might hijack money earmarked for anti-smoking campaigns to help make up for a looming $1 billion budget shortfall. Under a nationwide settlement with tobacco companies, Illinois will receive $300 million annually for the next 25 years. Portions of that annual windfall are sent to health departments in each county in Illinois. For the past two years, Will County has received $500,000 payments to provide local tobacco prevention programs. "And now even that money may be in jeopardy," Will County Health Department director James Zelko told a county committee Tuesday. [Daily Southtown, April 24, 2002]

• 1/23: Key lawmakers Monday called on lawyers to release $60 million in tobacco settlement money they have tied up in court, a concession the legislators say could help the state bridge its budget gap and leverage federal money for the poor. The lawyers, hired by Illinois Atty. Gen. Jim Ryan to win damages from tobacco firms, contend the state owes them more than $900 million in fees and have filed a lien blocking the $60 million in tobacco money from flowing to state coffers while they battle to get the rest. But legislators say that money, if freed up, would allow Gov. George Ryan to roll back a big portion of cuts he recently announced in health-care services for low-income residents while also capturing federal matching funds to further alleviate the cash crunch. "Every available dollar not being spent should be used to acquire federal money for Medicaid," said Rep. Jeffrey Schoenberg (D-Evanston), a House Appropriations Committee chairman. "It's obscene that this money isn't going to stop hospital closures," said Sen. Kirk Dillard (R-Hinsdale), sponsor of a pending measure that seeks to invalidate the attorneys' claim for more of the tobacco money than they've already been awarded. [Chicago Tribune, Jan. 22, 2002]

• 1/18: More than $80,000 is flowing into the Springfield Community Health Initiative's coffers to help low-income and minority smokers quit. The funds come from the tobacco settlement monies that are coming to Illinois, the initiative's president and chief executive officer, John Frana, said Wednesday. "This is money that is intended for non-health-department, non-profit organizations to use for targeted smoking-cessation programs," Frana said. The money is being funneled through the Illinois Department of Public Health. Frana said the agency plans to work with the American Lung Association of Illinois and the Capitol Community Health Center to set up stop-smoking classes. The first classes are planned for as early as March 1. "In all, we hope to enroll 400 people in smoking-cessation classes," Frana said. In addition to classes and educational material, the initiative will help pay for nicotine patches for enrollees and for nicotine medication, if needed. [Springfield State Journal-Register, Jan. 17, 2002]

• 12/21: Illinois House Speaker Michael Madigan has proposed taking away $11 million in funding for youth-oriented anti-tobacco programs and using the money - part of Illinois' take from the national tobacco settlement - to ease the state's budget woes. If that happens, it probably would mean the end of those memorable television commercials featuring students at All Smoke High, the fictional school where, as the ads say, "everybody's gotta smoke." The broadcast ad campaign is one component of "I Decide," an Illinois Department of Public Health initiative that aims to curb tobacco use among young people. While the television and radio ads are probably the most recognizable aspect of I Decide, the true "centerpiece of the program" is the fact that young people in all seven counties are helping determine how to persuade their peers not to smoke, said Public Health spokesman Tom Schafer. Starting in January, messages from I Decide will begin appearing on billboards and buses, including those running on Springfield routes, Schafer said. Madigan's proposal, House Resolution 497, recommends to the Department of Public Health "that Illinois would be better served during this time of budgetary crisis" if the agency didn't spend the $11 million appropriation. [The State Journal Register, Dec. 21, 2001]

• 11/14: State public health officials are being urged not to spend $11 million earmarked for youth smoking prevention programs and instead let lawmakers use the cash to plug holes in the state's budget. Saying the state would be "better served during this time of budgetary crisis" to spend the money elsewhere, House Speaker Michael Madigan, a Chicago Democrat, recently filed a proposal requesting the Illinois Department of Public Health forgo the funding that lawmakers approved earlier this year. To health advocates, Madigan's actions illustrate how dire the state's economic situation has become. Lawmakers face tough decisions on trying to cut $500 million from the $53 billion state budget as the state has slipped into a recession. The downturn was exacerbated by the Sept. 11 terrorist attacks. "It's a shame we've reached this point," said Attorney General Jim Ryan, who led Illinois' lawsuit against cigarette companies and who has continually called for using more of the money for health programs. "I think we have spent too much money and we have borrowed too much money and we haven't saved enough money." [Chicago Daily Herald, Nov. 14, 2001]

• With passage of the fiscal year 2002 budget, lawmakers allocated $50 in settlement funds to the Illinois Department of Public Health for TOBACCO PREVENTION AND CONTROL PROGRAMS. These funds will be used to support the state and local tobacco control efforts which began in the previous fiscal year. Programs such as I Decide and the Winnebago County youth prevention campaign will be developed in additional areas of the state. [Tobacco Free Press, June 22, 2001]

• As with many states, the money from the tobacco settlement has become a political football in the two years since the state started spending it. So far, of the $367 million it will receive this year, it looks as if lawmakers have decided to spend about $50 million on ANTI-SMOKING programs (up from $27 million last year), $106 million on last year's expansion of the state's circuit breaker program which helps thousands of SENIOR CITIZENS PAY FOR PRESCRIPTION DRUGS, and $35 million for a state income tax cut for the poor. The rest of the money is at the heart of the budget battle between Republican Governor George Ryan and the duo of Democratic House Speaker Michael Madigan and Republican Senate President James "Pate" Philip. The governor wants to earmark approximately $40 million a year to pay for several buildings at medical schools for research as part of his overall $1.2 billion spending plan for new roads and buildings. Madigan, however, remains opposed to that given the state's uncertain economy. He's using Ryan's desire for plum projects around the state as a bargaining chip to get $360 million put into the budget for pork projects for state legislators. [Daily Herald, May 27, 2001]

• On March 26th, the House passed Representative John Fritchey's proposal to spend $232.5 million of the $300 million tobacco settlement money for the next fiscal year on health related programs. Under Fritchey's proposal, $67 million would go to SMOKING PREVENTION AND CESSATION programs, $20 million would go to health clinics in areas which are medically underserved, $39 million would go to universities to research tobacco-related issues, and $70 million would go to subsidize the cost of PRESCRIPTION DRUGS for seniors and low income families. This is a considerably different plan than what Illinois did last year. Last year, the lawmakers gave $280 million back to its constituents for a tax rebate and only spent about $30 million on anti-smoking programs. Fritchey's proposal now moves to the Senate where its prospects are uncertain. [The Chicago Tribune, March 27, 2001]

• On September 8th, the Chicago Tribune reported that the analysis it did of the property tax rebate program the state enacted and under which the state is now distributing $280 million of settlement funds is actually going to send about $36 million to the federal government because most persons getting a rebate check will have to pay about 17% of it in federal taxes. Most people will get rebate checks of between $25 and $300. The Tribune story pointed out that, while the federal government will get a $36 million boost in tax revenue from this roundly criticized use of settlement funds, TOBACCO PREVENTION AND CONTROL PROGRAMS were allocated only $29 million by the legislature and governor out of the settlement funds. Representative John Fritchey (D), who had opposed this use of the funds and had wanted much more to go for health programs, said: "Only in Illinois could we create a tax rebate plan that will result in us having to pay taxes. It's hard to believe they took this much time and effort to come up with a plan to give our money to the federal government. Never has so much money done so little for so many." When the legislature voted how to use the settlement funds, it used about $350 million for a tax relief package, of which $280 million is the these tax rebates; the rest of the $350 million was for an expanded real estate tax relief and PHARMACEUTICAL DRUG subsidy for SENIOR CITIZENS and for an earned income tax credit for the working poor. In addition, $225 million of settlement funds were earmarked for a rainy day fund, and $60 million went for medical research and treatment programs. [Chicago Tribune, September 8, 2000]

• An update on the allocation of settlement funds shows that $1.8 million had been appropriated for FY'01 for SENIOR CITIZENS HEALTH SERVICES. This is in addition to the $35 million mentioned earlier (see below) for PRESCRIPTION DRUG ASSISTANCE FOR ELDERS. The $1.8 million was contained in H 4438, and was enacted earlier in the session. [National Conference of State Legislatures report, August 1, 2000]

• McHenry County: On July 13th, the McHenry County Board voted approval for continuing with the multi-million lawsuit against the tobacco industry. The suit had been filed earlier in the day by a private attorney on behalf of the county. Last year, the Board had voted not to join another lawsuit against the state to obtain settlement funds because they did not approve of some wording in the suit which accused the Attorney General of acting improperly or illegally. At issue is whether the County should receive some of the settlement funds because the County incurred expenses for persons with tobacco-related diseases who are now cared for in the county-owned Valley HI Nursing Home. Also at issue is whether the county is precluded from proceeding with the lawsuit because of the settlement agreement the state entered into with the tobacco industry. Another lawsuit on this issue is currently pending, in which local governments and hospital districts claim the settlement should not cover them. The McHenry County lawsuit includes Boone County and nine hospital districts. [Chicago Daily Herald, July 19, 2000]

• As noted below, the budget bill passed a few days ago allocated $686 million of the settlement funds expected to be received for the coming fiscal year. The funds were allocated as follows: $280 million for property tax relief; $225 million for a budget reserve account; $35 million for PRESCRIPTION DRUG ASSISTANCE FOR SENIOR CITIZENS; $35 million for a new tax credit for low-income workers; $29.5 million for TOBACCO PREVENTION & CESSATION PROGRAMS; and the remaining $81.6 million for medical research, medical technology, and state administrative costs. These allocations drew praise from some legislators and others who wanted the money spent on tax relief, and anger from others who felt that more of the money should have been targeted at health care and TOBACCO PREVENTION. Many critics of the plan said that Illinois was one of the few states to so directly use the settlement funds for tax relief, although it can be argued that many states have done this use shell game tricks. The governor is expected to sign the budget bill. [State journal-Register, April 25, 2000]

• Cook County officials shocked Illinois legislators when its attorneys announced that the county calculated that it should receive more than 25% of the state tobacco settlement funds, or about $2.579 billion over 25 years; thus about $103 million annually. Cook County filed a lawsuit against the tobacco companies about two years ago to obtain reimbursement for its past and future smoking-related health care costs incurred at Cook County Hospital. This case could be settled, or it could go to trial and a jury would decide how much, if anything, Cook County should get. However, if Cook County gets anything, it all would come out of the state settlement amount; it would not be an additional payment by the tobacco industry to Illinois. [Chicago Sun-Times 3/2/99]

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INDIANA

Total: $4 billion; 1st paymt $49 million; 2nd paymt $130.8 million

• 5/2: Kicking the habit is becoming more popular, and Union County smokers soon will get some help doing it. Last year, more than 193,000 Indiana adults stopped smoking and cigarette consumption dropped 18 percent, the Indiana Tobacco Prevention and Cessation Board announced this week. Funds from the 1998 Master Settlement Agreement with the tobacco industry pay for state anti-smoking programs and the ITPC office. They also fund local stop-smoking programs such as "Clean Break," which Union County will use. [Richmond Palladium-Item, April 29, 2003]

• 2/24: The legislation in question is House Bill 1002, which passed out of the House Public Health Committee last week. The bill would allow Gov. O'Bannon to use $440 million from the tobacco settlement to fund other programs, including an economic development plan. The Lung Association's position is that "all, not part, of the tobacco settlement money should be earmarked for programs that prevent youth smoking, help adults quit, and cover rising tobacco-related health care costs." They are correct. [Hoosier Times, Feb. 24, 2003]

• 2/14: Gov. Frank O'Bannon got about half of what he wanted of the tobacco settlement money from a compromise reached by Rep. Charlie Brown, D-Gary. O'Bannon had wanted $887 million from the state's share of the national tobacco settlement, including issuing bonds based on the 40 percent of the money that had not been dedicated to health-related programs for the next 20 years. Earlier in the week, Brown had determined his amendment, which passed out the House Public Health Committee Wednesday, would not allow the governor to take any money from the current reserves. "I had a difficult time convincing members of the committee to accept taking any money from the tobacco settlement, after we had earned praise for dedicating 100 percent of the settlement to health," he said. In the end, Brown split the difference and allowed the Energize Indiana plan to have $120 million of the $195 million the governor had requested from the current reserves and 20 percent of the surplus for about $466 million total. [Gary Post-Tribune, Feb. 14, 2003]

• 1/19: A panel of Northwest Indiana legislators offered sympathy, but no commitments, Friday toward a push to stop the state's tobacco settlement money from being diverted for economic development. The Tobacco Prevention and Education Coalition for Porter County hosted a legislative meeting Friday at Valparaiso University with Public Health Committee Chairman Rep. Charlie Brown, D-Gary, and Rep. Ralph Ayres, R-Chesterton, and Rep. Duane Cheney, D-Portage, both members of the Ways and Means Committee. More than a dozen representatives of coalition members and partners briefed lawmakers on anti-tobacco programs in Porter County funded by grants in the past year from the $309,000 the coalition received from the Indiana Tobacco Prevention and Cessation Agency. Brown said Indiana receives almost $200 million a year from the national settlement with the tobacco industry, 60 percent of which is funneled into anti-smoking education, prevention and business compliance programs. Brown said the governor's Energize Indiana plan would take money from the other 40 percent. "We are facing impossible choices," said Brown, who three years ago co-sponsored the legislation that set aside all of Indiana's tobacco settlement money for anti-tobacco efforts. [Gary Post-Tribune, Jan. 18, 2003]

• 7/23: By maintaining funding for its tobacco prevention program and increasing the state cigarette tax, Indiana has become a "new national leader" in protecting kids from tobacco, according to a national report issued today by the American Lung Association, American Cancer Society , American Heart Association and Campaign for Tobacco-Free Kids. The report praised Indiana's leaders for continuing to use $32.5 million a year of the state's tobacco settlement money to fund a tobacco prevention program despite pressures to cut the funding because of a budget shortfall. Indiana ranks sixth in the nation in funding tobacco prevention, the same ranking it held when the health groups released their last report in January. Indiana currently spends 93.4 percent of the minimum amount of $34.8 million that the U.S. Centers for Disease Control and Prevention (CDC) has recommended the state spend on tobacco prevention. The report also praised Indiana for increasing the state cigarette tax by 40 cents a pack. [U.S. Newswire, July 22, 2002]

• 6/12: Convenience store owners south of the Indiana-Michigan state line believe a recently proposed tax hike will actually hurt state revenue. According to a bill that comes before the Indiana Senate Finance Committee today and the full assembly next week, the Indiana sales tax could be raised from 5 to 6 percent; the gas tax could increase 3 cents to 18 cents per gallon; and the cigarette tax could jump from 15.5 to 55 cents per pack. "I think it's terrible," said Barbara Jones, a customer at Smoke Shack, one of almost a dozen tobacco and convenience stores sitting just south of the Michigan-Indiana state line on Indiana 933. "I'll just start using my (nicotine) patches," she said. But for now, Jones, like many Michigan smokers, still drives to Indiana to buy her cigarettes more cheaply -- in fact she saves almost $1 per pack -- because Indiana's tax is currently 60 cents per pack less than Michigan's. [South Bend Tribune, June 12, 2002]

• 4/16: For the second time in two weeks the State Board of Finance, consisting of O'Bannon, a Democrat, and Auditor of State Connie Nass and Treasurer of State Tim Berry, both Republicans, voted to move money to the state's General Fund. The board also approved using another $185 million in reserve funds -- including money from the state's tobacco settlement account and highway fund -- to help close the growing budget gap. [Lafayette Journal & Courier, April 16, 2002]

• 3/25: Money from Indiana's share of the legal settlement with tobacco companies could be used to help local restaurants go smoke-free. That is one way the University of Evansville Smokefree Communities Partnership plans to spend part of a $234,900 grant it will receive this year from Indiana Tobacco Prevention and Cessation. ITPC is awarding $7.5 million in grants to lead agencies in each of Indiana's 92 counties to coordinate local tobacco prevention and cessation programs. [Evansville Courier, Feb. 12, 2002]

• 12/13: The Blackford County Tobacco Free Coalition will use about $25,000 in grants next year to provide education, promote leadership, develop smoking-cessation classes and recruit businesses to become smoke-free. The coalition is made up of the American Cancer Society and more than a dozen county agencies that include law enforcement officers and school and public health officials. The grant is part of the 1998 tobacco settlement between big tobacco companies and the states. Indiana will get $112 million each year for 20 years to use on tobacco prevention and cessation programs. The Blackford coalition recently received a grant of $52,000 spread over 2 years to develop tobacco prevention and cessation programs on the local level. "We're ready to start forward. We're going to do a lot of great things in Blackford County the next 2 years," said Jennifer Rice-Snow, community development director for the American Cancer Society. [Muncie Star-Press, Dec. 13, 2001]

• 10/16: County health departments knew they would get one check from the national tobacco settlement this year. Two checks came. Now, health departments in the region are pondering what to do with the extra, unexpected money. Second-round checks ranging from $12,000 to $122,000 arrived in auditors' offices more than a month ago. "It's pennies from heaven," said Loren Robertson, administrator of the Fort Wayne-Allen County Health Department. For other departments in the region, the money will pay for soil studies in areas where septic systems continue to fail, West Nile virus testing, diabetes and hypertension education, as well as programs that reduce tobacco use. The first payment from the tobacco settlement arrived in July and was from the state's local health maintenance trust fund. Allen County received $21,000 and spent it upgrading food inspection equipment. The second payment, arriving in late August, comes from an extra $3 million the General Assembly set aside and distributed according to population. Both payments are a small part of the $167 million tobacco settlement the state received last year. [Fort Wayne Journal Gazette, Oct. 15, 2001]

• 9/7: Since the state has fallen on hard fiscal times Indiana is considering tapping into the tobacco settlement money, which brings hundreds of millions of dollars into the state each year For the past three years, 40 percent of the money collected has been placed in a trust fund for future use. The remaining 60 percent is used entirely for health-related costs, at the insistence of Gov. Frank O'Bannon. Indiana used the money to create a prescription drug program for the elderly, helping more than 55,000 Hoosiers through the state's Hoosier Rx program. Thousands of youth were enrolled in the Children's Health Insurance Program. State community health centers and smoking cessation, prevention and education efforts all have grown thanks to the windfall of money from tobacco settlement funds. O'Bannon is not in favor of using the funds to balance the budget, but the governor cannot prevent lawmakers from adding tobacco funds to the General Fund in the future. [Journal and Courier, Sept. 7, 2001]

• The Indiana Legislature finished up its session the weekend of April 27th. ANTI-SMOKING PROGRAMS received an additional $30 million of funding to be spent over the next two years. Last year, the legislature appropriated $35 million. Since it takes considerable time to set up a program and spend the money, the programs are not expected to be effectively funded until the next fiscal year. Thus, a budget of $65 million ($32.5 million annually) should be spent over the next two years. After taking into account the OSH funding that Indiana receives, the amount spent on anti-smoking efforts is just shy of the CDC Minimum guidelines. [TCSG source, May 7, 2001]

• On September 1st, the Indiana PRESCRIPTION DRUG ADVISORY COMMITTEE, which was created to develop a plan for how the new prescription drug program for ELDERS should be implemented, issued its recommendation to Governor Frank O'Bannon. The $20 million program was enacted this year by the legislature, using settlement funds. The recommendations by the Committee call for providing reimbursement for the cost of prescription drugs for elders who have incomes at or below 135% of the federal poverty level ($11,124 for a single person, and $14,940 for a couple); eligible persons would receive between $500 and $1,000 annually depending on their income. During the first phase of the program, persons would get refunds for prescription drugs they purchased after July 1, 2000; in the second phase of the program, seniors may be able to get cost savings when they purchase drugs, maybe using a magnetic ID card. The Committee said it was clear most elders wanted the program to serve more people with a limited cash benefit, rather than fewer people with a large cash benefit. The Committee projected that as many as 66,000 elders would be eligible for benefits under the recommended plan. [AP in Messenger Inquirer, September 2, 2000]

• On April 11th, Attorney General Karen Freeman-Wilson announced the awarding of $1.5 million of settlement funds her office manages. The money is going to a number of groups for health-related projects, including some portions for TOBACCO PREVENTION & CESSATION PROGRAMS. Programs getting funds include: Indiana MINORITY HEALTH Coalition, $500,000; Indiana Boys & Girls Clubs, $500,000; Indian State Excise Police, $250,000; and, Indiana Department of Health's Office of Women's Health, $250,000. In coming months, the state will begin spending the $35 million the legislature allocated to TOBACCO PREVENTION & CESSATION, as well as the $20 million for the PRESCRIPTION DRUG PROGRAM FOR ELDERS, and the $25 million for rural and urban community health clinics, as well as the $4.5 million for county boards of health. [The Times Online, April 12, 2000]

• Gov. Frank O'Bannon praised lawmakers Monday as he signed legislation allocating the state's share of the national tobacco settlement toward health and anti-smoking programs, and he called the plan a blueprint for other states to follow. The legislation, which takes effect July 1, won overwhelming approval in both chambers during the final days of the 2000 legislative session. Among other things, it spends $35 million on smoking cessation and prevention efforts and $20 million to help low-income senior citizens pay for prescription drugs, an initiative O'Bannon supported publicly. The law commits the state to spend $112.5 million this year. In addition to the anti-smoking and senior prescription drug initiatives, the law designates $25 million to community health centers in rural and inner-city areas, $28 million to children's health insurance and $4.5 million to county health boards. "We are one of very few states spending 100 percent of the money on health," said Rep. Michael Murphy, R-Indianapolis. [Associated Press March 14, 2000]

• TOBACCO CONTROL and AGING ADVOCATES scored major victories on March 3rd when both houses of the legislature passed a settlement spending plan which will allocate more than $110 million over the next year for a variety of health-related programs. Under the bill, which the governor is expected to sign, beginning on July 1st, $35 million will be available for TOBACCO PREVENTION & CESSATION PROGRAMS, $20 million will fund a PRESCRIPTION DRUG PROGRAM FOR ELDERS, $15 million will go for community health centers, a one-time allocation of $10 million will go for capital improvements in community health centers, a one-time $1.5 million will be divided among county health departments, and additional funds will go for the Children's Health Insurance Program. These allocations are a part of the overall settlement plan which states that in this first year, half the settlement payments can be spent and the other half will be invested; in future years, 60% will be available to be spent and 40% will be invested. Of the funds which are to be spent on TOBACCO CONTROL, there will be an executive advisory committee established to decide how the funds will be spent; the committee will have an executive director or tobacco czar, four state officials, 11 members appointed by the governor who have knowledge of smoking cessation or health care, and six members from anti-smoking groups. Also, there will be a drug advisory committee that will make recommendations on how to run the PRESCRIPTION DRUG PROGRAM; the state Family Social Services Administration would be required to abide by the advisory committee's recommendations, which could include contracting the program out to the private sector or having the FSSA run it. The actual operation of the drug program was a sticking point in the budget negotiations, while, at the same time, passage of the drug program was critical to gaining the support of Senator Larry Borst (R) for the overall bill. The final plan reflects both the governor's and Attorney General's initial plan and the work of Borst and Rep. Charlie Brown (D). It also reflects the hard work of AGING and TOBACCO CONTROL ADVOCATES. See Highlights above for more on this victory, including a news article giving more details. [AP in Messenger-Inquirer and The Times Online, March 4, 2000]

• According to news reports on Dec. 10th, about $4 million of Phase II settlement funds will be distributed to Indiana tobacco farmers and quota holders by the end of 1999. The money will go to almost 900 farmers/quota holders in three counties: Perry, Warrick and Spencer. Gary McDaniel, a tobacco farmer, said "if the [Phase II] deal holds up for the entire 12 years, that money will help keep us in business." That comment reflects the concerns that many tobacco control advocates have had about Phase II funds, i.e., that the money is intended to keep tobacco farmers growing the weed, not to help them transition to other crops. In fact McDaniel stated he would like to see an additional 5% of the regular settlement funds set aside to help farmers transition to other crops, but, interestingly, he doesn't see Phase II money as being for that purpose. [Evansville Courier & Press, Dec. 10, 1999]

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IOWA

Total: $1.7 billion; 1st paymt $20.9 million; 2nd paymt $55.8 million

• 1/10: Iowa has been among many states that have turned to tobacco settlement funds to help alleviate budget woes during tough economic times.Iow lawmakers decided in 2000 to dedicate most of the state's share of the national tobacco settlement fund - a total of nearly $2 billion -- to health care. Of the $55 million expected for 2000, $9.3 million was dedicated for anti-smoking programs while most of the rest went to other health-related programs such as Medicaid.Iowa's use of its settlement funding changed in 2001, when lawmakers decided to securitize the settlement in order to ensure that future payments would not depend on the financial health of the tobacco industry. [Sioux City Journal, Jan.7, 2003]

• 7/19: Governor Tom Vilsack today plans to propose diverting $30 million from Iowa's share of the multistate tobacco settlement to local economic development projects across Iowa. The proposal is part of Vilsack's overall economic development restructuring plan that also would allow local officials to have more say in how Iowa attracts and supports business. Vilsack, a Democrat, plans to unveil his plan during a stop in Davenport. The governor wants to divide the state into 15 regions where local boards of government, business and school officials would determine strategies and seek a share of the existing $40 million in state economic development grants and loans. [Des Moines Register, July 17, 2002]

• 6/8: Iowa's anti-smoking campaign, which already lost nearly half its budget, is about to lose its leader. Cathy Callaway, who has run the Iowa Division of Tobacco Use Prevention and Control since its inception two years ago, is resigning July 1. She has accepted a job in an anti-smoking program the American Medical Association operates in Chicago. Callaway's agency took one of the biggest hits of any state program caught up in Iowa's budget crunch. But she said that didn't play a major role in her decision to leave. "I think it's really more that I'm young and I'm single and moving to the big city has a certain appeal," said Callaway. But the usually upbeat administrator nearly came to tears Thursday during a tobacco commission meeting to decide how her agency would proceed. "A cut of this impact sucks," she told the panel. Legislators slashed her overall budget from $9.3 million to $5 million. Money for the agency's high-profile anti-smoking ads was cut by nearly three-quarters, to $966,000. [Des Moines Register, June 8, 2002]

• 4/25: Local health officials fear state lawmakers might hijack money earmarked for anti-smoking campaigns to help make up for a looming $1 billion budget shortfall. Under a nationwide settlement with tobacco companies, Illinois will receive $300 million annually for the next 25 years. Portions of that annual windfall are sent to health departments in each county in Illinois. For the past two years, Will County has received $500,000 payments to provide local tobacco prevention programs. "And now even that money may be in jeopardy," Will County Health Department director James Zelko told a county committee Tuesday. [Daily Southtown, April 24, 2002]

• 4/8: Nearly 500 students -- including 10 local students who are involved in anti-tobacco organizations in Newton and Prairie City -- rallied at the Statehouse on Wednesday in an effort to fight cuts to Iowa's Tobacco Use Prevention and Control Program. Unfortunately, their efforts did not accomplish what they had hoped. In a 54-44 vote, the House of Representatives approved a bill that designates $65.2 million of Iowa's tobacco settlement money for various health programs. The bill has moved to the Senate for consideration and, if approved, will result in a $4.3 million reduction to tobacco prevention and control initiatives. Kathy Hammerly, adult sponsor of Breath of Fresh Air (BOFA), said local students -- members of Newton Senior High School's BOFA organization and PCM High School's T-4 -- who attended the seventh annual Youth Advocacy Day and Kick Butts Day Rally on the steps of the Capitol were disappointed. "The students just felt like adults don't care about kids," Hammerly said. "That's what's really sad." [Newton Daily News, April 7, 2002]

• 4/4: Hundreds of Iowa teen-agers marched, chanted and lobbied Wednesday against budget cuts to a tobacco prevention program, but their presence failed to influence lawmakers. The Iowa House voted 54-44 Wednesday for House File 2615, a bill that spends $65.2 million of tobacco settlement money for various health programs. The bill moves to the Senate for further debate. The legislation is controversial largely because it reduces money for tobacco prevention and control initiatives from $9.3 million to $5 million. The money pays for a youth-oriented anti-smoking campaign, a telephone hot line and other anti-smoking efforts. Rep. Mary Mascher, an Iowa City Democrat, offered an amendment to keep funding the same as this year's. Her amendment was rejected on a 43-52 vote that was along party lines. "You are abandoning a commitment in this state to helping keep kids off tobacco," Mascher said. "This is a victory today for big tobacco in Iowa." Rep. Bob Brunkhorst, a Waverly Republican, said the cuts are necessary to help pay for a shortfall in Medicaid. [Des Moines Register, April 4, 2002]

• 3/8: Some state agencies would see their budgets cut another 3 percent in the fiscal year beginning July 1, under a revised 2003 budget that will be released today by Gov. Tom Vilsack. The cuts would come on top of several waves of budget reductions the state has already endured, including a 4.3 percent cut last November and a 1 percent cut last month. Those who would be protected from further cuts in the upcoming year include K-12 public schools and higher education, human services, elder affairs, corrections, public safety and public defense. "This is where I draw the line," Vilsack said. "These are hard times for the state budget and family budgets - which is exactly why we must protect Iowa's priorities with a budget that is balanced not only in numbers, but also in values." An estimated $132.5 million shortfall in the upcoming budget year forced Vilsack to adjust his $4.8 billion state spending plan less than two months after releasing his original budget Jan. 18. State revenues have come in consistently under expectations. [Des Moines, March 7, 2002]

• 2/26: The Republicans' plan is to take $44.8 million from the rainy-day reserves, transfer $51 million from other funds and use a combination of budget cuts and worker furloughs to cover the rest of the shortfall. The state would scoop $28 million from health-care accounts financed by Iowa's share of a national tobacco settlement, as well as $11.3 million from environmental and parkland acquisition funds. [Des Moines Register, Feb. 26, 2002]

• 2/12: The Legislature approved a $61 million bailout of the state's troubled Medicaid program Thursday, blocking proposals to cut payments to health professionals. The bill transfers money from the Senior Living Trust Fund and from the settlement of the state's lawsuit against the tobacco industry. "This bill isn't perfect, but we have a good compromise here,'' said Rep. Pat Murphy, D-Dubuque. [Associated Press, Feb. 11, 2002]

• On May 3rd, the House unanimously voted to spend more than $60 million from the tobacco settlement for several health-related programs. The plan will now move to the Senate where a nearly identical version has been approved and where a quick approval is likely. The biggest chuck of the money goes to supplement the state's Medicaid program, a total of $28.2 million. The bill also includes more than $2 million to establish a drug treatment program for those on probation, to be located at Iowa Veterans Hospital in Knoxville. [Des Moines Register, May 5, 2001]

• During the week of April 16th, the Senate approved Senate File 533 which would sell off the annual tobacco settlement payments through the issuance of bonds. Proponents of this plan argue that it would shift the risk of receiving less in payments to the bond holders. Senator Jeff Lamberti said that this would create a pot of money providing $2 billion for HEALTH CARE PROGRAMS. Part of the plan is to build a $1 billion endowment by 2030. The House is now preparing to debate this plan, and Governor Tom Vilsack indicated on the 23rd that he backs the plan. [Des Moines Register, April 24, 2001]

• On August 4th, state health Department officials said that $1.5 million of the settlement funds this year will be allocated to the counties for local health programs. Of that money, half is to go for HOME HEALTH CARE SERVICES FOR ELDERS to help them stay in their own homes, according to Julie McMahon of the Health Department. While this is a very limited amount of money for each county, it was al the legislature appropriated, and it will help fill gaps in services. [The Hawk Eye, August 5, 2000]

• On July 27th, a state court was reported to have rejected state arguments to dismiss a lawsuit filed on behalf of Medicaid recipients who claim that a share of the tobacco settlements should go directly to them, under federal Medicaid law. This means the case is likely to go to trial at some point. The suit is similar to ones filed on more than 20 states. Thus far none of the suits have been successful, but none of the ones that have been decided have gotten to the merits of the cases, having been dismissed for reasons of sovereign immunity or other grounds. It is not clear how the Iowa or other cases will be decided if they get to the issue of interpreting the federal Medicaid law. Stated somewhat oversimply, plaintiffs claim that, once Iowa has used its settlement funds to cover the costs of Medicaid health care actually related to tobacco use, the remainder should go directly to Medicaid recipients. [Reuters, July 27, 2000]

• On May 5th, Iowa became one of only three states to earmark for health care all the money it will receive from the landmark tobacco settlement, state officials said. Gov. Tom Vilsack signed into law a bill that outlines how to spend the $54.9 million Iowa will get in fiscal 2001, which begins July 1. The money will go to three areas: access to health care, public health and smoking prevention, and substance abuse treatment and prevention. Iowa joins Kansas and Washington in setting aside the money from the 46-state settlement with tobacco companies entirely for health care. By spending the $54.9 million on health care, Iowa was able to leverage another $36.8 million in federal matching funds and grants for the targeted programs. The new law calls for spending: $200,000 to expand the Hawk-I program, which helps provide health insurance coverage to low-income children. $9.3 million for a comprehensive anti-smoking campaign. $11 million for beefed-up substance abuse treatment programs. The law covers only the next fiscal year. While the politicians and others congratulated themselves for a job well done, Attorney General Tom Miller acknowledged that $65 million of the $71 million the state already has received since December will be directed to the state's General Fund to help bolster other areas of the state budget. The remaining funds received will be placed in the state's tobacco settlement fund for fiscal 2001. Of the $54.9 million total Iowa expects to receive for fiscal 2001, more than $20 million will go to help supplement Medicaid payments to doctors and other health care professionals. [Cedar Radids Gazette 5/6/00]

• TOBACCO CONTROL GROUPS in the state, on April 24th, were basking in victory after the legislature completed work on both the settlement funds bill and on Senate Bill 2366 which sets penalties for both merchants and youth for selling and buying, respectively, tobacco products to minors. The legislature also voted to ban all free promotional item give-aways by the tobacco industry. As noted below, the legislature voted to allocate $9.3 million of settlement funds to TOBACCO PREVENTION & CESSATION PROGRAMS. This has been a great session for TOBACCO CONTROL ADVOCATES. While no settlement funds went for AGING PROGRAMS, aging advocates scored a major victory administratively by getting over $155 million of federal Medicaid funds for in-home care programs. [Iowa Online News, April 25, 2000 and TCSG sources]

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KANSAS

Total: $1.6 billion; 1st paymt $20 million; 2nd paymt $53.5 million

• 4/4: House Republicans on Thursday rejected a key part of Gov. Kathleen Sebelius' plan to eliminate a $230 million budget deficit without a tax increase or education funding cuts. The measure would have issued $175 million in revenue bonds to be repaid in the next 15 years from part of the proceeds of the 1998 national tobacco settlement. Every Democrat voted for the measure, and all but one Republican voted against it. The vote was 79-44. After the vote, Sebelius, a Democrat, issued a statement calling her plan one "that sees us through this extraordinary year and these uncertain times." "One thing is clear," she said. "Voting against pieces of the revenue package when there have been no other proposals or solutions offered is a disservice to the people of Kansas." [Kansas City Star, April 4, 2003]

• 3/27: Governor Kathleen Sebelius proposed Tuesday the state issue bonds, speed up collection of local property taxes and take other steps to balance the budget through mid-2004. Sebelius said her package, which includes a gambling provision she had already endorsed, would allow the state to avoid a tax increase and protect education from further funding cuts. For the current fiscal year, which ends June 30, Sebelius proposes issuing $175 million in bonds backed by money from Kansas' $1.7 billion share of a 1998 settlement between states and tobacco companies. An additional $5 million would be captured through a tax amnesty program. [Poker Mag.com, Mar. 27, 2003]

• 5/29: Some lawmakers say Gov. Bill Graves should veto a raid of tobacco settlement funds that is being used to increase school funding by one-half of 1 percent. "Raiding this trust fund sets a terrible precedent," Rep. Rocky Nichols, D-Topeka, said. "Gov. Graves could line-item veto this raid, and the schools would still get their money." In the legislative session that ended last week, lawmakers approved taking $11.5 million from a trust fund for children's programs that had been funded by moneys from Kansas' share of the legal settlement with major cigarette and tobacco companies. That $11.5 million was to be deposited in the state's all-purpose general revenue fund. The deposit would then free up $11.5 million in general revenue for public schools, which would increase base state aid per pupil from $3,870 to $3,890, a $20 increase per student. Graves' office said it could not respond to Nichols' comments. [Lawrence Journal-World, May 27, 2002]

• 2/7: Attorney General Carla Stovall worries that tough financial times will tempt the Kansas Legislature to raid money previously set aside to help children. Stovall was among 22 attorneys general to successfully sue major tobacco companies to recoup financial losses stemming from smoking-related illness and stop them from marketing their products to children. Kansas' share of the $206 billion settlement is approximately $1.6 billion, paid out in installments of roughly $40 million annually. A candidate for the Republican nomination for governor, Stovall spoke with Sun editors Tuesday during a swing through Southeast Kansas to discuss the Kansas Endowment for Youth fund, into which tobacco settlement money now goes. "I want to protect the children's initiative fund," she said. [Parsons Sun, Feb. 6, 2002]

• On May 3rd, dozens of issues were on the table as House and Senate conferees negotiated on how to close the $206 million gap between expected revenues and spending already approved for FY2002. But with all of the issues on the table, legislators have yet to touch the tobacco settlement issue. In 1999, lawmakers set up a trust fund to hold most of the money and set it aside for children's programs. However, Governor Bill Graves and Senators want to spend $16 million of the funds on government programs. House members said Graves and Senators were suggesting the state break a commitment to the children's programs. [The Associated Press, May 4, 2001]

• As of April 6th, the amount of tobacco settlement money that will be used on TOBACCO PREVENTION is considerably up in the air. Last year, only $500,000 of the settlement money was used for tobacco prevention. This put Kansas at the bottom of state rankings in tobacco prevention program financing, trailed only by Michigan and North Dakota which last year did not allocate any towards the cause. Renee Kelley, president of the Tobacco Free Kansas Coalition said that "it's a huge embarrassment" and implies that "we don't care about our communities and we don't care about our kids." The National Center for Disease Control recommends that Kansas spends at least $18 million annually for this cause. [The Business Journal, April 6, 2001]

• On August 11th, the 15 member Kansas Children's Cabinet approved and sent to Governor Graves their recommendations for how the state should spend $40 million in settlement funds in the fiscal year beginning July 1, 2001. The Children's Cabinet was created by the legislature to make recommendations for how the settlement funds, now going into a special trust fund, should be spent; by law, the money can only be spent to benefit children. The Cabinet recommendations include a $10 million increase over current fiscal year spending. The Cabinet recommended $14.3 million for the Smart Start Kansas program, which got $2,75 million this year. The Smart Start program provides early childhood care and education programs, plus some health care services for children and their families. Attorney General Carla Stovall wanted to increase funding for TOBACCO PREVENTION from the $500,000 approved for this year to $6 million, but some Cabinet members objected, and instead voted to earmark some of the Smart Start funds for this purpose. Stovall was the one Cabinet member to vote against the overall recommendations because of her fear that TOBACCO PREVENTION will be cut if the requested Smart Start program allocation is not approved by the Governor or legislature. The recommendations will be reviewed by the governor to see if they will be included in his budget proposal which will be presented to the legislature in January. Graves has said he is likely to not make any radical changes in the recommendations. [AP in Lawrence Journal World, August 12, 2000]

• On May 17th, Governor Bill Graves signed the final two bills dealing with the state budget, including the one dealing with settlement funds (see below). The bill allocates just $500,000 for TOBACCO PREVENTION & CESSATION. [AP, May 18, 2000]

• Late on April 29th, as they wrapped up the 2000 legislative session, lawmakers approved a compromise spending bill for FY'01, which begins on July 1, 2000; the bill also allocates about $3 million in settlement funds. Per prior law passed last year, the settlement money was to go for children's programs, but there was much disagreement about which kids programs. The final bill says that some of the money shall go for children's health and education programs and some for programs to reduce the number of young criminal offenders. Since both the House and Senate had previously agreed that $1 million of the settlement funds should go for TOBACCO PREVENTION PROGRAMS FOR YOUTH, it can be assumed that was included in the final bill, although this article does not say anything about it. [AP in Lawrence Journal-World, April 30, 2000]

• On April 12th, three Medicaid recipients filed a lawsuit claiming that a large share of the settlement funds should go to them and other recipients. Attorneys for the plaintiffs have asked for class action status for the suit, which is similar to over a dozen such suits filed in other states. In all these suits, the plaintiffs claim that federal law requires the states to distribute to Medicaid recipients any funds beyond the amounts the states actually paid for tobacco-related health care. The three plaintiffs are all in their 40's or 50's and had tobacco-related diseases. Since the state has already achieved finality of its settlement agreement, this should not affect that, but it would affect the distribution of the settlement funds if it were to succeed; none of the other such suits has yet been successful. [Topeka Capital-Journal, April 12, 2000]

• $80 million of Kansas' settlement funds will be placed in the state general fund over two years. The settlement money was all supposed to be placed in the Children's Trust Fund; it reportedly took an $80 million raid of that fund to get Gov. Bill Graves to sign the bill. The governor has indicated that the funds might be used to fund a school aid increase. [Topeka Capital-Journal 7/26/99]

KENTUCKY

Total: $3.5 billion; 1st paymt $42.3 million; 2nd paymt $112.9 million

Kentucky will be receiving two pots of tobacco funds: the one listed above from the Attorney General settlement; and a second one from the recently agreed upon settlement with the tobacco industry for a total of $5.15 billion to go to a trust fund for tobacco farmers -- this latter settlement may give Kentucky up to $1.5 billion dollars in addition to the AG settlement funds. The $1.5 billion is to help tobacco farmers who might be hurt by the AG settlement.

• 7/18: Kentucky Attorney General Ben Chandler, Democratic candidate for governor, stumped for votes Tuesday afternoon at the 60th annual convention of the Kentucky Association of Conservation Districts, held in the Sloan Convention Center. Chandler claimed much of the credit for getting tobacco settlement money for Kentucky in the combined lawsuit filed by him and other state attorneys general against big tobacco companies. He and North CarolinaÕs attorney general inserted the language in the settlement that resulted in the roughly $140 million in Phase II settlement money coming to Kentucky, Chandler said. [Bowling Green Daily News, July 17, 2003]

• 6/13: Covington could soon provide a home for an enlightened use of Kentucky tobacco settlement money - a $10 million farmers' market. It would allow farmers from Northern Kentucky's 10 counties to reduce dependence on burley tobacco and diversify to other crops. Gov. Paul Patton had the foresight to require half the tobacco settlement money from cigarette makers to go to help farmers find alternatives to make up for lost revenues. A major farmers' market is a quick, visionary solution to assure them a steady demand if they switch to other crops. [June 20, 2003]

• 8/7: The Kentucky Tobacco Settlement Trust Corp., chaired by Governor Paul Patton, announced Monday that applications for compensation from the National Tobacco Growers Settlement Trust would be mailed to about 118,000 Kentuckians this week. Tobacco state governors and the four largest cigarette manufacturers established the trust fund in 1999 to provide direct cash payments to tobacco quota holders and growers to offset income losses they incur as the tobacco industry changes. The Kentucky Tobacco Settlement Trust Corp. has facilitated payment of more than $328 million in the first three annual distributions made since the establishment of the trust. An estimated $130 million will be distributed in December, according to John-Mark Hack, president of the corporation. [Danville Advocate-Messenger, August 7, 2002]

• 6/14: Medicaid recipients who were trying to intercept billions of dollars in tobacco settlement money in Kentucky and Tennessee lost their case yesterday before the 6th U.S. Circuit Court of Appeals in Cincinnati. The appeals court upheld earlier decisions by U.S. District Court Judges Joseph Hood of Kentucky and Todd Campbell of Nashville, who both ruled the states were protected from the suits by sovereign immunity, and because the plaintiffs incorrectly claimed that the states had initially sued tobacco companies on their behalf. "We resisted them because the tobacco settlements were not for smokers but for state costs associated with smoking," said Assistant Deputy Attorney General Scott White, director of Kentucky's Civil & Environmental Law Division. "They had no right of action." In an opinion written by appellate Judge Danny Boggs, two members of the three-judge panel ruled that the Medicaid patients who had hoped to press on with a class-action suit were barred from doing so by the 11th Amendment, which has been interpreted as meaning that states have sovereign immunity and are immune from private lawsuits, with few exceptions. [Lexington Herald-Leader, June 14, 2002]

• 5/20: A state board that funds farm diversification projects voted yesterday to invest $255,000 in a company studying how to use proteins grown in tobacco plants to fight cancer. If the company's study leads to clinical trials and then to production, Kentucky tobacco growers would have a lucrative new market, boosters said. The idea "has lots of facets, opportunities and broad, broad implications for Kentucky farmers," Sam Lawson of Bowling Green told his colleagues on the Kentucky Agricultural Development Board. The company, ApoImmune of Louisville, is lining up investors for its production of "human therapeutics" -- customized proteins that get the body's own immune system to attack and kill cancers and other diseases, including diabetes. The proteins can be extracted from modified tobacco plants. [Associated Press, May 20, 2002]

• 4/8: Kentucky will receive additional tobacco-settlement money, although the amount is not known yet, under an agreement with Brown & Williamson Tobacco Corp. to pay money it had withheld. The Louisville-based company will pay about $204 million to 52 states and territories. Brown & Williamson refused to make a payment in January under the national tobacco settlement, because it disputed cigarette sales figures used to calculate the amount due. "Every state will get a little bit more because of the change in the formula, but we don't know how much yet," Barbara Hadley Smith said Friday in Frankfort. Smith is spokeswoman for Kentucky Attorney General Ben Chandler. [Associated Press, April 7, 2002]

• 3/8: The board of directors of the Kentucky Tobacco Settlement Trust Corp. voted Tuesday to retain its plan for distributing proceeds from the National Tobacco Growers Settlement Trust in 2002, according to a news release. Kentucky is scheduled to receive about $148 million in 2002 as part of the 12-year program by cigarette manufacturers to offset income losses incurred by tobacco growers. This is the fourth year of payments to tobacco farmers as a result of the Master Settlement Agreement, a $246 billion deal between cigarette manufacturers and 46 state attorneys general. [Business First of Louisville, March 6, 2002]

• 12/21: Smokers cannot get a piece of Kentucky's portion of the national tobacco settlement, though they can still pursue their own claims for smoking-related health problems, the Kentucky Supreme Court ruled yesterday. Kentucky was one of 46 states that reached settlements with the cigarette manufacturers to recover the health-related costs of smoking. Under the terms of the agreement, Kentucky could receive as much as $3.45 billion over 25 years. [Associated Press, Dec. 21, 2001]

• 12/17: Governor Paul Patton told some House members yesterday that Kids Now, a wide-ranging health initiative for children, will not spend all its money this year, and the excess may help cover a budget shortage. Despite that, his next budget will include full funding of Kids Now and a second program -- an ambitious project to diversify Kentucky agriculture, Patton said. Kids Now and the work of the Kentucky Agricultural Development Board were funded from Kentucky's share of a national tobacco settlement. [Lexington Herald-Leader, Dec. 15, 2001]

• 12/7: Some western Kentucky farmers will receive funds from the state's Tobacco Settlement Trust to begin projects aimed at lessening dependence on tobacco production. The money from the state's portion of the tobacco settlement is earmarked at 65 percent for regional and statewide projects and 35 percent for projects in individual counties based on their tobacco dependence, said Penny Cline, spokeswoman for the agricultural policy office. "Usually the state dollars are given to projects that have a more regional effect," she said. One of the largest awards in the state, about $940,000 in grants and a $3.8 million low-interest loan, will go to Ballard, Calloway, Graves and Hickman counties to start the Kentucky West Nursery Co-op, which will grow ornamental trees for the wholesale nursery market. [Associated Press, Dec. 7, 2001]

• 12/4: Now in its second year, KIDS NOW -- an effort to improve the health and welfare of pregnant women, infants and young children -- is rapidly expanding and starting to show results, its backers say. For that reason, they say the program must be spared further budget cuts as Gov. Paul Patton's administration and lawmakers face a deficit and growing demand to fund other programs. KIDS NOW gave $10 million in unspent money to the administration in its first year to help with the state budget deficit. But Burch said that was a one-time cut and the program will need all its money to provide services as it grows. But because KIDS NOW is funded through Kentucky's $360 million share of the federal tobacco settlement, advocates fear some lawmakers may be eyeing it as state revenue shrinks. Under state law, KIDS NOW gets 25 percent of the state's share of the tobacco money, or an estimated $31 million annually for the next two years. A plan to provide insurance to chronically ill people gets 25 percent and the rest goes to agriculture. Workers, most through the local health departments, visit pregnant women at home to help make sure they are receiving prenatal care and to encourage them to avoid smoking, alcohol and drugs. [The Courier-Journal, Dec. 4, 2001]

• 11/27: Although the federal Centers for Disease Control and Prevention in Atlanta reported earlier this month that smoking rates in middle and high schools are leveling off nationally, substantial numbers of students and adults continue to smoke. And in most categories, Kentucky and Indiana post numbers higher than national averages. Kentucky's adult smoking rate is 30.5 percent, highest in the nation. In Indiana, about 27 percent of adults smoke, the fourth highest nationally. Both states also top national figures in the estimated numbers of high school smokers. But while those statistical profiles are similar, Kentucky and Indiana have taken divergent approaches to lowering the numbers. Kentucky is using only a small fraction of its tobacco settlement payments on smoking prevention, while Indiana is committing a much larger sum, and has set up a new state agency to distribute the money. Over a two-year period, Kentucky has earmarked about $5.5 million for curbing tobacco use, an amount that critics contend isn't enough to make a dent. ''We have the greatest need, but we are so underfunded,'' said Lynn-Carol Birgmann, head of an anti-smoking coalition called Kentucky Action. The $2.5 million Kentucky has committed this year is about 15 percent of the amount the CDC says is needed for an effective program; the CDC ranks Kentucky 36th in tobacco-control funding nationally. [The Courier Journal, Nov. 26, 2001]

• 11/15: About 50 smokers with health problems are trying to stake a claim to a part of Kentucky's share of a national tobacco settlement. The attorney general's office is opposing the attempt. A Franklin Circuit Court judge denied the group's motion to intervene in the state's suit against tobacco companies. The Kentucky Supreme Court heard arguments on that issue today at the Capitol. Assistant Attorney General Brent Irvin says the smokers can't join in the state's lawsuit. Irvin says they should sue cigarette companies on their own. [WCHS-TV8, Nov. 14, 2001]

• 11/1: The state has "stumbled" in early efforts to distribute half of Kentucky's tobacco settlement money to farmers, the executive director of the board charged with that job said yesterday. ``Yeah, it's been a struggle,'' said John-Mark Hack, executive director of the Agricultural Development Board, told the Governor's Commission on Family Farms. ``But let's take a step back and see what we've done. Look at what the foundation we've laid is going to mean for long-term positive change for Kentucky agriculture.'' Hack said that in the last 10 months: 45.5 percent, or $28,828,193 of the $63,257,500 available for state projects, had been allocated by the Kentucky Agricultural Development Board; 35 percent, or $17,184,829.19 of the $49,087,500 available to individual counties, had been allocated. Since Jan. 1, 692 proposals have been received and 285 have been approved. The Agricultural Development Board was established by the General Assembly in 1999 to distribute more than $180 million, with more than a third of it already earmarked. [Lexington Herald-Leader, Nov. 1, 2001]

• As of July 4th, Kentucky lawmakers have allocated $2.5 million for FY2002 and $3 million for FY2003 to the Department of Public Health for TOBACCO CESSATION AND PREVENTION; this is an increase from FY2001. In addition, $2.5 million will be given in both FY2002 and FY2003 to the Kentucky Agency for Substance Abuse Policy (KY ASAP) Smoking Cessation Program. Both of these programs will be funded by tobacco settlement money. The CDC recommends that Kentucky spend $25 million annually on tobacco cessation and prevention. [Tobacco Free Press, June 22, 2001]

• On June 19th, the Department of Public Health will hold public hearings on funding for smoking cessation. The hearing will discuss the spending of funds appropriated by the 2000 General Assembly from the Tobacco Master Settlement Agreement to the Cabinet for Health Services for its Tobacco Use Prevention and Cessation Program. [Cincinnati Enquirer June 16, 2001]

• On December 12th, the Kentucky Tobacco Settlement Trust Corporation voted to meet in the next 30 days to examine how to make payments out of the Phase II settlement funds to quota holders and farmers. Last year about $114 million was paid out, and this year is expected to see a similar amount paid. The issue that has come up is that the anticipation of these Phase II payments to quota holders has driven up the price of quota leases. Therefore, the Trust will examine whether they should develop a different payment formula. [Lexington Herald Leader, December 13, 2000]

• On November 16th, a news report stated that the lawsuit brought by Kentucky Medicaid recipients to obtain a share of the tobacco settlement funds had been dismissed recently. The suit, like ones filed in a number of other states, claimed that any settlement funds over and above what the state actually spent on tobacco related health care costs of recipients should go to the recipients. This case was dismissed, as have all other such cases so far, based on a sovereign immunity defense that says the state cannot be sued by people seeking money damages. [Hartford (CT) Advocate, November 16, 2000]

• On September 15th, the state announced that applications for the second round of Phase II tobacco settlement payments directly to tobacco farmers, quota holders and tenant farmers will be mailed out during the week of September 18th. About $84 million of Phase II funds will be available this year, versus about $109 million that was paid out last year. However, the legislature also allocated this year an additional $40 million for this purpose, with that money coming out of the regular tobacco settlement funds the state will receive this year. Applications for the funds will be due on October 31, 2000. [Messenger Inquirer, September 16, 2000]

• Contrary to reports earlier (see below) which suggested that over $9 million in settlement funds would be available over the next two years for TOBACCO CONTROL programs, the state Department of Public Health has now stated that $5.5 million will be available over that two year period for this purpose. Much of the money will go to local health departments to implement various tobacco control programs to reduce smoking among both youths and adults as well as secondhand smoke. The local health departments will be asked to submit their plans to the state by January 1, 2001 to obtain the funds. Kentucky ACTION said they were pleased the money would go to local health agencies, but disappointed that the amount was so low. In addition, the state Health Department said that $5 million of settlement funds would be available for the new Kentucky Agency of Substance Abuse Policy within the governor's office, and that this money would address alcohol, tobacco and illicit drugs. The substance abuse program will be based on legislation sponsored by Senate President David Williams (R). [Louisville Courier-Journal, May 2, 2000]

• Before adjourning on April 14th, the legislature enacted bills allocating all the settlement funds, as follows: passed HB 611 (see below) which allocated 50% of the settlement funds to tobacco farmers and agriculture; passed another bill which allocates 25% of the total settlement funds to early childhood development programs, including health screening and other preventive health programs; and, passed House Bill 517 which dealt with the remaining 25% of the settlement funds. House Bill 517 does the following: establishes the Kentucky Access Fund which will oversee a new health insurance program for persons with costly health conditions, utilizing 70% of the remaining 25% of the total settlement funds; directs that 20% of the remaining 25% of the funds go for lung cancer research at the University of Louisville and the University of Kentucky; and allocates the other 10% of the remaining 25% of the funds (i.e., 2.5% of the total settlement funds the state will receive) for TOBACCO PREVENTION PROGRAMS TARGETED AT YOUTH. The youth prevention plan will include prevention and cessation programs as well as programs targeting secondhand smoke, using the CDC model. If, as expected, the state receives about $350 million over the next 2 years, this should mean about $8.75 million should go for the YOUTH TOBACCO PREVENTION & CESSATION PROGRAMS over two years. The governor is expected to sign all these bills. [Messenger-Inquirer, April 23 & 24, 2000]

• Taking care of tobacco farmers before other matters concerning the settlement funds, on April 14th, the House and Senate passed HB 611 which allocates the 50% of the settlement funds which will go to farmers and agriculture. Under the bill, 35% of this half of the settlement funds will go to the counties to dispense and the other 65% will be allocated by a state board. Governor Patton has also agreed to this plan. HB 611 does include language saying that expenditure of the money going to the counties will have to be approved by the state board after the counties submit plans to the board. The plan includes the provisions that the first $40 million of the current payments will go to supplement the Phase II payments to tobacco farmers, but says that this will be a one-time allocation. [Messenger-Inquirer, April 15, 2000]

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LOUISIANA

Total: $4.4 billion; 1st paymt $54.1 million; 2nd paymt $144.6 million

• 4/2: Millions of dollars will soon be on the way for school systems across the state to split, thanks to a fund created with money from a tobacco lawsuit settlement. The money comes from the Education Excellence Fund created when the state sold to prospectors part of the multibillion-dollar settlement of a lawsuit against tobacco companies. The House and Senate Education committees Wednesday approved the plans for spending or retaining the money, which by law is required for the funds to be dispersed. [Lafayette Daily Advertiser, April 1, 2004]

• 2/24: A $17.8 million share of the state's settlement with tobacco companies was given to Louisiana public schools Friday, ending months of legal wrangling. The Legislature originally allocated the money to private and parochial schools, but the state Supreme Court blocked the allocation in June 2003, siding with the East Baton Rouge and Calcasieu school boards, which said the money should only go to public schools. The money had been held in escrow pending the end of the lawsuit. The state education department now can spend the dollars after receiving approval from a legislative budget committee Friday. [The Associated Press, Feb. 21, 2004]

• 6/13: A chunk of Louisiana's legal settlement with the nation's tobacco companies could be used to rebuild Louisiana's fragile coastline under a proposed constitutional amendment unanimously approved Monday by the Senate. The state two years ago sold 60 percent of an almost $4 billion settlement to be paid out over 25 years, yielding more than $1 billion in up-front money for a trust fund that helps pay for education, health care and the state's college scholarship program. If lawmakers ever decide to sell the remainder of the settlement, Sen. Jay Dardenne, R-Baton Rouge, said Senate Bill 213 would deposit 20 percent of that into a dedicated fund to help pay some of the costs of restoring the state's disappearing wetlands. The amendment, along with the companion measure SB 504, now heads to the House. [New Orleans Times Picayune, June 10, 2003]

• 7/19: Saying the decision seemed obvious, Terrebonne Parish School Board members voted unanimously Tuesday to throw their support behind a lawsuit by two Louisiana school systems that accuses the state of giving $17.5 million in tobacco-settlement money to undeserving private and parochial schools. The Calcasieu and East Baton Rouge Parish school boards sued the state for the money last week in a retaliation predicted weeks before by public-school advocates across the state. [Houma Courier, July 18, 2002]

• 5/8: Louisiana should spend more of its tobacco settlement money on programs that persuade children not to smoke cigarettes, Mississippi Attorney General Michael Moore urged a House panel Monday. "Remember what the fight was about," said Moore, the lead attorney general on the 46-state lawsuit against tobacco companies. Moore lamented that four years after the states signed a $246 billion settlement with the tobacco industry, most of them are using the money to fill budget gaps -- not on programs designed to help smokers stop and prevent new ones from starting. Louisiana earned $1.2 billion last year by selling 60 percent of its tobacco settlement for 50 cents on the dollar, a move to protect the state in case the tobacco companies eventually go broke. The state will continue to collect the remaining $2.2 billion over 25 years. It puts its tobacco money in trust funds geared to health care and education but has spent only about $500,000 a year directly on reducing smoking. [New Orleans Times Picayune, May 7, 2002]

• 10/30: Sixty percent of Louisiana's tobacco settlement goes on sale this week, in an attempt to get up front cash rather than risk tobacco companies going belly-up later and not paying their bills. Bear Stearns, the New York financial manager of the state's sale of tobacco bonds, believes Louisiana can get about 50 cents on the dollar, about $1.2 billion, for trust funds established by voters for education, health care and other purposes. But the sale must be done soon, the company warns, because about $3 billion worth of tobacco settlements from other states and municipalities go on sale this fall and threaten to saturate the market. [Associated Press, Oct. 28, 2001]

• 10/27: Too little of Louisiana's multibillion-dollar tobacco settlement is being spent to actively combat cancer and other health problems related to smoking, Gov. Mike Foster's chief of staff, Stephen Perry, said Thursday. So the governor will ask the Legislature to use some of the money to finance a $150 million program to help LSU Health Science Center fight disease, Perry said. "We know the impact of tobacco on our citizens," Perry said, noting high cancer, respiratory and other problems among state citizens. "We have not made the investment into the health sciences that we should have." [Baton Rouge Advocate, Oct. 26, 2001]

• 10/18: State officials have reached a tentative agreement that plugs holes in bond documents outlining how a $1.2 billion tobacco bond sale should be conducted later this month. Attorney General Richard Ieyoub said he has recommended new language that he believes protects the state from having to guarantee millions of dollars in annual payments to investors who buy the bonds. A prospectus outlining the proposed sale will go out to potential investors today. The state will collect an estimated $1.2 billion from the sale, which is now scheduled to take place the week of Oct. 29, a week later than originally planned. State Treasurer John Kennedy said declining interest rates and other factors will reduce the funds the state will reap from the sale by $21.4 million initially. The take now will be $1,206,375,000, officials said. [Baton Rouge Advocate, Oct. 17, 2001]

• 10/15: Squabbles over legal language in bond documents may delay a planned Oct. 22 tobacco bond sale designed to raise $1.2 billion in immediate cash for the state. The disagreement has already delayed the mail-out of a prospectus to potential investors, officials said. Attorney General Richard Ieyoub said Friday that legal documents prepared for his signature as part of the bond deal put the state at risk of guaranteeing millions of dollars in payments to investors annually - a situation the state wants to avoid. Such a "guarantee" means Louisiana taxpayers might have to fork over annual payments to investors as a last resort. "We had no notice this issue might arise," Ieyoub said, adding that negotiations continued Friday with Wall Street and local attorneys crafting the bond deal to solve the problem. Ieyoub said he is afraid a lawsuit filed several months ago in Lake Charles challenging legal fees in the national tobacco case could disrupt the flow of tobacco settlement payments to Louisiana and affect the pending $1.2 billion bond deal. That lawsuit, filed by Loyola University of New Orleans law professor Dane Ciolino, is on appeal and could go to the State Supreme Court at some point, the attorney general said. Ciolino, who teaches legal ethics, maintains that the $575 million in legal fees paid to 13 law firms hired by Ieyoub's office in the tobacco case were too high. [Baton Rouge Advocate, Oct. 13, 2001]

• 10/10: On Tuesday October 9, 2001 a judge approved the sale of tobacco settlement bonds to give Louisiana up to $1.5 billion immediate cash. State District Judge Mike McDonald signed a judgement declaring the bonds sale legal. The state Bond Commission gave approval last week to deal in which the state will pledge about $2.4 billion in long-term tobacco settlement cash to pay off a major bond is-sue. Louisiana is one of 46 states and several U.S. territories sharing in a long-term settlement of lawsuits over the public cost treating tobacco-related illnesses. [The Advocate, Oct. 10, 2001]

• On June 11th, by a 32-5 vote, the Senate passed Senate Bill 632,which would allow the state to sell up to 60 percent of its tobacco settlement funds for cash up front. Debate was brief in the Senate, which had passed the bill earlier in the session. The House raised the ante, taking Senator Dardenne's original proposal to permit the sale of as much as 40 percent of the settlement and changing it to a maximum of 60 percent. The bill returned to the Senate for concurrence in House amendments. The sale, State Treasurer John Kennedy said, could happen as early as September or October. Dardenne's bill authorizes but does not require the commission to sell as much as 60 percent of the settlement to investors who will be betting that the tobacco companies will make the annual payments on schedule. The bill now waits final approval by Governor Foster. [The Times-Picayune, June 12, 2001]

• On June 4th, members of the House Ways and Means Committee agreed to allow the sale of up to 60 percent of the tobacco settlement fund. Last month, the Senate passed SB632 which would allow the sale of up to 40 percent of the settlement fund. The bill was sponsored by Senator Jay Dardenne and would put almost all of the proceeds of the sale into trust funds approved by voters in 1999 dedicated to health care, local school systems, and the state's free college tuition program. But the Senate's measure would allow up to $50 million of the sale proceeds to be spent to make sure the sale does not cut into tobacco money earmarked for the 2001-2002 state budget. The Senate bill now moves to the full House. [The Advocate, June 5, 2001]

• On May 30th, the state Board of Regents announced the awarding of tobacco settlement funds in the amount of $7.7 million in first year grants. The Regents, under law, have the authority to evaluate scientific research programs and award a portion of the state's settlement funds. Of the $7.7 million, only about $400,000 is likely to be spent in the first year on TOBACCO PREVENTION-RELATED PROJECTS, as follows: a 5-year grant of $1.55 million (about $310,000 per year) will go to a Tulane Medical Center researcher to prevent smoking among high school students and will involve the Acadiana Coalition of Teens Against Tobacco; and a 4-year grant of $339,493 will fund a study by an LSU professor of mass communications n why college students smoke and how they can be helped to quit. All the other funds awarded are for a variety of research project, including: a 6-year study to identify genes that could control or prevent obesity, receiving $1.3 million this year and $6 million over 5 years; a grant of $1.05 million this year and $4.8 million over 5 years to create a center of excellence in oral health and craniofacial medicine; A grant of $1.45 million this year and $4.15 million over 5 years to study the genetic makeup of Acadians to better understand Usher's Syndrome which causes deafness at birth and gradual loss of eyesight; and a number of additional grants to study or treat occupational injuries, lung diseases, eye function and gastric cancers. [The Advocate Online, May 30, 2000]

• On March 20th, Administration Commissioner Mark Drennen announced that the $2.5 million earlier allocated for TOBACCO PREVENTION & CESSATION PROGRAMS for the current fiscal year would not be available because the state is going to get $14 million less in settlement payments than originally expected. Drennen said that the state will spend just over $100 million in settlement funds on the Medicaid program (not clear if this is new money or settlement funds that will replace other state revenues that would have gone for this purpose). Drennen said that it was better to use the settlement funds for this purpose because the state gets $7 from the federal government for every $3 it puts into the Medicaid program. TOBACCO CONTROL ADVOCATES decried the cut in the tobacco prevention program, which will now possibly get no more than $500,000 next fiscal year. Other programs which were not cut include the following: $4.2 million for school-based health clinics and $10 million to match private endowments for professorships at state colleges. Other programs which were cut include: $2.5 million for bridge repairs, $1.5 million for genetics research, and $2.3 million for parish health units. Meanwhile, key legislators and Drennen are looking at whether to support a constitutional amendment which would allow the state to issue bonds backed by settlement funds in order to get more money up-front; such a plan could be introduced shortly so the special legislative session could take it up in the next week or so. [The Advocate Online, March 21, 2000]

• By a two to one margin, voters approved a constitutional amendment that spells out where the settlement funds will go. Virtually all the money will go into two funds which are devoted to health and education programs. See note below for details. The legislature will still have some discretion over specifically how the funds are spent each year. As noted below, it appears that some of the money in the funds will be available for TOBACCO PREVENTION AND CESSATION PROGRAMS and for TREATING TOBACCO-RELATED ILLNESSES, INCLUDING AMONG ELDERS. [Yahoo News, Oct. 25, 1999]

• While the legislature has proposed that most of the settlement funds go into trust funds for education and health care (see below), they did vote to earmark $199 million during the 1999-2000 fiscal year for health care and education programs, with about $101 million to go to the Medicaid program to pay for health care for the poor, including many ELDERLY. [The Advocate Online, Sept. 6, 1999]

• The legislature ended its session on June 21st, but not before passing a plan for allocating the settlement funds. The plan must now go to the voters on October 23rd as a constitutional amendment; if approved, the plan goes into effect, and if not, it goes back to the legislature for another try. The plan passed both houses easily after weeks of negotiations. Under the plan, the settlement funds will go to one of two funds, the Millennium Trust or the Louisiana Fund. The permanent Millennium Trust will receive 45% of the tobacco funds in the 2000-01 fiscal year, 60% in 2001-02 and 75% in 2002-03 and subsequent years; only interest earnings from this fund will be available for spending. These earning will be split evenly among three funds: a Health Excellence Fund dedicated to children's health programs, to grants for innovative health care sciences, and to comprehensive chronic disease management services; to the TOPS Fund for tuition aid for Louisiana college students; and to an Education Excellence Fund for funding of elementary and secondary education across the state. The Louisiana Fund will receive the funds not going to the Millennium Trust, and these funds will be able to be spent each year, but the money must go to health care and education initiatives, especially for children, and for TREATING TOBACCO-RELATED ILLNESSES (presumably this would help ELDERS), and for ANTI-SMOKING PROGRAMS. [Advocate Online, June 22, 1999]

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MAINE

Total: $1.5 billion; 1st paymt $18.5 million; 2nd paymt $49.3 million

• 11/1: Health advocates Wednesday praised the state of Maine's efforts to discourage smoking. Maine was called a national leader by the Campaign for Tobacco-Free Kids. According to the Maine Coalition on Smoking or Health, Maine will spend more than $15 million this year on tobacco control programs. The money comes from Maine's share of the national tobacco settlement. [Associated Press, Oct. 31, 2002]

• 7/23: Massachusetts is "one of the most disappointing states" in the nation because the state's leaders are slashing funding for its highly successful tobacco prevention program, according to a national report issued today by the American Lung Association, American Cancer Society , American Heart Association and Campaign for Tobacco-Free Kids. The public health groups urged Gov. Jane Swift and the Legislature to restore funding for the program and ensure Massachusetts remains the nation's leader in tobacco prevention. According to the new report, Massachusetts will fall from first to seventh in the nation in its funding of tobacco prevention if the state's leaders stick with plans to cut prevention funding by 35 percent, from $48 million in the Fiscal Year 2002 budget to $31 million in the FY2003 budget just approved by a legislative conference committee. If the cuts are enacted, Massachusetts would be spending 88.5 percent of the minimum amount -- $35 million -- that the U.S. Centers for Disease Control and Prevention (CDC) recommends the state spend for tobacco prevention. Gov. Swift, who used her budget authority to cut $17 million from the FY2002 budget for tobacco prevention, could make further cuts in FY2003 as well. Massachusetts is also considering selling ("securitizing") about 30 percent of its future tobacco settlement payments to investors for an up-front payment this year to help balance the budget, a move that would reduce the amount of settlement money available to fund tobacco prevention in the future. [U.S. Newswire, July 22, 2002]

• 4/23: Maine got about $4 million more than expected in tobacco settlement payments last week. And more money is on the way later this week. "In February I had projected we would get about $35.6 million in April," said State Treasurer Dale McCormick on Friday. "We actually got about $39.6 million, and we expect another wire transfer of something around $792,000." McCormick had told the State Revenue Forecasting Commission in February that a dispute with Brown & Williamson Tobacco Co., would lead to lower than originally projected payments under the settlement agreements for 2002. The dispute was unexpectedly settled late last month. [Lewiston Sun Journal, April 22, 2002]

• 1/13: A 36 percent reduction in teen smoking proves the value of state health programs funded by tobacco-lawsuit settlement money, health advocates said Tuesday as they urged lawmakers to spare the Fund for a Healthy Maine from the budget cleaver. "If programs that are well-funded are cut back, we know that the progress that has been made will be stalled or reversed," said William Corr, executive director of the Campaign for Tobacco-Free Kids. "Big tobacco will continue to be targeting out kids," Corr warned those attending a State House rally shortly after Governor Angus King unveiled his supplemental budget. "Stay the course. You are the nation's leader. Don't stop now." In his proposed budget, King seeks to cut those programs in the Fund for a Healthy Maine by $1.3 million. Also, the budget seeks to divert $13.4 million the programs have not yet received because of their late startups. Children's nutrition, prescription drugs, health education, child care and substance abuse are among the other services in the Fund for a Healthy Maine, which is supported by the roughly $55 million coming to Maine annually from the tobacco lawsuit settlement. [Central Maine Morning Sentinel, Jan. 9, 2002]

• 1/10: Governor Angus King unveiled $272 million in budget adjustments Tuesday that would cut millions of dollars from a wide range of social services, including Medicaid and health-care programs funded by the settlement of a multi-state lawsuit against the tobacco industry. King would take $9.4 million in unspent money from the Fund for a Healthy Maine this year and $3.9 million next year. He also would reduce next year's funding for those programs by $1.3 million. He would not be alone in doing so. Michigan, Tennessee, Wisconsin and Missouri have tapped tobacco funds to help balance their budgets, and the idea also has been proposed in Massachusetts, Indiana, Ohio, Arkansas, Connecticut and Minnesota, according to national groups that follow such issues. [Portland Press-Herald, Jan. 9, 2002]

• By the end of next June, Maine will have spent just over $32 million from the tobacco settlement to fund its campaign to REDUCE AND PREVENT TOBACCO USE in the state. Dr. Dora Ann Mills, the state's Bureau of Health director, said that settlement money is small change compared to the riches the tobacco industry lavishes on advertising. Still, despite the David versus Goliath nature of the battle, Mills said Maine already has made progress in the fight. Mills said studies have shown a 27 percent decline in youth smoking (children 14-18) in Maine between 1997 and 1999. Next week the state will unveil a media campaign against tobacco use developed by Maine children „part of a larger media initiative with the same goal. That campaign is part of a four-pronged program to combat smoking. Mills said the state also will unveil a smoking-cessation plan in September. But the fourth and possibly most influential component of the initiative is the community-intervention aspect. In an effort to more strategically target health issues, the state formed 30 Campaign for a Healthy Maine sites. Terry Bourassa, one of the site's project director, said the objective is to form a coalition of nonprofit agencies, schools, health-care providers, business people and other community members dedicated to the cause. Lauren Walsh, executive director of the social agency Families First, said organization is critical to the effort to combat tobacco use, especially if campaign organizers have less money to work with in the future. [Central Maine Morning Sentinel, August 21, 2001]

• The supplemental budget passed and signed on April 25th allocated about $100 million of the initial settlement payments, thereby repealing and revising the allocations voted last year which were scheduled to take effect on July 1, 2000 (see below). Because the state expects to average about $55 million annually in settlement payments, some of the funds appropriated were for one-time projects, including some for the Medicaid shortfall, and $25.54 million was placed in a reserve fund for use in future years if settlement payments decrease. The big news is that TOBACCO CONTROL and AGING ADVOCATES scored major victories. The PRESCRIPTION DRUG PROGRAM FOR ELDERS received $10 million for the fiscal year covering July 1, 2000 through June 30, 2001; this is an additional $5 million beyond the $5 million the legislature had voted earlier for this program for needy elders. TOBACCO CONTROL PROGRAMS received a total of about $21.8 million, of which about $18.3 million is settlement funds and $3.5 million is federal Medicaid funds. The comprehensive TOBACCO CONTROL program will be allocated as follows: $8.35 million for Community and School-based grants (to reduce tobacco addiction, physical inactivity, poor nutrition, secondary and tertiary prevention); $1.2 million for program evaluation; $6.75 million for smoking cessation and statewide multi-media campaigns to reduce tobacco use; $200,000 for staff at the state Bureau of Health; $1.8 million for prevention and treatment of tobacco-related diseases for those with Medicaid; and $3.5 million of federal Medicaid funds for the same purposes as the $1.8 million. Settlement funds were also allocated for expansion of child care services, for Medicaid, for health insuracne for the poor, and for related programs. Great credit goes to House Speaker G. Steven Rowe (D) for his leadership throughout this session on this issue, as well as to Governor Angus King (I) for his commitment to a healthy Maine. And, congratulations to the advocates!! [Portland Press Herald, April 30, 2000, and TCSG contacts in Maine, May 1, 2000]

• While it is still a bit difficult ferreting out what the legislature did on the settlement funds allocation before adjourning for the year, it seems clear that they allocated $5 million of the first $18.5 million payment for the PRESCRIPTION DRUG PROGRAM FOR THE ELDERLY, or a 27% share of the total. Further, $3.5 million was allocated for the TOBACCO CONTROL PROGRAM, although it appears that this may have been a substitution -- or shell game -- for general revenue funds in that amount that had been appropriated in the prior year for this purpose. It appears that the settlement funds have been placed in the Fund for a Healthy Maine for distribution from that fund as the legislature determines each year. The remaining funds appear to have gone for Medicaid and/or other health-related programs. More later on this as it becomes more clear. [TCSG sources in Maine, July 16, 1999]

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MARYLAND

Total: $4.4 billion; 1st paymt $54.3 million; 2nd paymt $144.9 million

• 10/7: In his Sept. 25 column, "Maryland's tobacco policy isn't good for anyone's health," Jay Hancock criticizes municipalities for "blowing" tobacco settlement funds. He cites as an example the "Cadillac model" smoking cessation program we in Howard County have successfully established over the past year. With the CDC reporting that the cost savings from reduced tobacco use due to cessation interventions would more than pay for those interventions within three to four years, Mr. Hancock's conclusion that "there are better ways to spend the money" demonstrates his ignorance of accepted tobacco policy and the research behind it. The investment Howard has made by supporting a cessation program based on best practices will not only benefit the health of its employees and citizens, but also save money in time lost from work, lost wages, and insurance costs. Shortsighted remarks by Mr. Hancock serve no one. [Baltimore Sun, Sept. 6, 2002]

• 9/27: LAST WEEK, children at Brookfield Christian School in Clarksville watched a puppet show about the dangers of tobacco presented by the "Wee Won't Smoke Program." A collaboration between two Howard County agencies, the program is designed to teach children about the damage that cigarette smoking can do. "We're trying to get the message out to the very young," said Caren Logan-Absalom of the Howard County Child Care Resource Center. Debbie Yare of the Howard County Department of Citizen Services had an idea that money from the Maryland Cigarette Restitution Fund Program could be used to create puppet shows for preschool children. She contacted the Child Care Resource Center and the Howard County Health Department. "She thought this would be a good avenue to reach young children," Logan-Absalom said. Shanta Williams, director of tobacco control at the Health Department, was glad to have the opportunity to get the message to youngsters. [Baltimore Sun, Sept. 26, 2002]

• 7/13: If you've been baffled by the 100 billboards scattered around Maryland that bear only a single inscrutable word - "HERE" - then you have gone for the first bait in the biggest anti-smoking media blitz in state history. Today the puzzling message will be replaced by photos of peppy, smiling Marylanders, a welcome message tailored to the community where each billboard stands and the campaign's slogan: "Smoking Stops Here." The 17-month first phase of the campaign will cost $14 million, which will come from the state's tobacco settlement, said J.B. Hanson, a spokesman for the state Department of Health and Mental Hygiene. If studies show that the ads are prompting teen-agers and young adults to quit smoking, an additional $40 million would be spent over four years, he said. The campaign, to be launched by Gov. Parris N. Glendening at a news conference in Annapolis today, will start with television ads, billboards and a Web site (www.smokingstopshere.com). It will ultimately plant its slogans on everything from license plate frames to mouse pads, stealing the same marketing tactics the tobacco industry has used for years. "I think these ads are going to work because they feel like a movement," says Jeff Millman, creative director at GKV Communications, the Baltimore advertising agency leading the effort. "It's not preaching to smokers or kids. It's one part social marketing and one part political campaign." [Baltimore Sun, July 12, 2002]

• 6/17: Millions of dollars in tobacco settlement funds for programs to help smokers have gone unspent because of the state's inability to quickly distribute the money, officials say. Counties returned $8.9 million in settlement funds they were unable to spend in fiscal year 2000-2001, the first year of the program. Maryland doled out $19.4 million during that year. [USA Today, June 17, 2002]

• 4/25: The state Board of Public Works unanimously approved a negotiated settlement yesterday that will pay attorney Peter G. Angelos $150 million over five years for his work on Maryland's lawsuit against the tobacco industry. "I think this is truly a win for everybody," said Gov. Parris N. Glendening, one of three members of the public works board. The agreement frees money that had been diverted by court order into an escrow account pending an end of the fee dispute, allowing the state to restore funds for smoking cessation and anti-cancer programs, the governor said. [Baltimore Sun, April 25, 2002]

• 3/25: One day after receiving news of a windfall of $100 million in tobacco settlement funds, the Maryland House of Delegates gave preliminary approval to a budget that would direct most of that money to anti-smoking programs and the state's sizable Medicaid deficit. The $21.6 billion House budget, which is expected to receive final approval Tuesday, closely resembles the one passed by the Senate last week. It confirms the General Assembly's intention to thwart Gov. Parris N. Glendening's efforts to stall the final phase of a promised 10-percent income tax cut. Both versions also scale back significantly the funding that Glendening (D) proposed for his signature environmental and higher education initiatives. As the legislature heads into its final two weeks, these decisions set the stage for a clash with the governor that could ultimately focus on how they spend budget funds freed up by the surprise infusion of tobacco-company cash. [The Washington Post, March 24, 2002

• 3/21: Tobacco growers gathered at Planter's Tobacco Warehouse here and at four other sales barns in Southern Maryland yesterday, looking for a sign that this year's auction would not be the state's last. Many farmers were seeking a signal from buyers, especially those representing tobacco companies in Switzerland and Germany, that interest is still strong in the Maryland Type 32 leaf grown throughout the region. But the hoped-for signal didn't come yesterday. A 10-cent-a-pound price increase over last year would have been the encouragement the growers needed to reject a lucrative state buyout and continue growing a crop that has been a large part of Maryland history for nearly 370 years. As late as the mid-1960s, tobacco was considered the backbone of Southern Maryland's economy. "It has been a little disappointing," auctioneer Bob Cage said. [Baltimore Sun, March 20, 2002]

• 3/18: More than $70 million has been distributed throughout Maryland this year to reduce tobacco use. Carroll's share of that money, from the state's Cigarette Restitution Fund, is also allowing Mary Ellen Jaeger to fight colon cancer across the county. Money from the Cigarette Restitution Fund is used for two different programs in Carroll County: One program is aimed at controlling colorectal cancer through free screenings; the second program's goal is to reduce smoking in the county by educating students and sellers of cigarettes, as well as providing cessation classes. Colorectal cancer is the second-leading cause of cancer death in the United States. [Carroll County Times, March 16, 2002]

• 1/19: Using money from the state's share of the national tobacco settlement, the council this month plans to choose among several interested consulting firms to explore a project tentatively called "The Everything Southern Maryland Marketplace and Restaurant." The details are to be determined, but the council believes such a complex might help local farmers make the transition from tobacco to other crops by creating more marketing opportunities. It could also help tourism by showcasing local products and specialties, said Christine Bergmark, director of agricultural development for the council. "We're looking at this as another outlet for farmers, a step beyond a farmers market. There's not a lot of infrastructure support to help growers transition from tobacco." [The Washington Post, Jan. 17, 2002]

• 1/13: Millionaire Baltimore lawyer Peter G. Angelos has offered to drastically reduce his fee for representing Maryland in the national lawsuit against cigarette makers, shrinking his demand for $1 billion to about $250 million over the next six years. The offer, if approved by Gov. Parris N. Glendening (D), would free up millions of dollars that lawmakers have escrowed for Angelos, allowing them to apply the money to a state budget riven by recession. The proposal would end Angelos's lengthy litigation with the state and allow him to receive his money much more quickly than if he were paid in annual installments from the tobacco settlement over the next two decades. One state official characterized Angelos's offer this way: "He will take a lot less, but he gets it upfront." Glendening said he thinks a settlement can be reached before the legislative session ends April 8. He told the Associated Press that Angelos deserved praise for "making significant concessions to get us this far." [The Washington Post, Jan. 10, 2002]

• 12/12: Local governments and community groups working to curb smoking by children - but which lack the legal resources and skills to fend off special interest groups that oppose anti-smoking laws - now have a place to get legal assistance. Yesterday the University of Maryland School of Law formally announced its new Legal Resource Center for Tobacco Regulation, Litigation and Advocacy. Funded by Maryland's share of the multistate tobacco litigation settlement, the center will offer legal help to folks across Maryland working to reduce access to tobacco products. "We spent $50 million in fiscal 2001 on tobacco control and we'll spend $70 million this year," said Carlessia A. Hussein, director of the Maryland Cigarette Restitution Fund, which is funding the new center through a grant from the Department of Health and Mental Hygiene. "Montgomery County just appealed a suit on a smoke-free restaurant law to the Court of Appeals," said Michael Strande, managing attorney of the center. "If the county hired an attorney, we could help them respond to arguments and draft an amicus brief." "The center has trained students at two middle schools on how to conduct stings on retail outlets that sell cigarettes to minors. This kind of initiative is not new to the law school and will not only be an asset to the state, but will help train new lawyers." [Maryland Daily Record, Dec. 12, 2001]

• 9/30: Felisa McCall's job as the new Anne Arundel County minority health director is all about cultural nuances and how they can sometimes stand in the way of getting certain health care programs to communities that need them. Money to fund the Minority Health Initiative and pay the salaries of McCall and two staff members was made available from the Cigarette Restitution Fund, which was set up in 1999 after a settlement between a group of 46 states, including Maryland, and the tobacco industry. This year, the fund has distributed $102.5 million statewide to fight cancer and other tobacco-related illnesses, and to establish programs including smoking-cessation assistance and crop-conversion initiatives for tobacco farmers. Maryland, like many other states, has been slow to realize that minority communities have distinct health care needs. [Baltimore Sun, Sept. 30, 2001]

• On July 30th, officials said that so many Maryland tobacco farmers have agreed to a state buyout that 81 percent of the crop will be gone by next year. Governor Parris Glendening -- who launched the buyout program with the goal of getting Maryland out of the tobacco business -- said the level of participation has exceeded all expectations. Of the 990 farmers eligible for the program, 674 have either taken a buyout or applied to receive one next year. By next year's growing season, there might not be enough crop in Maryland to support the economic infrastructure that sustains the industry. [Baltimore Sun, July 31, 2001]

• On July 19th, statistician Ray Garibay from the Department of Agriculture reported a 70 percent drop in the number of tobacco acres planted this year from last. "Looks like about 1,700 acres this year," he said. "The buyout is really taking its toll." Last year, before the buyout started, Maryland growers worked 5,700 acres of tobacco. After surveying farmers in March, the agriculture department estimated some 2,600 acres would be planted this year, but revised that number downward in June. Tobacco farmers who sign up for the buyout are paid $1 for every pound of tobacco they give up growing; [The Annapolis Capital, July 22, 2001]

• As of the July 15th deadline, 559 farmers (57 percent of those who were eligible) submitted applications for the tobacco buyout program. Farmers who participate in the buyout will receive $1 for every pound of tobacco they give up growing-every year for 10 years. Wilson Freeland, president of the Calvert County farm Bureau expects participation to be around 80 percent for next year. The buyout is funded by the tobacco settlement fund. [Washington Post, July 15, 2001]

• On January 10th, the Maryland legislature returns for the 2001 session, and one of the key items which will be considered is the plan of Governor Glendening (D) to issue $65 million worth of bonds, backed by tobacco settlement funds, to pay tobacco farmers up-front for not growing tobacco. This would be a revision of the plan adopted last year which would have paid the farmers an annual payment each year for ten years. Farmers support this plan, as do many legislators from tobacco growing counties. However, some TOBACCO CONTROL advocates and health groups are now suggesting that bonds should also be issued for TOBACCO PREVENTION AND CESSATION PROGRAMS and for cancer research, so that these programs are certain to receive the full amounts they were promised last year. [Washington Post, January 4, 2001]

• On September 12th, the Tri-County Council for Southern Maryland announced that the state had released $5.3 million for the program to encourage tobacco farmers to stop growing tobacco; an additional $5.75 million will be released later for this purpose. Under this plan, approved by the governor and legislature, tobacco farmers will agree to stop growing tobacco in return for payments equal to $1 for every pound of tobacco they grew in 1998; this could amount to about $50,000 annually for a farmer who grew 30 acres of tobacco. The Council will hold meetings starting the week of September 18th for farmers to learn how to apply for the money. Farmers will be able to sign up for the funds in October and November, with payments to begin in early 2001. [Washington Post, September 17, 2000]

• As of April 9th, the Maryland legislature was putting the final touches on its blueprint for spending the settlement funds. The basic framework has been agreed to and passage of the final plan is expected shortly. Under the plan, largely following the one Governor Glendening proposed, most of the settlement funds will go for about 20 health-related or education programs focused on three main areas: education initiatives such as teacher pay raises, ANTI-TOBACCO PROGRAMS, and a major fight against cancer. Funds will also go to expand drug abuse treatment and to help southern Maryland tobacco farmers to convert to other crops. The plan will not require the governor to spend particular amounts from the settlement funds on specific projects, but will provide a broad plan for its use, with about half the funds earmarked for anti-cancer and ANTI-TOBACCO programs, or about $70 million annually for the next 10 years. Annually the other half of the funds will be allocated by the governor and the legislature for such programs as they decide. The plan would allocate about $400 million over 10 years to cancer-related initiatives, including $15 million annually to Johns Hopkins and the University of Maryland Medical System's Greenebaum Cancer Center, as well as about $15 million annually to local health departments for local cancer prevention and screening efforts targeted to the populations they feel are most in need, including MINORITY POPULATIONS. About $30 million annually for the next 10 years is to go for TOBACCO PREVENTION & CESSATION PROGRAMS, including about $10 million for a statewide media campaign. In addition, through the state budget process, about $35 million of settlement funds will go for teacher pay raises, about $6 million for textbooks for private schools, and $4 million to wire public schools for the Internet. [Baltimore Sun, April 9, 2000]

• Maryland Circuit Court Judge Clifton Gordy ruled on Dec. 30th that 25% of Maryland's settlement funds -- over $1 billion probably -- must be placed in escrow until the state resolves its dispute with attorney Peter Angelos over the contingency fee contract it entered into with him to handle its Medicaid lawsuit against the tobacco companies. The state admits it signed the contract with Angelos to give him 25% of any settlement or judgment, but it now wants him to go to arbitration to get his fees from the tobacco companies. Angelos says a contract is a contract, and the state should pay him what it owes him and then go collect what it can from the tobacco companies. The judge told both sides that no harm would be done to the state by putting the funds in escrow until they settle this matter, saying that this could be done and the governor's settlement plans could still be implemented. A trial date of September, 2000 is set for the case, unless the parties can reach an agreement beforehand. [Washington Post, Dec. 31, 1999]

• The first Phase II payments will go out this month to 507 Maryland tobacco farmers deemed eligible. They will share about $1.1 million in payments, or an average of about $2,000 each, which is about half the amount available this year. A second set of farmers will receive payments in April, 2000. After that, there will be one payment per year to eligible farmers. [AP, Dec. 2, 1999]

• See Highlights section above for note on huge victory for tobacco control advocates when the FY'2000 budget was passed with a 30¢ cigarette tax increase and a provision that $21 MILLION ANNUALLY OF SETTLEMENT FUNDS SHALL GO FOR TOBACCO PREVENTION & CESSATION PROGRAMS. Apparently there is also language requiring that at least 50% of the settlement funds must go for tobacco control, rural health care, uncompensated care and cancer research.

• Maryland will receive an extra $268 million between 2008 and 2018 as its bonus for its work on the initial lawsuit against the tobacco industry and for its work on the settlement negotiations. [Capital News Service 3/15/99]

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MASSACHUSETTS

Total: $7.9 billion; 1st paymt $96.9 million; 2nd paymt $259 million.

• 7/18: The Massachusetts House yesterday handily approved a measure that would pump $110 million of state money into high-tech and biotechnology companies, helping to spur job growth and private investment. The House voted 143-10 in favor of the economic stimulus bill, which would spend $110 million from the state's tobacco settlement money and create several business-friendly capital investment funds and tax credits. Rep. Jay Kaufman, a Lexington Democrat, questioned the wisdom of spending $110 million of the state's scarce dollars on companies who could easily obtain the same funding from private venture capitalists. Health care advocates said the purpose of suing the tobacco companies was to reduce future health care costs from smoking-related illnesses, and that the money should be earmarked solely for antismoking and other health care related programs. [Fitchberg Sentinel & Enterprise, July 16, 2003]

• 2/28: Health advocates led postcard-toting children to the door of Gov. Mitt Romney's office Monday, to ask that a portion of the state's massive settlement with tobacco companies be used to fund antismoking programs. Massachusetts' antismoking programs, once a national model, have been all but eliminated because of budget cuts. Advocates with the Massachusetts Coalition for a Healthy Future asked that Romney divert a part of the state's $730 million annual settlement with the tobacco industry to rebuild the programs. [Feb. 26, 2003, The Upper Cape Codder]

• 2/20: Local officials hope the state's portion of the tobacco settlement can provide a financial lifeline to the town's deficit-ridden nursing home. Under the terms of the $206 billion tobacco settlement, reached in November 1998, Massachusetts would receive $7.5 billion over the next 25 years. [Cape Cod, Feb. 18, 2003]

• 5/31: Swift's bill would use $90 million in tobacco settlement money and up to $310 million from the rainy day fund to cover the new deficit. "We're doing this in order to assure that we can make our local aid payments on June 30," Swift spokesman James Borghesani said. The state received about $304 million in 2001-2002 fiscal year as part of its portion of the 1998 federal tobacco settlement, Borghesani said. This proposal, he said, would tap it out until the new fiscal year begins July 1. The plan, which the Legislature would have to approve, would also transfer an additional $109 million in tobacco settlement money to fill a gap in the state's health care assistance program for children and the elderly. [Associated Press, May 29, 2002]

• 5/21: By a three-to-one margin, Town Meeting voters last night defeated an article to ban smoking in most public places. The intense opposition of restaurant owners fearing business losses, selectmen concerned about enforcement and residents unwilling to forfeit personal freedoms combined to trounce the article 157-53. "We want to stay here. We certainly don't want to be put out of business," said Patti Roland, owner of StoneForge Tavern and Publick House. She said a ban would drive her business into communities that allowed smoking. The proposed bylaw would have included all restaurants, but exempted bars and lounges, private function halls and the dog track. The article was submitted as a citizens' petition Roberta Andresen, who spearheaded the effort, said the proposal would not stop people from smoking but "would stop them from making me a smoker." [Taunton Gazette, May 21, 2002]

• 5/10: A huge chunk of money in the state's tobacco settlement fund could be used by nursing homes to squeeze $145 million out of federal coffers to help curb the closures of homes statewide, lawmakers and healthcare advocates said yesterday. Some State House leaders joined advocates yesterday to pitch a plan that would use tobacco settlement funds temporarily to generate $145 million in matching federal funds for nursing care services throughout the state without increasing state spending, said Charlie Rasmussen, a spokesman for Speaker Thomas Finneran. The tobacco funds would be repaid by the nursing homes when they get user fees owed them by Medicaid. [Business Today (Boston Herald), May 10, 2002]

• 4/16: After yet another grueling budget meeting yesterday, Acting Governor Jane Swift, House Speaker Thomas M. Finneran, and Senate President Thomas F. Birmingham announced they had finally agreed on ways to close the state's current budget gap. To close that gap, they have proposed taking $200 million from the state's rainy-day fund, pulling $60 million from the state's 2002 tobacco settlement payments, and slowing down the state's payments into the pension fund. [Boston Globe, April 16, 2002]

• 4/10: Governor Jane M. Swift has filed an amendment cutting $700 million from the $23.5 billion she proposed spending for the next fiscal year. The governor's latest budget plan includes a $200 million cut in local aid and $115 million in human service agency cuts. It also depends on spending the entire tobacco-settlement fund. [Worcester Telegram & Gazette, April 10, 2002]

• 4/3: Tobacco manufacturers not participating in the national legal settlement with the states would be required to establish and fund escrow accounts under legislation to be unveiled today at the State House. The bill to be filed by Sen. Stanley Rosenberg (D-Amherst) and Rep. Daniel Bosley (D-N. Adams) would prohibit state revenue officials from issuing tax stamps to non-participating manufacturers who have not set up escrow accounts. Rosenberg and Bosley say the escrow accounts are required of non-participating manufacturers under the 1998 master settlement, which awarded billions of dollars to the states as reimbursement for health services rendered over the years to smokers. [Massachusetts News, April 2, 2002]

• 3/16: Acting Gov. Jane Swift proposed using $400 million from the state's Rainy Day Fund in 2002 and cutting spending across the board by 3 to 5 percent in 2003 to solve the state's fiscal crisis. Swift also proposed spending all of the money the state expects to receive from the tobacco settlement estimated at $300 million to balance the budget next year rather than raising taxes. ''Raising taxes should be the last resort, not the first resort,'' Swift said. [Associated Press, March 14, 2002]

• 2/27: Grants to reduce workplace smoking, smoking on campus and to encourage some nightclubs to go smoke free one night a week were among the seven projects funded Tuesday by the Minnesota Partnership for Action Against Tobacco (MPAAT). The $1.7 million in funding focused primarily on education about the effects of second-hand smoke and the implementation of policies to reduce secondhand smoke, as well as providing programs to help people quit smoking. The grants target groups with higher levels of tobacco consumption than the general population -- organized labor, 18-to-24-year-olds and the gay, lesbian, bisexual and transgender community. The funds are for two years. MPAAT has deferred action on four additional grants because they are for advocacy groups and involve lobbying public bodies to adopt smokefree community policies. MPAAT's funding of advocacy groups has been questioned by several state officials. Six of the seven grants that were approved specifically included smoking cessation programs, an original MPAAT mission that critics have said the group has overlooked. [Minneapolis Star Tribune, Feb. 27, 2002]

• 12/19: Overriding an effort by Governor Jane Swift to cut $13 million from the current $44 million tobacco prevention budget, the Massachusetts Legislature voted to INCREASE tobacco prevention funding to $48 million. This was a significant victory and shows that those who have experienced firsthand the benefits of tobacco prevention understand it remains a smart investment even in difficult budget times. [Tobacco Free Kids, Dec. 19, 2001]

• As of November 16th, with tobacco control advocates still smarting from the cut of $12 million in settlement funds from the state TOBACCO PREVENTION & CESSATION budget earlier in the year, news reports showed that some of the settlement funds that had gone to other programs, including health programs, had not been spent. In the past fiscal year, nearly $22 million of settlement funds remained unspent at the end of the year, including about $10 million from the Medicaid agency. Generally when funds are unspent in one fiscal year, they are rolled over to the next fiscal year and either placed in the budget of the same program or reallocated to another program. Advocates wonder why these funds could not have been spent on TOBACCO CONTROL programs, rather than slashing the program by $12 million this year. Advocates also questioned how some of the settlement funds had been allocated previously, including questioning school nurse and fire prevention program funding which had only a minor focus, if any, on smoking prevention. Yet, House Minority Leader Fran Marini (R) said the TOBACCO CONTROL programs probably have too much money already. [Patriot Ledger, November 16, 2000]

• On July 31st, the Massachusetts legislature called it quits for the year. However, before they left, they overturned a number of budget vetoes by Governor Cellucci (R). But, they did not take up the veto of $10.7 million in TOBACCO PREVENTION AND CESSATION funding. Contrary to the comments in the note below, it does appear that this is an actual CUT of $10.7 million in the tobacco control budget of one of the most successful programs in the nation. More on this as we get morinformation. TOBACCO CONTROL ADVOCATES were appalled by the veto and very upset with the absence of an attempt by the legislature to override the veto while they were overriding many other vetoes. [Boston Globe, August 1, 2000]

• On July 28th, Governor Paul Cellucci signed the FY'01 state budget, which includes the tobacco settlement funds. While details in the news were skimpy, the reports and governor's press release did say that a major new PRESCRIPTION DRUG PROGRAM FOR ELDERS, called HOPE, was funded, which would subsidize drug costs of the elderly regardless of income. Signing the budget at a Senior Center, Cellucci also said he had approved spending an additional $42 million for wage increases for NURSING HOME STAFF. In the budget last year, the prescription drug program was funded with settlement funds, and it would appear that the same would be true this fiscal year, but that is unclear at the moment. Cellucci vetoed $10.7 million in funding for TOBACCO PREVENTION & CESSATION PROGRAMS, but news reports suggested, not too clearly, that there was still an increase in this funding of $13 million, although that was not too certain. Tobacco control advocates vowed to fight to override the veto. More on this in coming days. [Boston Globe and Boston Herald, July 29, 2000 & Cellucci press release, July 28, 2000]

• On Nov. 16th, Governor Paul Cellucci (R) signed the FY'2000 budget, including the $42 million in new PRESCRIPTION DRUG FUNDING FOR ELDERS and the $24 million for in-home care for elders (see below and in Highlights). However, the governor vetoed $10 million of the TOBACCO CONTROL FUNDING. Just as rapidly, the Democratic-controlled legislature overrode his veto, and the full $22.8 million of new funding for tobacco control was preserved. This has been a huge victory for aging and tobacco control advocates, after one of the longest legislative sessions in recent memory. [Boston Globe, Nov. 17 & 18, 1999]

• The Massachusetts legislature, on Nov. 10th, approved a $20.87 billion state budget that makes several long-term commitments, including $42 million of new funds for PRESCRIPTION DRUG SUBSIDIES FOR ELDERS, millions for TOBACCO PREVENTION & CESSATION PROGRAMS, and a huge TOBACCO TRUST FUND to be created with 70% of the funds from the tobacco lawsuit settlement with interest to be used for funding future health care programs . The remaining 30% would be given to a variety of health care and TOBACCO CONTROL programs, including the $42 million for ELDERS PRESCRIPTION DRUG PROGRAMS, which includes $22 million to expand the existing drug program for low-income seniors and $20 million for a new program to aid seniors with catastrophic drug costs that consume 10% of more of their income. TOBACCO CONTROL programs should receive 25% of the 30% of the settlement funds, or about $25 million annually, in addition to existing appropriations for this purpose. The legislature also added another $24 million for ELDERLY SERVICES, including $12 million for seniors who lost home health benefits due to U.S. Medicare cutbacks (these funds are not from the settlement). The House approved the plan, 155-2. The Senate vote was 31-4. It now goes to Governor Paul Cellucci, who is expected to veto a few items and return the budget to the legislature by Nov. 16th for final approval or rejection of his vetoes. See article. [Boston Globe 11/11/99]

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MICHIGAN

Total: $8.5 billion; 1st paymt $104.4 million; 2nd paymt $279 million.

• 2/25: Petulant pundit Bill Ballenger is fed up with people who won't pay attention to his miracle fix for Michigan's burgeoning budget crisis. Michigan is facing $108 million in budget cuts now and a possible $2 billion shortfall next year. In the late 1990s, we were one of several states that settled a multibillion-dollar lawsuit with Big Tobacco. Our share of the cash out: something like $8.5 billion, to be paid in $330 million installments over 25 years or so. What Ballenger suggests is "securitizing" that $8.5 billion long-term tobacco settlement, i.e. selling it now at a discount -- say $3 billion, give or take a few million -- and using the onetime windfall to offset Granholm's scheduled budget cuts. A huge Band-Aid, to be sure. But still a Band-Aid. [Feb. 24, 2003, The Detroit News]

• 2/20: The state Department of Treasury Tuesday began mailing letters telling students they are eligible for the $2,500 Michigan Merit Award. Those students passed four subjects -- reading, writing math and science -- of the state's Michigan Educational Assessment Program tests. The long-delayed announcement had been held up since September. Last fall, state officials said they couldn't guarantee the scholarship money because a pending ballot proposal could have diverted $300 million a year in tobacco settlement dollars to anti-smoking programs. A portion of that money funds the scholarships. Voters soundly rejected the proposal in November, but the future remains unclear for the $115 million a year Merit Award program. [Michigan Live, Feb. 19, 2003]

• 10/28: Though both supporters and opponents are uncomfortable with the characterization, Proposal 4 pits education vs. health care. It's a constitutional tug of war between the young and the old, where both sides recognize the value of quality health care and college scholarships, but one side ultimately is going to get pulled into an overburdened state budget while the other is left holding the $300 million prize. Voting yes on the proposal would mean amending the state constitution to require that 90 percent of the state's annual $300 million tobacco settlement payment would go toward health care and anti-smoking efforts. A yes vote also would end $114 million in annual college scholarships for high school students who score well on the Michigan Educational Assessment Program, opponents say. "When we get to the heart of this great debate, so much of it has to do with that the state hasn't funded the Medicaid program and the tobacco money would be a significant help to healing the underfunded Medicaid," said Jay Zrimec, vice president for public affairs for Munson Medical Center, which stands to gain $1.3 million annually by its own estimates under the proposal. [Traverse City Record Eagle, Oct. 27, 2002]

• 10/25: Michigan's $8.5 billion share of the nationwide tobacco settlement should be used to improve health issues. But voting for Proposal 4 is not the way to make that happen. Instead, Michigan voters need to use their voice at the polls to support leaders who will spend settlement money properly. For every dollar Michigan would spend on well-researched anti-tobacco efforts, it saves much more in health care costs. But Proposal 4 would cost the state even more by giving special-interest groups unprecedented control over billions of state dollars. The initiative simply is bad for Michigan's health. [State News, Oct. 24, 2002]

• 10/18: Backers of a ballot issue that would funnel millions of dollars of tobacco settlement money to health care providers have sharply outspent opponents of the measure, according to reports filed Wednesday. Citizens for a Healthy Michigan, which supports the issue, had raised $3.04 million and had spent $2.94 million as of Oct. 8, the end of the reporting period. The group had $95,736 on hand. Opponents said they had raised $266,250, had spent $50,995 and had $215,255 on hand. The two sides are battling over Proposal 4, which will ask Michigan voters how they want to spendthe $300 million a year that the state gets from a 1998 tobacco settlement. [Detroit Free Press, Oct. 17, 2002]

• 10:15: The Michigan Catholic Conference (MCC) announced today that its October issue of FOCUS has been distributed to the 1,150 Catholic parishes and schools throughout the state with a message that Proposal 4 is "Unhealthy for Michigan." FOCUS is the topical publication on public policy matters of concern to the MCC. "Passage of Proposal 4 would cause a dramatic shift in the public policy and constitutional practice of our state," said Paul A. Long, Vice President for Public Policy with the MCC. "As a result, it is necessary to inform Catholic voters about this proposal." Proposal 4 would constitutionally mandate that ninety percent of the $300 million annual tobacco settlement be diverted from the purposes established by the Michigan Legislature and automatically be given each year to hospitals, nursing homes, two private-non-profit corporations and an array of other health related programs. [PR Newswire, Oct. 14, 2002]

• 10/14: Michigan voters will be faced with four proposals on the Nov. 5 ballot. The ballot issue known as Proposal 4 - initiated by the Citizens for a Healthy Michigan Coalition - asks voters to constitutionally appropriate money from the tobacco lawsuit settlement toward health care, research, and smoking prevention programs. Proponents of the proposal say these programs are where the money should have gone all along. opposition says approval of Proposal 4 will tie the hands of future lawmakers and shut down programs such as the Michigan Merit scholarships, which go to some high school students. "The coalition took the avenue of the ballot proposal because Michigan is one of only three states that didn't designate tobacco settlement money for health care," Mr. Hiltz said. "We would like to see the funds used for the purpose for which they were designated, to help people with tobacco-related illnesses, especially those people who are either underinsured or don't have insurance at all." [Toledo Blade, Oct. 13, 2002]

• 9/11: Biotechnology companies and university researchers around the state have submitted 200 applications seeking more than $767 million from the Michigan Life Sciences Corridor Fund - double the amount sought last year. "It's the highest dollar amount requested ever," said Paul Krepps, spokesman for the Michigan Economic Development Corp., the state agency administering the project that will use up to $1 billion of Michigan's share of the tobacco settlement toward life sciences over a 20-year period. "This year we have less people asking for more money." But an initiative that could change how Michigan's $300-million-a-year tobacco settlement is spent was restored to the state ballot on Friday. The 2-1 decision by a Michigan Court of Appeals panel means that voters will decide whether the money should be spent to fund health care in hospitals and nursing homes, and to finance anti-smoking programs. If approved by voters, the measure could cap the annual life sciences investments between $39 million and $47 million a year, depending on smoking rates. Opponents of the initiative, which include the MEDC, may appeal to the Michigan Supreme Court. [Michigan Live, Sept. 11, 2002]

• 9/5: A group hoping to spend most of Michigan's $300 million a year in tobacco settlement money on anti-smoking and health care measures today is asking the courts to let voters decide the issue. The Board of State Canvassers deadlocked 2-2 Tuesday over whether to put the "Healthy Michigan Initiative" on the November ballot. Proponents are asking the state Court of Appeals to decide. "It's clearly a political vote," Roger Martin, spokesman for Citizens for a Healthy Michigan, said about the tobacco proposal supported by Democratic and rejected by Republican board members. "If the board would have followed the law, we would be on the ballot right now. [Michigan Live, Sept. 4, 2002]

• 8/30: Merit-based state scholarships tend to benefit college students who are least likely to need them, and in some cases are widening enrollment gaps between white and minority students, according to a study of programs in four states. The analysis of programs in Georgia, Florida, New Mexico and Michigan suggests states should weigh whether such programs meet their intended goals, said Gary Orfield, co-director of Harvard University's Civil Rights Project, which published the study. .Michigan's two-year-old Merit Award Scholarship Program, funded with money from the federal tobacco settlement, gives one-time grants of $2,500 to students who stay in-state, and $1,000 to students who go out of state or to private colleges. [Associated Press, August 27, 2002]

• 8/15: Engler vetoed the $845 million in revenue-sharing payments for the fiscal year that starts Oct. 1 because of three ballot proposals that could pass in November, potentially costing $1 billion he says the state doesn't have. The ballot proposals would overhaul the state's drug crime sentencing, require most tobacco settlement money to be spent on health care and guarantee collective bargaining for state employees. [Ann Arbor News, August 14, 2002]

• 8/15: Much of the tobacco settlement money now is spent on the Michigan Merit Award scholarships. Advocates for spending the money on smoking prevention insist that the Legislature can continue to fund the scholarships, and use the tobacco money where they say it was intended. [Bay City Times, August 15, 2002]

• 7/30: A state-sponsored billboard featuring a giant caterpillar that says "Smoking bugs me" may draw an occasional chuckle from passing motorists. But it drives Dr. Ron Davis nuts. So does another Michigan billboard featuring a pair of lips and proclaiming that kissing a smoker is like licking an ashtray. That advertisement was old, Davis says, when he was the state's chief medical officer from 1991 to 1995. "It's just an anemic media campaign," Davis, now director of the Center for Health Promotion at Henry Ford Health System in Detroit, said about Michigan's anti-smoking efforts. "I think the whole idea is to put benign messages out there so that they don't get the tobacco lobby too upset. "They have not used hard-hitting ads." Health advocates such as Davis are pushing a fall ballot proposal that would boost Michigan's anti-smoking efforts with most of the state's $300 million annual settlement from the national lawsuit against tobacco companies over smoking-related health costs. The issue is controversial because that money is targeted elsewhere -- most of it to the state's popular Merit scholarship award -- during tight budgetary times. But proposal supporters insist that the money should be spent on tobacco-control programs, including an aggressive marketing campaign. If they win, they say they'll follow U.S. Centers for Disease Control recommendations for anti-tobacco spending. In Michigan's case, that amounts to spending between $9.7 million and $29.3 million each year Michigan now spends $1.9 million on anti-tobacco marketing, a figure augmented with about $1.2 million worth of television and radio time donated by broadcasting groups, said Geralyn Lasher, spokeswoman for the Department of Community Health. A handful of states are leading the nation, with expensive, high-profile and often graphic anti-tobacco advertisements that experts say work. [Michigan Live, July 29, 2002]

• 7/25: The Michigan Association of Health Plans, the leading authority on managed care in Michigan, announced today that it opposes the ballot initiative to constitutionally dedicate monies coming to Michigan from the tobacco settlement. From a public policy standpoint, the initiative proposes deep, substantive and permanent changes in how funding will be distributed. The Legislature is vested with the responsibility to allocate resources and does so as state income and expenses will allow in a given fiscal year. This discretion will be hamstrung if the ballot proposal succeeds. "While we all concur that more funding needs to go to health care in Michigan, this approach will not do the job," said Eugene B. Farnum, Executive Director. "This ballot initiative proposes to fix in the constitution what more properly should be done through legislative consensus and open, public debate." In arriving at its position, the Association stands firm in its contention that the tobacco funds belong to the people of Michigan to be spent for the benefit of all our citizens by our elected representatives. The funds should not be dedicated to private groups to advance their own personal agendas. The initiative removes decision-making from the public arena and places it in the hands of a few private individuals who have unlimited power to use the funds as they see fit. While the ballot proposal details to whom the money should flow, it does not specify what sorts of programs or projects it will support. In a time when American citizens have witnessed unbridled fraud and mismanagement of corporate funds at the highest levels, this ballot proposal seeks to give billions of state dollars to private entities that will not be subject to public input, oversight or review. [PR Newswire, July 25, 2002]

• 7/11: A lobbying group representing Michigan hospitals and nursing homes delivered, more than 470,000 petition signatures to the state Monday, setting up a battle over how $300 million in tobacco-settlement funds is spent every year. Among other things, the settlement now helps thousands of high school students pay for college with scholarships of up to $2,500 for scoring well on the state's standardized MEAP tests. The lobby, Citizens for a Healthy Michigan, wants most of the money put back in hospitals and nursing homes, officials of which argue they tackle enormous smoking-related health costs. The group turned in the signatures to the state, claiming it had far surpassed the 302,711 required signatures to make the Nov. 5 ballot. Lori Latham, Healthy Citizens' campaign manager, said the 1998 $8.5-billion settlement was supposed to go to health care. Engler has threatened to veto a bill on Friday that would increase Medicaid funding to hospitals if the group follows through with the petition. The group's primary sponsor is the Michigan Health and Hospital Association. "It's unfortunate he's willing to punish one of our coalition members," Latham said. "It's an absolute grab by the hospital association and its fellow travelers," said state Sen. Joe Schwarz, R-Battle Creek. Schwarz, who is also a doctor, chairs the committee that funds higher education and pleaded with parts of the coalition not to go through with the campaign. [Detroit Free Press, July 9, 2002]

• 6/25: An effort to get state voters to use tobacco settlement money for health care threatens to kill funding for the Michigan Merit Award, which provides college scholarships for about 50,000 students a year. A coalition of health care interests -- being led by the state's hospital lobby -- now has enough signatures to ask voters on Michigan's Nov. 5 general election ballot whether the state's $8.5 billion tobacco settlement, paid over a 25-year span, should be spent on health care. High school and college students, who have been out for summer break while the petition drive has been gaining speed, are just beginning to learn these funds are at risk. They're preparing to mount a grass-roots offensive to the amendment. "I don't think they understand how big this issue will be," said Jared English, a third-year Michigan State University student from Jackson who is a Merit scholarship recipient. "We don't appreciate them stealing scholarships," said English, who hopes to have a statewide coalition of students organized by month's end. If approved, the proposed constitutional amendment -- called the "Healthy Michigan Amendment" -- would dedicate between $84 million and $106 million annually to hospitals. About $82 million was spent last year on the merit award program. It also would make Michigan one of only two states that have constitutionally determined how to spend its tobacco settlement funds, and one of seven states to have voter referendums on the issue, according to the Campaign for Tobacco-Free Kids in Washington, D.C., a nonprofit organization dedicated to tobacco control issues. Governor John Engler's spokeswoman Susan Shafer said the state already spends an appropriate amount on health programs, and Engler opposes the ballot initiative. [Detroit News, June 24, 2002]

• 6/19: Today the Michigan State Medical Society (MSMS) added its name to the list of health care organizations seeking to improve Michigan's health status by redirecting the state's tobacco settlement dollars to smoking prevention and health care. MSMS is joining Citizens for a Healthy Michigan, a coalition seeking passage of the Healthy Michigan Amendment ballot question. The Coalition wants Michigan citizens to be able to direct the state's tobacco settlement to health care and smoking prevention programs with their vote on November 5. "Smoking is the leading preventable cause of death in Michigan, " says MSMS President Dorothy M. Kahkonen, MD. "It has an estimated annual mortality of 15, 000 people each year. It's only appropriate that the dollars from the tobacco settlement be used to help reverse this very disturbing statistic." "The tobacco settlement was supposed to go to health care, and Michigan is nearly the only state in the nation that chose to ignore that fact, " says Art Knueppel, chair of Citizens for a Healthy Michigan. Coalition members believe the Healthy Michigan Amendment will save lives, prevent teens from smoking, and help check health care costs. [PN Newswire, June 18, 2002]

• 6/4: State hospitals and medical groups are about to battle Gov. John Engler and an emerging coalition of business groups over the state's estimated $8 billion tobacco settlement. The hospitals and medical companies now have enough signatures -- more than 300,000 -- to put a constitutional amendment on the Nov. 5 general election ballot that would divert most of the state's tobacco settlement to health care causes, said campaign manager Lori Latham. The Citizens for a Healthy Michigan wants to snag 90 percent of the estimated $300 million Michigan will receive annually for 25 years from tobacco companies. The funds are meant to reimburse the state for health care provided to Michigan smokers. But David Waymire, executive vice president of Marketing Resource Group, a Lansing-based public relations firm, said it's organizing a group to oppose the coalition. He said Gov. Engler and the Legislature have already dedicated tobacco settlement funds to college merit scholarships, prescription drug coverage for the elderly and research. [Detroit News, June 4, 2002]

• 4/30: Southwest Michigan lawmakers oppose a proposed constitutional amendment to put tobacco settlement money "where it belongs." The money, part of a nationwide 1998 settlement with tobacco companies, belongs where it is now -- in the legislators' hands, they contend. "That money belongs to the state," said Rep. Ron Jelinek, R-Three Oaks. "Here comes one interest group that says, 'We want 90 percent of that money.' I think that's dangerous." The Citizens for a Healthy Michigan Coalition introduced the Healthy Michigan Amendment, which would dedicate 90 percent of funds from the nationwide tobacco lawsuit settlement of 1998 to health care. [Sturgis Journal, April 29, 2002]

• 3/21: Michigan voters may soon be asked to choose between scholarships and health care. A long and expensive debate looms as a health-care coalition gathers signatures to try to change how Michigan divvies up money from the settlement of a national lawsuit against tobacco companies. Health groups feel cheated out of a fair share of a 25-year, $8.5 billion settlement and want to change the state constitution to guarantee that 90 percent of the money goes to health programs. That could kill the Michigan Merit Award scholarship program. [Lansing State Journal, March 20, 2002]

• 3/13: Michigan hospitals and other health care providers have started collecting signatures for a November ballot issue that would require that 90 percent of the state's $300 million annual take in tobacco settlement money be spent on health issues. Today, the biggest portion of the state's settlement with tobacco companies, more than $100 million a year, pays for merit scholarships for high school students who pass the standardized Michigan Educational Assessment Program test. In the past two years, the $2,500 scholarships have been awarded to about 92,000 high school seniors for post-secondary education. That equates to more than 40 percent of all state high school graduates. The state also spends $90 million a year on life-sciences development and prescription coverage for seniors. The rest is spent for miscellaneous purposes. A coalition led by the Michigan Health & Hospital Association has created a ballot committee to coordinate the campaign, called Citizens for a Healthy Michigan. [Crain's Detroit Business, March 11, 2002]

• 2/22: Fueled by $263 million from giant tobacco companies, the state Attorney General's Office collected a record $311 million last year. But the biggest share of the money, more than 84 percent, came from the state's portion of the national lawsuit settlement involving the major tobacco companies and 44 states. Michigan is in line to receive $8.5 billion over 20 years under terms of the settlement. The $311 million in overall collections compare with $14.6 million the state paid out last year to settle lawsuits filed against it. [Detroit News, Feb. 22, 2002]

• 2/8: A hospital trade association wants the state to stop spending tobacco-settlement money on scholarships and start using the funds to fight tobacco-related illnesses. The Michigan Health and Hospital Association is crafting a ballot proposal to let voters decide whether to spend the bulk of Michigan's $8.5 billion settlement on health care or the $2,500 Michigan Merit Award scholarships. State officials say they already spend about $8 million a year on anti-smoking programs. They say eliminating scholarship funding would hurt thousands of kids. Merit Awards are given to students who perform well enough on the Michigan Educational Assessment Program tests and can be used at any state college or university. Last year, more than half of Michigan's high school graduating class performed well enough to earn the award. Terry Stanton, spokesman for the state Treasury Department, which administers the MEAP and the award, said cutting the tobacco-settlement funding could mean the end of the scholarship program. [Associated Press, Feb. 8, 2002]

• 2/4: Tired of being shut out of tobacco-settlement money, Michigan hospitals are considering a November ballot measure to require the state to contribute $100 million annually from settlement funds to hospital services. The hospitals probably will target the $100 million a year in tobacco-settlement funds used to pay for merit scholarships. Those hospitals, already strapped for cash, would prefer to avoid an expensive ballot campaign, said David Seaman, executive vice president of the Michigan Health & Hospital Association in Lansing. But the MHA is prepared to ask its members to finance a $5 million pitch to voters if the Michigan Legislature won't act soon to deal hospitals into the state's nearly $300 million annual take in tobacco-settlement money, Seaman said. Michigan today spends $103 million for merit scholarships and $90 million for life-sciences development and prescription-drug coverage for seniors. Yet the intent of the 1998 tobacco settlement between the major tobacco manufacturers and 45 states and the District of Columbia was to compensate the states for health care spending caused by tobacco-related illnesses, Seaman said. He said hospitals and other providers should be getting $100 million of the state settlement, which calls for Michigan to receive about $8.9 billion over the next 25 years. [Crain's Detroit Business, Feb. 4, 2002]

• 1/11: To obtain complete information on the amount of tobacco settlement funds Michigan has received and how the money has been allocated by the legislature and governor, you may access a memorandum prepared by the Michigan Senate Fiscal Agency on December 3, 2001. The 6 page memorandum provides accurate information on appropriations and expenditures of the tobacco settlement funds. To access the memorandum, go to http://www.senate.state.mi.us/sfa.

• 10/10: The Michigan Supreme Court expressed reluctance Tuesday in deciding whether Wayne County can sue tobacco companies after the state already settled with cigarette-makers. The seven justices, meeting at Wayne State University Law School, are considering the question posed to them by U.S. District Judge Paul D. Borman, who oversees the county's lawsuit against Philip Morris and other tobacco companies. The county contends the attorney general's settlement didn't apply to it, and seeks to recoup money it spent on health care for smokers. "What (Borman) is asking us to do is leap into this difficult area with an inadequately developed record," said Chief Justice Maura D. Corrigan. She noted that the facts of the county's lawsuit and other matters for Borman are undecided as the state Supreme Court wrestles with how -- and whether -- to answer Borman's question. Justice Clifford W. Taylor was more blunt: "Are we introducing a regime of sheer pandemonium" by allowing the county to sue, he asked. Taylor was concerned that such a move could create a "parade of horribles" in which counties and municipalities could revisit other regulatory settlements negotiated by the state. Rob Carey, who argued the case for the county, said the state settlement has not been used to reimburse the county for its financial losses. [Detroit News, Oct. 10, 2001]

• 9/20: Attorney General Jennifer M. Granholm, along with state Representatives Virg Bernero and Doug Hart, State Senator Bob Emerson, and former Attorney General Frank J. Kelley today joined Mississippi Attorney General Mike Moore in calling on the Legislature to reexamine its priorities in appropriating and spending Michigan's share of the more than $200 billion national tobacco settlement. Granholm stated that "when the state Attorneys General sued the tobacco companies in 1997, the intention was to reimburse taxpayers for the phenomenal long-term, public costs of caring for smoking-related illnesses. We knew then, and we know now, that the best way to bring those costs down permanently is to stop people from smoking in the first place. Adequately funding smoking cessation and prevention programs -- especially for our children -- should be among our highest priorities with these settlement dollars.'' The Centers for Disease Control (CDC) has established a nine-component "best practice" guideline for developing effective, comprehensive smoking cessation programs. Under CDC's guidelines, Michigan ranks 40th in the nation in terms of adequate smoking cessation spending. Granholm also states that Michigan has no business being on the bottom of the list. According to the national Campaign for Tobacco-Free Kids, more than 3,000 kids become regular smokers every day. Since the Master Settlement was announced, 150,000 Michigan children took up the habit. Every year, tobacco use costs state taxpayers an estimated $2.8 billion in excess health care costs, lost productivity, and absenteeism. Public health advocates estimate that if current trends in Michigan continue, 230,000 Michigan children who are alive now will die of tobacco-related illnesses. [Press Release, Sept. 20, 2001]

• ANTI-SMOKING advocates continue to criticize Michigan lawmakers on the way they are spending the tobacco settlement funds. Of the 46 states which sued the tobacco companies, Michigan and North Dakota are the only states which have not created new smoking cessation programs. Of the $386 million Michigan will spend next year from the funds, the largest amount, $156.2 million will be spent on Merit scholarship awards and other post-secondary programs. The rest of the money will be spent as follows: $82.5 million to help balance the budget, $45 million for SENIOR PRESCRIPTION DRUG PROGRAMS, $43 million for Medicaid, $40 million for the Life Sciences Corridor, and $19 million for other health care programs. While Michigan has not created any new ANTI-SMOKING programs, it claims to spend $8 million from general revenues on antismoking annually. This amount however, is far below the $54 million recommended by the Centers for Disease Control. [Detroit News Lansing Bureau, July 29, 2001]

• During the end of June, the Senate passed a bill to cut life sciences funding from $50 million to $40 million to help balance the budget. The budget for the Life Sciences Corridor funds research at four universities as well as eight startup biosciences companies in Ann Arbor and is paid for with tobacco settlement funds. The measure will be taken up by the House Appropriations Committee when the legislature reconvenes in September. Governor John Engler has indicated that if passed by the House, he will approve the cuts. [The Ann Arbor News, July 24, 2001]

• On June 14th, Governor John Engler and Republican legislative leaders signed target agreements that set an overall general fund budget of $9.6 billion. Because of budget problems, this is $200 million less than what the governor proposed in February and a $100 million decline from spending enacted for the current fiscal year. Because of the budget shortfall, the lawmakers agreed to a $155 million withdrawal from the Budget Stabilization Fund and about $145 million from the state's share of the tobacco settlement to be used to plug the remaining budget holes. The settlement money's approved purpose is for three programs: the Merit Award college scholarship, the life sciences research corridor and a prescription drug assistance program for poor seniors. But the budget agreement would use it for much more than those programs-$82.5 million would be shifted into the general fund for undetermined use, $30 million would help pay for Medicaid programs, and $23 million for a variety of Community Health programs, among other smaller expenditures. Still shocking by its absence is any use of settlement funds for TOBACCO PREVENTION AND CESSATION PROGRAMS. [Gongwer News Service, June 14, 2001]

• Lawmakers are once again tapping Michigan's tobacco settlement dollars, and once again, they are not being used for tobacco related issues. Instead, the money is key to this week's private meetings between Governor Engler and lawmakers in closing a projected $500 million hole in the 2002 state budget. During the week of May 28th, the Senate tapped $40 million in tobacco money for Michigan's 15 public universities. The money comes from an unused portion of the Michigan Merit Award which is funded from the tobacco settlement. Anti-smoking advocates have ranked Michigan near the bottom for using money for everything except getting residents to stop smoking. Michigan spends less than $7 million annually on ANTI-SMOKING efforts. The American Lung Association of Michigan and other health advocates are recommending the state spend $75 million annually for anti-smoking and cessation programs. [The Ann Arbor News, June 6, 2001]

• On December 20th, the Community Foundation for Southeastern Michigan (CFSEM), which covers 7 counties including the Detroit area, announced it had awarded $743,132 in 24 grants to improve the health of young people and SENIORS, using tobacco settlement funds which went to the foundation for distribution. The money is from the $10 million allocated each of the past two years by the legislature to go to the over 60 community foundations in the state, with the funds targeted to youth and ELDERS; CFSEM is by far the largest of the community foundations in the state. Of the total amount awarded in the grants, which were for as much as $50,000, the portion going for programs for youth totaled $448,232, and the amount for SENIORS was $294,900. The number of grants going to youth and SENIORS was about the same. A significant number of the grants were directed at TOBACCO PREVENTION AND CESSATION, although almost all of those were youth programs; the lack of funding for TOBACCO CESSATION programs directed at SENIORS was because no such proposals had been submitted. Many of the grants also targeted MINORITY populations, including African Americans and Arab Chaldean. [CFSEM press release, December 20, 2000]

• On December 13th, 59 awards totaling nearly $100 million of tobacco settlement funds were made to various universities and research programs and businesses around the state to help establish the life sciences research corridor which Governor Engler had announced about a year ago. These projects are to be funded at the rate of about $50 million a year for 20 years, using settlement funds. If memory serves correctly, when this was first announced (see below), there was some talk that this research would benefit OLDER PERSONS and health. The awards today went to Michigan State University ($30.4 million); University of Michigan ($28.1 million); Wayne State University ($9.1 million); Van Ardel Institute ($4.2 million); Barbara Ann Karmanos Cancer Institute ($2.2 million); Michigan Technological University ($2.0 million; and many other research companies. Virtually all the funds will go for research in areas such as gene therapy research, genetically engineered mice, laboratories to study molecular structure of proteins, microbiology, etc. This is similar to what a large number of states are trying to fund with their settlement money, all in a rush to be leaders of the biotechnology pack. [Ann Arbor News, December 14, 2000 & Detroit News, December 15, 2000]

• On July 7th, when Governor Engler signed the FY'01 budget for the Department of Community Health, AGING ADVOCATES had again won big in gaining settlement funds for health programs for needy older persons. A total of $61,021,4000 was allocated, plus about half of the $6 million of settlement funds that will go to Community Foundations for programs to foster healthy children and elders; a total of over $64 million. Of the $61 million, $33 million will go for PRESCRIPTION DRUGS FOR ELDERS, $20 million for MEDICAID SERVICES FOR ELDERS; $5 million for RESPITE CARE FOR ELDERS; and over $3 million for the LONG TERM CARE ADVISOR PROGRAM in the Office of Aging. In addition to the settlement funds, aging services received a $54 million increase in Medicaid waiver funding, through a combination of state and federal funds, and $1 million for a new in-home care program for persons slightly above Medicaid levels. In FY'00, aging programs had received $53 million in settlement funds (see 1999 Highlights and below for more on this), plus about half the $6 million which went to Community Foundations. While this was again a great victory for aging advocates, the governor and legislature for the second year in a row refused to allocate any settlement funds for TOBACCO CONTROL. The largest share of the settlement funds again went for college scholarships and a bio-tech research corridor project. [TCSG sources, July 25, 2000]

• On March 23rd, the State of Michigan announced that it plans to use $1 billion of settlement funds for its Life Sciences Corridor for research in biotechnology, medicine and genetics. This plan received $50 million in the FY'00 budget and has not yet had any legislation passed which would authorize the state to allocate the full $1 billion, although the governor has been saying this is what he intended to do since last summer. Be-that-as-it-may, the state plans to issue requests for proposals in April to get this program off the ground, probably using the money already appropriated and then trying to get legislation passed to require that the full $1 billion be allocated to finish the job. Meanwhile, on March 24th, the Lansing State Journal editorialized that Michigan holds the dubious distinction of having the 4th highest rate of adult smokers in the nation, and, yet, has allocated none of the settlement funds to address TOBACCO PREVENTION & CESSATION PROGRAMS. The editorial states that Michigan has the opportunity to fund a major effort against smoking; but, "about the only thing Michigan lacks is the will of its leaders to recommit to the anti-smoking cause. Why is that, anyway?" the editorial concludes. [Press Release of MI Economic Development Corporation, March 23, 2000, and Lansing State Journal, March 24, 2000]

• Legislation passed on June 10th allocates the settlement funds in large measure to the Governor's Merit Scholarship Program -- with 75% of the funds over the next 25 years to go for this program. Of the total $384 million expected in the first two payments, $53 million, or about 14%, has been allocated to AGING PROGRAMS (see Highlights above for details on how this is allocated). This is a great victory for aging groups, since earlier it appeared that no funds would go for aging or other health programs. However, in a major defeat so far, no funds were allocated for TOBACCO CONTROL PROGRAMS. Of the funds allocated for the scholarship program, in FY'2000, 30% of the funds will go for the program, in FY'2001, 50% of the funds will be so allocated, and in subsequent years, 75% will go for scholarships. However, it is not clear at this time whether as much as $100 million of the $384 million in FY'2000 funds have not been allocated; if some of these funds are still available, then there may still be a chance to obtain some of the funds for tobacco prevention and cessation programs. [TCSG sources June 11 & Ann Arbor News, June 10, 1999]

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MINNESOTA

Total: $6.1 billion awarded to the State of Minnesota; an additional $469 million awarded to Minnesota Blue Cross/Blue Shield; payments to be made in 1998 totaled $352 million, with varying amounts to be paid in subsequent years, including about $461 million in 1999.

• The state settlement calls for a $102 million fund to provide assistance to smokers who wish to quit. This fund is to be administered by the new non-profit group, the Minnesota Partnership for Action Against Tobacco (MPAAT).

• The state settlement calls for a $100 million national smoking research fund, also to be administered by MPAAT.

• The state settlement calls for the creation of a non-profit foundation, run by a board of directors drawn mainly from prominent public health groups, to develop a comprehensive program to reduce teen smoking and combat the social and economic harm caused by tobacco. Subject to approval by the legislature, this foundation would ultimately oversee a trust fund of over $650 million to fund various programs to achieve its goals.

• The state legislature has final approval over the allocation of funds not specifically placed in the two funds administered by MPAAT.

• The use of the $469 million awarded to Blue Cross/Blue Shield (a co-plaintiff with the state in the lawsuit against the tobacco industry) had to be approved by the Minnesota Department of Commerce. A plan proposed by BC/BS on 1/22/99 calls for the following allocation of these funds: $109.9 million for stop-smoking aids, such as patches, for BC/BS members; $179.1 million on tobacco cessation and other health promotion programs; $21 million to the Blue Cross Foundation to make grants for community-based health and research programs; and up to $124 to be paid in taxes. BC/BS, on 1/25/99, held a hearing on its "Plan of Action" for the use of these funds; the plan has to be approved by the Commerce Department; see below for current status of this plan.

• 2/20: Gov. Tim Pawlenty's proposal to use $1 billion from state tobacco endowments to help balance the 2004-05 budget drew further criticism Wednesday from antismoking advocates at a State Capitol rally where families displayed photos of relatives who had died from smoking-related diseases. Speakers at the event, arranged by the Minnesota Smoke-Free Coalition, asserted that loss of the endowments, including one aimed specifically at reducing teen smoking, would have long-term implications resulting in higher health care costs. "In one fell swoop . . . we're going from first to worst in protecting our kids from tobacco," said Carol Falkowski, director of research communication for the Hazelden Foundation and president of the coalition. "This addiction begins with children and is completely preventable." Dr. Peter Dehnel, medical director of the Children's Physician Network, said endowment proceeds, which provide $25 million a year to the Minnesota Health Department tobacco-use prevention program, are needed to counter the marketing muscle of "a very sophisticated and organized" tobacco industry. [Minneapolis Star Tribune, Feb. 20, 2003]

• 7/25: In the face of a new legal challenge, Blue Cross and Blue Shield of Minnesota said Tuesday that it won't start spending $412 million from the 1998 tobacco settlement. That money has been slated for community health clinics, disease-prevention programs, antismoking efforts, rebates to Blue Cross members and other purposes approved in June by the state Commerce Department. Now, the spending plan has landed in Dakota County District Court for a second time. Lawyers representing businesses and individuals who bought Blue Cross health insurance have sued the Eagan-based insurer, arguing that most of the settlement money should go to current and former plan members. On Tuesday, Blue Cross President and CEO Dr. Mark Banks said he was disappointed that 12 law firms had joined forces to press the suit, which seeks class-action status. The issue raised in this suit harks back to an argument Blue Cross used against the cigarette makers: that smoking-related illness drove up health care costs to Blue Cross and its members. Cambronne said $252 million of the settlement money -- the amount not directly covered by the Commerce Department decision -- should be used solely to repay those policyholders. Instead, Blue Cross officials said they planned to begin 30 to 40 programs next year to reduce tobacco use and to prevent heart disease and cancer among all Minnesotans, not just Blue Cross subscribers. [Minneapolis Star Tribune, July 24, 2002]

• 6/28: More Minnesotans will get help to quit smoking while a coordinated effort to impose community smoking bans will be at least temporarily set aside under a court ruling Thursday. The Minnesota Partnership for Action Against Tobacco (MPAAT) had no "legal or factual justification" for its decision to make restaurant smoking bans the centerpiece of its efforts, Ramsey County District Judge Michael Fetsch concluded. He ordered the group to refocus its anti-smoking efforts to help smokers quit. Fetsch also prohibited MPAAT from approving any more grants from its $202 million endowment that don't meet that criteria until MPAAT can demonstrate a substantial commitment to cessation programs. "MPAAT has departed from and has ignored one of [its] primary missions," Fetsch wrote. The judge stopped short of stripping MPAAT of its endowment and giving the money to the University of Minnesota and state Department of Health, as Attorney General Mike Hatch had requested. Chief Deputy Attorney General Alan Gilbert said Hatch's office was satisfied "We raised two issues, that MPAAT was rife with conflict and that it failed to provide cessation help. The court agreed on both issues in very strong language," Gilbert said. "The judge essentially is offering MPAAT another crack at bat, and we have serious doubts if MPAAT is capable of coming up with a new plan that's acceptable." Fetsch agreed that secondhand smoke poses a public health danger -- a key MPAAT argument for smoking bans. "The dangers of second-hand smoke are real and are substantiated by reliable, independent medical research. The protection of citizens is advanced by these approaches," he wrote. [Minneapolis Star Tribune, June 28, 2002]

• 6/6: Blue Cross and Blue Shield of Minnesota Wednesday received state approval that allows the insurer to spend $412 million in tobacco settlement funds. Although Blue Cross said it will refund $60 million to about 220,000 policyholders and 18,700 businesses, those refunds could be delayed if new lawsuits are filed seeking more money for a larger group of current and former Blue Cross members. But the Minnesota Commerce Department ruling Wednesday ends the state's oversight of the 1998 Blue Cross settlement award. In 1999, state regulators struck down the first proposal because it didn't do enough for policyholders and gave Blue Cross a competitive advantage. Commerce Commissioner James Bernstein had nothing but praise for the new plan Wednesday. In addition to the $60 million in refunds, the plan approved by Bernstein will give $30 million to nonprofit community clinics that provide care to the uninsured and $70 million to the Minnesota Comprehensive Health Association, the state's health insurance program for residents who can't get private coverage because of their pre-existing medical conditions. The plan accounted for $160 million, which is roughly the amount of money that Blue Cross reserves exceed state-mandated limits. The company will use the remaining $252 million, which lies outside regulators' jurisdiction, to bankroll a 10-year program to reduce tobacco use, improve cardiovascular health and prevent cancer in Minnesota. [Minneapolis Star Tribune, June 6, 2002]

• 5/17: An apparently veto-proof bill that balances the state's $439 million projected deficit for 2002-03 without raising taxes or cutting spending passed the Minnesota House and Senate on Wednesday as legislators work toward a mandated Monday adjournment. To mollify the Ventura administration and Wall Street bond houses, the bill allows $1.1 billion of tobacco endowments to be used as a "cash-flow" account that would pay bills during natural gaps in revenue. [Minneapolis Star Tribune, May 16, 2002]

• 5/2: Minnesota Attorney General Mike Hatch on Wednesday proposed using $100 million of the state's tobacco settlement money to establish a center for lung cancer research and treatment at the University of Minnesota Medical School. The money would come from the budget of the Minnesota Partnership for Action Against Tobacco (MPAAT), a nonprofit organization Hatch has criticized, and would be administered by a group of well-known Minnesotans, including two former governors. Hatch said he will present his recommendation to Ramsey County District Judge Michael Fetsch, who oversees MPAAT, at a hearing May 17. At the hearing, MPAAT will report on its spending strategies, which have included controversial smoking-ban campaigns in cities and counties. MPAAT officials, however, repudiated Hatch's proposal and insisted that the organization's antismoking efforts will reduce incidences of lung cancer over the long term by reducing smoking. Flanked by seven lung cancer survivors, Hatch said MPAAT has lost public confidence with its funding strategies and awarding of many grants to people affiliated with MPAAT or its advisory committees. "These people are the victims," Hatch said of those standing and sitting beside him at a Capitol press conference. "Look where the money is going. [MPAAT is] spending $250,000 to find out why gays smoke, why Hispanics smoke, why people having surgery smoke. We know why. They're addicted." "We want to look to the future," Joseph said at a separate news conference responding to Hatch's proposal. "If you direct the money to the victims of tobacco use, then it wouldn't change things in the future." Hatch said he would ask Judge Fetsch to create a five-person panel to oversee the funds for the proposed oncology center. Those five would be former Govs. Arne Carlson and Wendell Anderson; James Shannon, former president of the University of St. Thomas; Minneapolis attorney Brian Short, and Deputy Attorney General Kristine Eiden. [Minneapolis Star Tribune, May 2, 2002]

• 4/26: Minnesota Attorney General Michael Hatch and the antitobacco group he has criticized filed legal documents Thursday that paint diametrically opposing pictures of the group's mission and success. Hatch and the Minnesota Partnership for Action Against Tobacco are expected to face off May 17 before Ramsey County District Judge Michael Fetsch during a review of MPAAT activities. Hatch filed a motion Friday seeking to strip MPAAT of the $202 million it was given under the 1998 tobacco settlement, and to transfer it to the state Health Department and the University of Minnesota. In a legal memo to back up his criticisms, Hatch described MPAAT as an organization that is rife with conflicts of interest and that pays only "lip service" to its legally mandated mission -- to help addicted Minnesota smokers quit. Instead, he said, the group has inappropriately used state funds for controversial smoking ban campaigns in Duluth and elsewhere. "MPAAT was not given carte blanche authority to use the state funds in any manner whatsoever, and the state funds were not intended to be a funding source for the political agenda of the MPAAT board," the Hatch filing said. MPAAT, in its legal response, portrayed its leaders as dedicated tobacco-control experts with a broad license to "diminish the human and economic costs" of tobacco, including campaigns to ban indoor smoking. It said health experts view such campaigns as vital to reducing smoking. It also argued that MPAAT has stringent policies to avoid conflicts of interest even though it awarded grants to organizations with representatives on MPAAT's board or advisory committees. Hatch's memo said more than 80 percent of the grants went to organizations with such conflicts. They include the Smoke-Free Coalition, the Mayo Clinic, the American Cancer Society Midwest Division and the American Lung Association, the Hatch memo said. [Minneapolis Star Tribune, April 26, 2002]

• 4/24: Minnesota Attorney General Mike Hatch should fight tobacco, not the antitobacco organization he has accused of betraying the public trust, the group said Tuesday. Dr. Richard Hurt, chairman of the Minnesota Partnership for Action Against Tobacco (MPAAT), said at a news conference that Hatch's accusations "are outrageous." The conflict over how the organization should spend its money should be determined by the Ramsey County District Court, he said. A hearing has been scheduled for May 17 before Ramsey County District Judge Michael Fetsch. Mike Ciresi, the lead attorney who represented the state on the tobacco litigation, said in an interview Tuesday that he agrees with MPAAT's legal interpretation of the orders. "Undertaking to have ordinances passed is totally within (MPAAT's) purview," he said. "That's as plain as the fact that the sun rises in the east." Al Gilbert, an assistant state attorney general, disagreed. He said that a May 1998 court decree specifically directs that $102 million of the funds should be used to help every Minnesota smoker quit. That order should take precedence over the later one, which outlines MPAAT's mission and structure, he said. Hurt invited Hatch to join forces in a series of community meetings that MPAAT has scheduled across the state to discuss reducing tobacco use. He urged Hatch to appoint two people to the MPAAT board, as he is permitted to do under the court order. He also called on Hatch not to accept campaign donations from tobacco interests. Hatch said he will not comply with the first two requests until the legal issues are resolved, and he said he won't accept future campaign contributions from the tobacco industry. He said he didn't know if he had ever accepted them in the past. [Minneapolis Star Tribune, April 24, 2002]

• 4/22: The Health Department has been fighting to save the tobacco endowment that it already controls as the state Legislature searches for solutions to the state budget deficit. Hatch's motion asks the court to preserve the reallocated endowment for the remainder of its 25-year lifespan, which would keep it out of the state's general fund. "If that was the court's decision, [the Health Department] would absolutely do our best to administer the court order and we certainly could," Malcolm said. "There's certainly no doubt in my mind about our capability or the propriety." However, as an MPAAT board member (appointed by Gov. Jesse Ventura), Malcolm also says her organization fills a niche. "I like the idea of having some of the tobacco money administered by a separate, independent nonprofit entity," she said. It is MPAAT's independent status that prompted Hatch -- as the state's overseer of nonprofit organizations -- to propose that its money be brought under state control. Since January, Hatch has repeatedly asked the organization to curtail its funding of groups pursuing controversial and divisive smoking-ban campaigns around the state. He also called on the group to address perceived conflicts of interest on its 21-member board of directors. Malcolm said she wants to meet with Hatch soon "to find out more about his motion and to have a talk about the need for having a comprehensive approach to tobacco prevention efforts in the state. "We've had some success. I'd like to see us build from the point we're at now, rather than starting to dismantle it." [Minneapolis Star Tribune, April 21, 2002]

• 3/26: Leaders of a campaign to reduce teen smoking in Minnesota are touting their achievements as lawmakers eye the group' s multimillion dollar endowment to pay for programs. The Legislature created the $590 million endowment in 1998 after a $6.1 billion settlement with tobacco companies, and the state Health Department was authorized to use interest from the fund for tobacco prevention and cessation programs. Target Market, the $6.4 million program for fighting teen smoking, recruits teens through rock concerts, skateboard contests and other events, painting the tobacco industry as evil for going after youths. But this year, legislators face a looming budget shortfall, and even a portion of the endowment would pay a lot of bills, from nursing homes to schools to road construction sites. [Associated Press, March 26, 2002]

• 3/19: Minnesota would have $22 million less for smoking prevention and $22 million more for terrorism prevention under a bill passed by a House committee Monday. The bill would fund training and equipment for local law enforcement and create a host of new terrorism-related crimes. The full House could hear the bill Wednesday. A budget-balancing bill passed last week by the House uses $325 million from the tobacco fund. If both the budget-balancing bill and the anti-terrorism bill become law, there would be about $175 million left in the tobacco endowment fund. [Saint Paul Pioneer Press, March 19, 2002]

• 3/16: Restrictions for women seeking abortions, along with about $380 million in budget cuts, were included in a controversial health and human services bill approved by the House on Thursday. Indeed, the bill eliminates 85 percent of the remaining $439 million budget deficit. Most of that money, $325 million, would come from diverting the statewide tobacco prevention funds -- a move that outraged DFLers who said the program was effective in preventing smoking and should not be scrapped. [Minneapolis Star Tribune, March 15, 2002]

• 3/12: House Republicans announced a budget-balancing plan Monday that would fix Minnesota's latest deficit by spending $310 million that now is set aside to fight teen smoking and by cutting state spending an additional $107 million. That will put it on a collision course with a Senate Democratic-Farmer-Labor budget bill that would spare the anti-smoking money but use a bookkeeping change to temporarily borrow about $312 million from school districts and counties by delaying state payments to them. Senate Democrats plan to propose tax increases, probably an income tax surcharge and perhaps a cigarette tax hike, to fill that deficit and rebuild budget reserves. [Saint Paul Pioneer Press, March 12, 2002]

• 2/18: The St. Louis County attorney said he will not investigate local anti-smoking groups for alleged misuse of tobacco settlement money to win approval for Duluth's smoke-free law. In a letter dated Feb. 13, County Attorney Alan Mitchell wrote that the county would not begin a criminal investigation of the Minnesota Partnership for Action Against Tobacco. In January, six Duluth restaurant and bar owners said in a letter to Mitchell requesting an investigation that the local chapters of the American Lung Association, the American Cancer Society and other groups misused state tobacco settlement money to sway voters in November. The restaurant owners' request outlined 15 allegations against MPAAT and local anti-smoking groups that ranged from misuse of tobacco settlement money to blatant conflicts of interest and incomplete reporting of grants used for the campaign. Duluth voters on Nov. 6, 2001, approved a ban that prohibits smoking in restaurants, including those with bars, and gives police authority to cite restaurant owners who allow smoking. [Duluth News-Tribune, Feb. 17, 2002]

• 2/8: To erase the 2002-03 shortfall, the House would tap $800 million of state budget reserves, cut $653 million from state spending and plug the remaining gap with $554 million from the tobacco prevention endowment. The plan would leave untouched the tobacco endowment that funds medical research. Ventura's plan relies on a combination of $1.75 billion in spending cuts and $2 billion in tax increases over four years, along with $653 million of one-time reserve funds. He would raise the gasoline tax by a nickel a gallon and the cigarette tax by 29 cents a pack. Both plans would make use of the tobacco funds, although Senate leaders say they would borrow from the funds and restore the money at some point in the future. [Minneapolis Star Tribune, Feb. 8, 2002]

• 1/23: The Minnesota Partnership for Action Against Tobacco (MPAAT) defended its pursuit of smoking bans in its 2002 biennial report to the state legislature and Ramsey County District Court. But the report is unlikely to deflect tough questions today when the nonprofit's leaders testify before the House Health and Human Services Policy Committee. Rep. Fran Bradley, R-Rochester, the committee chairwoman, said members are expected to ask about MPAAT's change in funding strategy. A court order established MPAAT in 1998 and gave the group $202 million -- $102 million to be used to help Minnesotans quit smoking. Instead, the organization decided to fund groups seeking smoking bans in restaurants and bars in cities statewide. The efforts have been divisive and have failed in most communities. But MPAAT's report made it clear that its emphasis lies elsewhere. Although MPAAT's report discussed a "social environmental approach" at length, it didn't specifically address smoking bans. It repeatedly cited the success of tobacco-control programs in Massachusetts and California but downplayed the role that increasing tobacco taxes played in reducing smoking in both states. MPAAT never pursued an increase in Minnesota's tobacco taxes as a strategy, although an increase has now been proposed by Gov. Jesse Ventura as part of his plan to reduce the state's budget deficit. Several times, the MPAAT report cited a California study that showed a dramatic drop in lung cancer rates between 1988 and 1997. However, the report did not point out that California enacted the strictest air pollution-control law in the nation in 1988, which some experts argue had more to do with the drop in lung cancer rates than smoking. Moreover, California's statewide smoking ban in bars and restaurants took effect in 1998, a year after the lung cancer study was completed. [Minneapolis Star Tribune, Jan. 22, 2002]

• 1/16: Rochester hotel and motel owners asked the Olmsted County attorney Monday to review the lobbying activities of antismoking advocates who helped persuade the Olmsted County Board to enact a restaurant smoking ban in November. The Rochester Lodging and Hospitality Association, with 52 members, asked County Attorney Raymond Schmitz to determine whether proceeds from the state of Minnesota's tobacco settlement can be used to influence public policy. The association contends that the funds should be used for programs that help smokers quit, not to bring smoking-ban campaigns before city councils or county boards. The Olmsted County ban went into effect Jan. 1. In particular, the association complained about grants from the Minnesota Partnership for Action Against Tobacco (MPAAT) and the Minnesota Health Department that were used to fund smoking-ban advocates in Olmsted County. "MPAAT has funded numerous smoking ban efforts around the state and most have resulted in divisive battles splitting communities apart," wrote association Chairman Mark Anderson, owner of the Holiday Inn South in Rochester. [Minneapolis Star Tribune, Jan. 15, 2002]

• 12/27: Minnesotans will have a chance next month to comment on Blue Cross and Blue Shield of Minnesota's plans to spend the $412 million it will receive from its 1998 settlement with tobacco companies. Commerce Commissioner James Bernstein will field comments from 6 to 11 p.m. Jan. 8 at the Minnesota History Center in St. Paul. Under the new plan, announced in November, about $160 million would be divided between community clinics, a risk pool for hard-to-insure individuals, and efforts to lower premiums for Blue Cross members and businesses. The rest, $252 million, will be used for an anti-smoking program developed by Blue Cross. [Associated Press, Dec. 26, 2001]

• 11/28: Facing a budget shortfall, the Ventura administration has halted indefinitely the flow of about $200 million in state government grants that was allocated to nonprofit services like family planning and health care. The freeze could postpone or reduce such state-funded services as teen birth-control programs, efforts to keep at-risk children in school, inner-city health clinics, food deliveries to the elderly, rural bus systems, water monitoring and arts organizations, said Marcia Avner, public policy director of the Minnesota Council on Nonprofits. Among the biggest programs in limbo are $7 million to bridge health disparities between blacks and whites; $9 million for local public health programs, and $8 million from the tobacco endowment for youth tobacco prevention programs, said John Stieger, spokesman for the state Health Department. Finance Commissioner Pam Wheelock said she took the action last week to give the Ventura administration more flexibility to deal with " big budget problems" when the state gets a new revenue forecast Tuesday. Among the funds that are on hold is $7.8 million to help fund the transition of public TV stations to digital broadcast, said Allen Harmon, president of the Minnesota Public Television Association. Part of the cost was to be paid by the federal government, which is requiring the conversion by May 2003, but that money is contingent on state matching funds. Also, Children' s Hospitals and Clinics was expecting a $126, 800 contract for a teen reproductive health program, plus $50, 000 for a youth tobacco prevention program, said Jeanne D. Ritterson, government grants writer for Children' s. [Associated Press, Nov. 28, 2001]

• 11/19: MPAAT was given a straightforward mission -- to help smokers quit -- by the court order that created it from the 1998 settlement of the state's lawsuit against the tobacco industry. But the nonprofit organization has taken a radically different path. Armed with $202 million in public money, MPAAT has pursued prohibition as its centerpiece, providing more than $1 million for campaigns to pass no-smoking ordinances that have mostly failed, dividing communities in the process. The group has operated with little or no accountability and has given most of its grant money to organizations in which a third of its own board members hold high level positions. Of the $4.6 million awarded last year in MPAAT's first and only round of grants to date, 82 percent went to individuals or groups with ties to its board or advisory committees. While MPAAT's research advisory committee recommended that 70 percent of the research grants address youth smoking, only 20 percent -- $453,500 out of $2.3 million -- went to that purpose. Many other states ended up spending their tobacco settlement money on roads, sewers and other general needs. Minnesota set out to be different. It would use part of its $6.1 billion settlement to create a one-of-a-kind organization to help Minnesotans give up smoking. The Ramsey County District Court order creating MPAAT gave it two missions:
  1. Spend $102 million ''to offer smoking-cessation opportunities to Minnesota smokers."
  2. Spend $100 million for research, with an emphasis on youth smoking.
  From the beginning, some questioned the wisdom of entrusting so much public money to a group while simultaneously shielding it from most oversight. To give a new organization such a substantial amount was ''unbelievable,'' former Gov. Arne Carlson said. ''Two hundred million dollars is a staggering sum of money; you're inviting trouble." Humphrey, however, contends that MPAAT's hybrid nature -- part government agency, part private entity -- keeps it ''insulated from the vagaries'' of the Legislature, which might otherwise raid its budget. MPAAT's board of directors represents a who's who in Minnesota public health circles. In addition to the Mayo Clinic's Hurt, board members include State Health Commissioner Jan Malcolm, Minnesota Smoke-Free Coalition founder Dr. A. Stuart Hanson and Minnesota Association for Nonsmokers President Jeanne Weigum. The board also has representatives from the American Lung Association and the American Cancer Society. David Kessler, former chairman of the federal Food and Drug Administration -- who for a time was the anti-smoking activist of the Clinton administration -- is an honorary board member. MPAAT instead turned to another advisor -- the Minnesota Smoke-Free Coalition -- that had no doubts about what course to pursue. The new focus: prohibition. [Minneapolis Star Tribune, Nov. 18, 2001

• On April 23rd, Medicaid recipients in Minnesota lost a Supreme Court bid which argued that state law and the federal Constitution entitled them to a share of the tobacco settlement money. In July 1998, a group of Medicaid recipients filed a class action lawsuit in the Minnesota state court saying they represented 70,000 people in the state who suffered smoking-related illnesses and received benefits through Medicaid. The lawsuit claimed that the group deserved one third or more of the settlement money. Two courts had previously dismissed the lawsuits. A number of states have seen similar lawsuits, but, thus far, none has succeeded. [Associated Press, April 24, 2001]

• On April 12th, The Minnesota Supreme Court reversed the February 2000 Minnesota Court of Appeals decision which ordered the Department of Commerce to approve implementation of Blue Cross' original tobacco settlement proceeds plan. As part of the 1998 tobacco settlement for Minnesota, Blue Cross and Blue Shield of Minnesota was awarded $469 million, and became the first health care plan to settle with the tobacco industry and recover damages. As part of the agreement, the Department of Commerce must approve how Blue Cross spends this money, and there has been disagreement since Blue Cross first drew up its plan in September 1998. "Our purpose in suing the tobacco industry was to hold the industry accountable and to prevent a new generation of smokers, so investing in health improvement is not only the best use of the monies, it's also the right thing to do," said Mark Banks, M.D., Blue Cross President and CEO. Despite the ruling, Blue Cross remains optimistic it can develop a plan for the money which is mutually agreeable with its regulators. [Press Release from the Blue Cross and Blue Shield of Minnesota, April 12, 2001]

• On July 19th, the Minnesota Partnership for Action Against Tobacco (MPAAT) announced the awarding of $2.3 million in ANTI-TOBACCO grants, as well as a plan for a $400,000 advertising campaign to combat secondhand smoke. The grants include a two year grant of $793,560 to the statewide Minnesota Smoke-Free Coalition to eliminate secondhand smoke throughout the state and to counter tobacco industry influences. Grants also went to the American Lung Association and the American Cancer Society and other groups to fight secondhand smoke. Grants of $245,000 each went to groups targeting tobacco use among the Latino and Asian communities. MPAAT also voted not to invest any of its funds in a mutual fund which has some tobacco industry stock in its portfolio; even though this may lose MPAAT about $14 million in earnings over 25 years. MPAAT has about $135 million in its portfolio now, and it is growing by about $10 million a year. The Board also voted to begin a major statewide telephone quit line in 2001 to have it coincide with another such effort by Blue Cross and Blue Shield of Minnesota. [Minneapolis Star Tribune, July 20, 2000]

• A June 7th news story reported that, in April, the Minnesota Health Department had awarded two significant TOBACCO CONTROL grants. One grant for $200,000 went to the William Mitchell College of Law to establish the Minnesota Tobacco Prevention and Control Law Project to provide legal information to communities and organizations mounting anti-smoking efforts. The law project will be directed by tobacco control advocate Doug Blanke who worked for Attorney General Skip Humphrey and played a central role in the Minnesota lawsuit against the tobacco industry. The second grant, for $750,000, went to the University of Minnesota School of Public Health to conduct evaluations of tobacco prevention efforts. [St. Paul Pioneer Press, June 7, 2000]

• See Highlights note of August 2nd (above) which describes the successful effort by AGING and TOBACCO CONTROL advocates to obtain settlement funds for tobacco control programs and general fund revenues for prescription drugs for the elderly. This effort demonstrated how the availability of settlement funds provided the leverage needed to access substantial new general revenue funds for aging programs, while also gaining substantial settlement funds for tobacco control programs. [TCSG sources, August 2, 1999]

• See Highlights for information on the magnificent victory tobacco prevention advocates won on May 17th when the legislature passed and the Governor concurred with legislation placing $489 million in settlement funds in two Endowment Funds for TOBACCO PREVENTION AND CESSATION PROGRAMS. [Minneapolis Star Tribune, May 18, 1999]

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MISSISSIPPI

Total: $4.1 billion; some payments already made; we will add payment schedule later.

• 4/2: A Mississippi welfare official say most of the Families First Resource Centers will remain open after additional funding was provided by the attorney general's office. Don Taylor, executive director of the state Department of Human Services, said $3.4 million it being provided by the Healthy Mississippi Initiative, which is funded by the state's tobacco litigation settlement. The centers were to close in March. [Associated Press, April 1, 2004]

• 1/30: An attempt by some lawmakers to change the way money from the tobacco lawsuit settlement is repaid was defeated on the House floor Wednesday. The change would have applied to money diverted from the Health Care Trust Fund to temporarily cover expenses at the Division of Medicaid and other state agencies. The money will only be paid back when state revenues increase, according to state law. But Rep. Jim Ellington's amendment would have changed those terms to require that the money be paid back using annual installments over 15 years from 2006 to 2020. Some lawmakers said it would create more certainty for the terms to borrow the money. [Clarion-Ledger, Jan. 30, 2003]

• 3/8: Governor Ronnie Musgrove signed a bill Wednesday that will help plug a $158 million deficit in the state Medicaid program for the needy, aged and disabled. The bulk of the money, $108 million, would come from the state' s settlement with tobacco companies. [Minneapolis Star Tribune, March 6, 2002]

• 2/20: A Vicksburg lawmaker is raising constitutional questions about $20 million a year that, by court order, is routed to Partnership for a Healthy Mississippi. The Partnership is a private, nonprofit group that uses TV ads, song-and-dance groups, anti-smoking rallies and other techniques to fight tobacco use among young people. The $20 million comes off the top of annual payments Mississippi receives under settlement of a lawsuit against tobacco companies. After that money is taken, the rest of each payment until now, over $100 million annually goes into a health care trust fund. Sen. Mike Chaney, R-Vicksburg, said the Partnership's goals may be admirable, but its funding is questionable. "This is just about as basic as you can get with government," Chaney said last week. "The attorney general cannot be the chief legal officer for the state of Mississippi, hold a fiduciary responsibility to protect the trust fund and at the same time file a motion in a chancery court to get part of it." Attorney General Mike Moore is chairman of the Partnership's board. Moore said the program is upholding the goals of a tobacco lawsuit he filed in 1994 and settled in 1997. The suit was to recover public costs of treating sick smokers. [Associated Press, Feb. 18, 2002]

• 1/28: Mississippi Governor Ronnie Musgrove on Friday proposed a mixture of accounting maneuvers, cash from tobacco lawsuit proceeds and borrowing to help the state ride out an economic downturn this year and next. Facing a $148 million shortfall in the current year's Medicaid program, the governor told legislative leaders that he still had no intention of cutting back on recent legislative expansions of that health program for the poor. And by suggesting that lawmakers use annual payments from settlement of a lawsuit against tobacco companies for future budget needs, Musgrove forced onto legislators a debate over whether to spend tobacco cash now on health programs or save it in a trust fund. "Is the policy choice to accumulate dollars in a fund, or is it more important to help people in need?" Musgrove said during a presentation in the Old Supreme Court Chambers of the state Capitol. In the audience were Lt. Governor Amy Tuck, House Speaker Tim Ford (D-Baldwyn), ranking budget and health care leaders in the Legislature, the governor's Cabinet and dozens of health care advocates. [Commercial Appeal, Jan. 26, 2002]

• 1/16: Mississippi is a leader in use of tobacco settlement money for smoking prevention, according to a new nationwide report released today. But lawmakers and others are hungrily eyeing that money for everything from funding the Medicaid budget deficit to raising state employee pay. The kind of uses that landed neighboring Tennessee and most other states on the worst performing list, compiled by the Campaign for Tobacco-Free Kids, the American Heart Association, the American Cancer Society and the American Lung Association. Mississippi, which spends $20 million a year on smoking prevention, Arizona, Maine, Massachusetts and Minnesota are the only states that managed to fund above the minimum recommended by the federal Centers for Disease Control and Prevention, according to the report. "It's gratifying that we're being recognized (as) one of the best states, especially among our young people, because those are the ones who become the adult smokers of tomorrow," said State Health Officer Dr. Ed Thompson. Last year, CDC ranked Mississippi second in its tobacco prevention spending. The report released today ranks Mississippi fourth. [Clarion Ledger, Jan. 15, 2002]

• 1/4: State Rep. Charlie Capps says that he hopes the state budget shortcomings can be dealt with without drawing from the tobacco trust fund, but it is a possibility. "The absolute last thing that I want to do is go into that trust fund," said Capps. "I really hope that we don't have to get into the tobacco fund, but at the same time I don't want to turn any old ladies away from nursing homes." Capps, head of the House Appropriations Committee, said he fears that once money is taken from the tobacco fund, it will become easier to do so, and the fund will quickly be depleted. The largest burden on Mississippi's budget is a $124.6 million Medicaid shortfall and the additional $72 million the agency is seeking for the next fiscal year. [The Bolivar Commercial, Jan. 3, 2002]

• 12/27: Four months ago, House Health and Welfare Committee Chairman Bobby Moody said he was going to "exhaust every avenue" before raiding the tobacco trust fund to shore up Medicaid. It appears all those roads have led to dead ends. The tobacco trust fund, created from the settlement of Mississippi's landmark lawsuit against the tobacco industry, may be the only way state lawmakers can make up a $124.6 million Medicaid shortfall, Moody, D-Louisville, said Monday. "We don't know where else we are going to turn to cover the shortfall," Moody said. If lawmakers do have to raid the fund, Moody vowed that the money would be returned. "I'm committed to building up the trust funds," he said. But House Speaker Tim Ford told The Clarion-Ledger editorial board that once money is diverted, "it's hard to put back." [Clarion-Ledger, Dec. 25, 2001]

• 11/30: Gov. Ronnie Musgrove, seeking support for his proposal to spend additional tobacco settlement money to leverage more federal Medicare spending in the state, brought his campaign to Tupelo Wednesday where he addressed physicians and administrators at North Mississippi Medical Center. Musgrove first proposed in July that the state spend $100 million a year of the state's annual tobacco settlement income to leverage a $300 million annual return in federal Medicare funds for a total of $400 million in health care spending a year. "Next year we take $100 million of that and direct it to health care and put the rest in the trust fund," he said of the tobacco money, which is earmarked for health care spending only. [Northeast Mississippi Daily Journal, Nov. 29, 2001]

• 11/20: Governor Ronnie Musgrove said Thursday that investing money now from the state's tobacco settlement fund will lead to a higher quality of life for Mississippians in the future. Musgrove, state legislators and national policy experts were in Vicksburg Thursday to discuss the future of Mississippi's health care policy. The meeting was the first of nine planned across the state this year and sponsored by the Mississippi Health Advocacy Program. It was sponsored locally by the Warren-Yazoo Mental Health Service. "Why do you think some states have a higher quality of life Musgrove asked." They started earlier investing dollars into things like health care. Musgrove touted his health care plan, which proposes taking $100 million in tobacco settlement money each year for health care programs. Combined with federal matching dollars, Musgrove's program would designate $400 million for health care during the next fiscal year. [Vicksburg Post, Nov. 17, 2001]

• On July 26th, Governor Ronnie Musgrove proposed using $150 million out of the $210 million the tobacco trust fund to pay for Medicaid; this would then free up money previously spent on Medicaid to pay for money to improve insurance coverage for state employees and teachers , reduce or eliminate deductibles and improve other benefits. The $150 million would also match federal Medicaid dollars for a total of $600 million to go for Medicaid- funded services for low-income persons, including some elders. Musgrove needs legislative approval to bring his plan to fruition and must get the support of key lawmakers. [The Clarion Ledger, July 27, 2001]

• During the last week of December, Mississippi received its most recent tobacco settlement payment, totaling $210 million. Of that amount, about $190 million went into the tobacco trust fund, which already had about $480 million in it, and $20 million goes for TOBACCO PREVENTION PROGRAMS under the Partnership for a Healthy Mississippi program. Attorney General Mike Moore said that the money in the trust fund should not be viewed by legislators as a source of funds for budget shortfalls, which has been suggested by some legislators. The settlement funds in the Healthcare Trust Fund are to be invested and only the earnings are to be spent, and then spent only on health care programs. Thus far, the legislative leadership has stood firmly in favor of this use of the funds. In the 2000 fiscal year, the legislature actually authorized the use of more than just the interest, but the money went entirely for health care programs, such as $20 million for TOBACCO PREVENTION PROGRAMS, and funding for Medicaid (which covers poor persons of all ages, including ELDERS), health insurance for children and hospital trauma centers, among other programs. It appears that under a court order, the state will be required to continue to spend at least $20 million a year on TOBACCO PREVENTION PROGRAMS, in line with the settlement agreement Moore negotiated. [Clarion Ledger, January 3, 2001]

• As of Jan. 20th, Mississippi's tobacco settlement fund had reached a half-billion dollars. The beauty of the state's settlement is that the money is in a trust fund, with interest only available for health care expenses. According to a legislative briefing on Jan. 20th, the money this year is being spent on children's health insurance, NURSING HOMES, trauma care, and the mentally ill. A separate pot of money from the settlement is also being spent on ANTI-TOBACCO PROGRAMS, with a current two year allocation of $62 million. House Public Health Committee chairman Bobby Moody (D) said his committee will not consider changing the law to allow the funds to be spent on non-health-related programs; this was echoed by House Appropriations Committee chairman Charlie Capps (D). This year, a total of about $50 million is available from the fund; next year, about $55 million will be available; and in 2003, about $100 million will be there for spending. [Biloxi Sun Herald, Jan. 21, 2000]

• Before adjourning on April 1st the legislature enacted a bill, signed by Governor Kirk Fordice last week, which creates a "trust fund for health care" into which all the settlement funds will be deposited and invested. The fund will be overseen by a board, chaired by State Treasurer Marshall Bennett, and including five persons with financial backgrounds to be appointed by the Governor, and nonvoting members appointed by the Lieutenant Governor and House Speaker, as well as Attorney General Mike Moore. The trust fund board will oversee the funds, but the legislature will determine how the funds are spent. Legislators will be able to annually appropriate interest from the fund, as well as some of the principle for specified purposes. News reports said that about $50 million will be spent in the next year on things like trauma care and eyeglasses for Medicaid recipients. State Treasurer Bennett said about $150 million is in bank CD's now and will mature on July 1st, at which time the board will decide what to do with that money. Attorney General Moore said that he was pleased the money would finally be available to protect the health of children, poor people and SENIOR CITIZENS. Rep. Jim Barnett (D), a physician, said that he wanted to see that the tobacco money goes for health insurance for children and for PRESCRIPTION DRUGS FOR THE ELDERLY. (See full news article on this in Highlights above.) [Biloxi Sun Herald 4/7/99]

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MISSOURI

Total: $4.5 billion; 1st paymt $54.6 million; 2nd paymt $145.8 million.

• 2/14: The Missouri House gave initial approval Wednesday to a bill limiting the money that can be spent from bonding the state tobacco settlement. The bill limits the amount that can be spent this fiscal year to $100 million. But Gov. Bob Holden has said he needs $263 million to balance the budget. He wants to get that money from the tobacco bonds. He has said if the Republican-controlled Legislature does not approve of his bond plan, then he will cut the $263 million from primary, secondary and higher education. [KMSBC-Ch. 9, Feb. 12, 2002]

• 10/28: The ends of Proposition A do not justify its means. Proposition A on the Nov. 5 statewide ballot would raise more money for health care in Missouri. Added funding for health care is a laudable goal. But the proposal would do so by hiking the tax on cigarettes by 55 cents a pack, to a total of 72 cents, and by raising the tax on other tobacco products by 20 percent. We believe placing this new tax burden exclusively on Missouri's vilified, addicted smokers is fundamentally unfair. The state can't have it both ways. Either make tobacco prevention or tobacco taxation a priority. We believe it's time for the state to stop decrying the cost of smoking and take action toward prevention with money it already has won from the tobacco settlement. [Jefferson City News Tribune, Oct. 27, 2002]

• 10/15: Despite these chilling statistics, the Missouri Legislature has yet to commit any of its tobacco settlement money -- or any other major funding source, such as cigarette tax revenue -- for tobacco use prevention. That could change. In November, Missourians at the polls will be asked to quadruple the sales tax on cigarettes from 17 to 72 cents per pack. Under the plan, only 7 percent of those funds will be used for smoking prevention programs. And as the state budget crunch continues, tobacco-control advocates watch as the funding stream from Big Tobacco slips through their fingers. [Jefferson City News Tribune, Oct. 13, 2002]

• 8/2: Missouri's 2,700 tobacco growers will receive two rounds of compensation payments this year as part of the $206 billion national tobacco settlement. The first payment was made July 31. The national tobacco growers settlement earmarks $5.15 billion to tobacco producers, in an attempt to replace lost income due to decreased demand for tobacco and related products. [St. Louis Business Journal, August 1, 2002]

• 7/25: Missouri ranks last in the nation when it comes to spending money on preventing people from smoking, a report says. "After decades of people dying from tobacco-related illnesses and decades of costs to the state, it's the moral imperative of the the state to use some of it to stop kids from smoking," said Tony Iallonardo, spokesman for the Campaign for Tobacco-Free Kids. State Sen. Marvin Singleton, a Joplin Republican and doctor, tried to introduce a bill during the last legislative session so some money from the settlement would be earmarked for prevention programs. But the bill never got out of committee. "We as legislators have not done the responsible thing," Singleton said. "We sold one-third of our future income just to meet immediate needs," said Singleton. "That's like saying to hell with health care." State Budget Director Brian Long defended Holden's decision to withhold money from the tobacco prevention program. "The governor transferred money into programs like K-12 schools, prenatal care and medicaid, so those didn't have to be cut." Long added the governor has endorsed the 55-cents-a-pack cigarette tax initiative to be voted on in November. [Springfield News-Leader, July 24, 2002]

• 6/13: State officials did not properly notify the public about a meeting regarding Missouri's attempts to sell bonds against its share of a national tobacco settlement, officials acknowledged Wednesday. But officials said the meeting was exempt from certain provisions of the state's open records and meetings law. Lt. Gov. Joe Maxwell confirmed Wednesday that the Tobacco Settlement Financing Authority met Tuesday without the required 24-hour notice. Maxwell, with the support of Attorney General Jay Nixon, pointed to a Sunshine Law provision allowing an exception to the public notice requirements when there is "good cause." [Associated Press, June 13, 2002]

• 6/8: Governor Bob Holden has signed into law a bill allowing Missouri to issue bonds against its share of the national tobacco settlement to help shore up a weak budget. Under the law which takes effect immediately, Missouri could sell a maximum of 30 percent of the $4.5 billion in tobacco payments it expects to receive over the next 25 years. That bond sale could result in as much as a $600 million cash advance, depending on market conditions. State officials hope to secure at least $50 million to help fill gaps in the budget year beginning July 1. [Jefferson City News Tribune, June 8, 2002]

• 5/14: Missouri is now dead last in the nation in protecting its kids and taxpayers from the terrible toll of tobacco because of the Legislature's failure to provide any funding for tobacco prevention. Missouri citizens should be outraged that the state's leaders have broken the promise of the 1998 state tobacco settlement and failed to use a single penny out of the $140 million in settlement funds the state has received so far to address the tobacco problem. While Missouri has difficult budgetary choices to make, this is a penny-wise, pound-foolish decision. The Legislature's decision ignores the enormous harm tobacco use now causes in Missouri and the conclusive evidence that tobacco prevention programs are saving lives and far more money than they cost. We call on the Legislature and Gov. Bob Holden to seize the first opportunity to reverse this shortsighted decision and restore funding for a program that once showed so much promise. [Campaign for Tobacco-Free Kids, March 13, 2002]

• 5/10: But the budget troubles grew through the day, climaxing when the House rejected a plan Thursday night to use a state savings fund to help meet expenses for the fiscal year ending June 30. Holden's plan to use the so-called Rainy Day Fund already had passed the Republican-controlled Senate on a 31-2 vote. But it received scant Republican support in the House, falling short on a 94-64 vote of the 109 votes pass by a two-thirds majority. The governor was seeking $120 million from the budget reserve fund and asking lawmakers to divert $50.7 million of tobacco settlement revenues intended for health care, research, anti-smoking efforts and early childhood programs. He would have covered the remainder of the shortfall by using money from a building maintenance fund and withholding money from various state agencies. [Kansas City Star, May 10, 2002]

• 5/6: Pending legislation would allow the state to sell the rights to these annual payments. Supporters of the idea want to use more than $1 billion of the tobacco settlement money to issue bonds - and estimates say the sale of the bonds could bring in about $530 million. Whether these bonds would save the state's bacon, or wind up costing too much down the road, is a matter of debate. Estimates show that the state should get about 53 cents on the dollar if it sells the settlement payments. Critics fear the state would get a much lower return. "We can clearly bring in more money if we stick to the payment schedule we agreed to instead of selling the bonds," said Attorney General Jay Nixon, whose office worked on the settlement. "I don't see why we should give up any of those payments to a bond house or anybody else." [St. Louis Post Dispatch, May 6, 2002]

• 5/2: The following is a statement of William V. Corr, executive vice president, Campaign for Tobacco-Free Kids: Missouri is in danger of falling to dead last in the nation in protecting its kids and taxpayers from the terrible toll of tobacco unless a legislative conference committee provides funding for the state's tobacco prevention program. While Missouri has tough choices to make in order to balance the budget, cutting tobacco prevention is the wrong choice. It's a penny-wise, pound-foolish approach that ignores the conclusive evidence from states around the country that tobacco prevention programs are reducing smoking among both kids and adults, saving lives by reducing the incidence of lung cancer and heart disease, and saving money by reducing smoking-caused health care costs. Unfortunately, Missouri so far has spent none of the $140 million it has received in tobacco settlement funds on tobacco prevention. It's time for Missouri's leaders to keep the promise of the tobacco settlement and use tobacco money to solve the tobacco problem. The conference committee should provide tobacco prevention funding at the level passed by the Senate, $21 million in FY 2003. [U.S. Newswire, May 2, 2002]

• 4/22: Former Missouri Gov. Mel Carnahan predicted what would happen. In May 2000, shortly after Missouri lawmakers failed to designate how the state's tobacco settlement funds would be spent, Carnahan said the windfall could too easily be wasted on routine programs. "It doesn't take any imagination to know what will happen," Carnahan said. "There will be urgent good needs, and we'll just take it from the tobacco money." As lawmakers look for ways to avoid slashing funds for programs that serve the elderly, the disabled and the poor, they are looking once again at the state's settlement with Big Tobacco. This time, however, many lawmakers are looking for an even bigger short-term payoff. They want to sell part of the stream of annual payments in exchange for a lump sum payoff now. [Kansas City Star, April 21, 2002]

• 4/16: Governor Bob Holden says he is open to various options for balancing the state budget, including using some of the state's share of its future tobacco payments. "I'll work with anybody who's trying to get a fiscally responsible budget passed," Holden said in a meeting Monday with Post-Dispatch editorial writers and reporters. What the public needs to understand, he added, is that deep cuts in state services are inevitable if the Legislature and his administration fail to come up with some sort of plan for balancing the budget for the fiscal year that begins July 1. Missouri expects to receive $4.6 billion over the next 25 years as its share of a settlement of a multistate suit against the nation's tobacco companies. Holden said he was interested in a plan that calls for the state to collect some of its payments early, then use the money to sell bonds. [St. Louis Post-Dispatch, April 16, 2002]

• 4/12: A veteran senator outlined a plan Thursday that would avoid major cutbacks in state programs by borrowing money from the state's budget reserve and repaying it with funds from Missouri's tobacco settlement The two-part plan introduced by Sen. Jim Mathewson, a Sedalia Democrat, would authorize the state to sell part of the future stream of payments from cigarette makers for a lump sum now. Mathewson said he would support selling up to 25 percent of the annual payments over the next 25 years. Mathewson said the state could borrow from the budget reserve, then repay the loan once the sale of the tobacco payments is completed. Governor Bob Holden quickly endorsed both parts of the plan. He said both the budget reserve and a sale of tobacco payments could provide the funds needed for essential services for Missourians who are poor, elderly or disabled. Lawmakers' first impressions varied widely. Senate Appropriations Chairman John Russell, a Lebanon Republican, said he saw merit in the sale of part of the tobacco payments. [Kansas City Star, April 12, 2002]

• 1/23: A state committee is getting ready to divvy up $21.5 million from tobacco settlement money to life science grants to universities and other groups in Missouri. But don't expect the money to go for research. The Missouri Life Sciences Advisory Committee is pushing "capacity" - the tools needed to actually do the research. Scientists and economic development types say the state will get a bigger return on its investment if the state grants pay for the equipment and personnel needed to land bigger federal grants. [St. Louis Post-Dispatch, Jan. 22, 2002]

• 1/14: Missouri's revenue from a national tobacco settlement now stands at $389 million. The state received $44.2 million on Dec. 31 as its annual January payment from the settlement between big tobacco companies and states that sued over the costs of treating tobacco-related illnesses. Missouri expects to receive $4.5 billion over 25 years as its share of the settlement. The January payment -- which arrived 10 days ahead of Thursday's deadline -- was the fourth to date, with another due April 15, according to Attorney General Jay Nixon's office. [Jefferson City News Tribune, Jan. 11, 2002]

• 12/17: Gov. Bob Holden made $212 million in budget moves Friday to shore up the state's weak finances. The governor drew immediate criticism for freezing $63.5 from the national tobacco settlement. Health advocates were particularly critical of a cut of $3.5 million from smoking-prevention programs. They said that Missouri had the third-highest smoking rate in the country. Holden said the anti-smoking program had not yet begun and that the budget still had $18 million for anti-smoking efforts. A spokesman for Campaign for Tobacco Free Kids, a Washington-based group, said many other states are using tobacco settlement money to cover budget shortfalls. The spokesman, Tony Iallonardo, called it foolish to cut programs that will eventually save Missouri money. [New York Daily Times, Dec. 14, 2001]

• 9/17: On the last day of the special legislative session, a bill was passed which creates a new PRESCRIPTION DRUG PROGRAM FOR ELDERS. Since Governor Bob Holden had asked for this program, to replace the current program which gives a $200 per person tax credit and which was ineffectual and out of fiscal control, it is quite certain he will sign it into law shortly. The new program will be funded out of tobacco settlement funds and general revenues, with costs estimated at between $50 and $100 million annually. The plan will provide drug payment benefits for persons age 65 and over who have no insurance to pay for drugs. The plan will cover two categories, as follows: individuals with income at or below $12,000 and couples at or below $17,000; and individuals with income at or below $17,000 and couples at or below $23,000. Those in the lower income category will pay an annual enrollment fee of $25 and have a $250 deductible; those in the higher income range will pay a $35 annual fee and have a $500 deductible. Participants in either category will pay 40% of their prescription drug costs after the deductible is met, and the new state plan will pay the remaining 60%. The legislation will repeal the current prescription drug plan. The legislation also changes the eligibility requirements for Medicaid to gradually increase the threshold of income a person may earn and still be eligible for Medicaid; over the next three years, the threshold will rise to $716 per month from the current level of $530 per month. These Medicaid changes will cover both elders and disabled persons; it is expected that nearly 11,000 additional people will be covered at a cost of $7.2 million annually, also to come out of tobacco settlement funds and general revenues. Earlier this year, the legislature used about $127 million of tobacco settlement funds to pay off the deficit of the past two years run up by the current PRESCRIPTION DRUG PROGRAM; thus, over three years, about $200 million in settlement funds will go for prescription drugs for older persons. This is a wonderful victory for AGING ADVOCATES. For a news article on this, click above.

• For FY2002, Missouri lawmakers allocated $22.1 million (15 percent) of the settlement money for a comprehensive statewide TOBACCO CONTROL PROGRAM modeled after the CDC Best practices publication and the experience in other states. [Tobacco Free Press, June 2001]

• On June 21st, the Department of Agriculture announced that checks averaging $612 are coming to Missouri tobacco farmers as the first payments from the tobacco settlement. Missouri's 2,634 tobacco farmers are to receive $22 million annually over 12 years as part of the $5.15 billion National Tobacco Growers Settlement; this is known as Phase II tobacco settlement, which differs from the larger state tobacco settlement fund. The growers' trust was established to help farmers cope with revenue losses that are expected as tobacco use declines because of the industry settlement with states. [Associated Press, June 24, 2001]

• After drawn-out legal challenges, Missouri finally received its first payment from the national tobacco settlement; about $338 million was deposited in the state treasury on May 18th. Several groups, including the city of St. Louis, a hospital, and smokers, sought to intervene and receive some of the settlement. The state Supreme Court rejected their claims in December, and an appeal period to the U.S. Supreme Court had to expire before an independent auditor could certify all legal challenges were over. Also on May 18th, a plan to set up a state-funded, life science research program failed when a senator blocked its passage as the session came to a close. The life sciences program was to be funded from the settlement money. The measure that failed also would have let voters approve or reject a plan on how to spend the state's settlement money. If voters approved the plan, they would have exempted the settlement from the state revenue lid. Money that goes over this lid comes back to taxpayers through income tax refunds. Proponents of the life science bill had hoped the measure would ensure about $32 million for research at various institutions. [Associated Press, May 18, 2001 and Post-Dispatch Jefferson City Bureau, May 19, 2001]

• On May 10th, legislative negotiators reached an agreement over how to appropriate settlement funds. Their compromise would set aside $50 million in an investment fund -- three-fifths of what the House had originally proposed. Another $153 million would be dedicated to help SENIORS PAY FOR PRESCRIPTION DRUGS -- either through an existing income tax credit or a newly proposed subsidy program still pending in the Legislature. Also, $25 million would go to build a new state Health Department laboratory. The rest of the money would be divided among hospitals and health care, ANTI-TOBACCO EFFORTS, life sciences research, and early childhood programs. Governor Bob Holden, who had proposed neither the endowment nor health lab, can support both items, said his budget chief Brian Long. The spending bill must still pass through the full House and Senate before it goes to the Governor. [The Kansas City Star, May 10, 2001]

• As of the end of the year 2000, legislators are preparing for the 2001 session, and, once again, the tobacco settlement funds will be high on the agenda for action; deciding how to spend the settlement funds is something that has eluded the legislature during the past sessions. Missouri remains one of just three states which have not been able to decide on how to allocate the funds. Whether agreement can be reached this session is very much up in the air, with a number of legislators saying they still think agreement will not be reached in the coming session. One of the big issues is whether the settlement funds are covered by the Hancock Amendment which would require that the money be returned to the citizens in the form of a tax cut; if this is not done by the legislature, it is possible a legal challenge might be mounted to halt any other use of the funds. An alternative which failed last year but which might resurface this year would be to pass a plan but send it to the voters in a special referendum. Last year there was strong support in the Senate for spending 20% on TOBACCO CONTROL PROGRAMS and 60% of health care, with a major share of that to go for PRESCRIPTION DRUGS FOR ELDERS, and the remaining 20% to go into a reserve fund; whether that will resurface is a big question. [The Examiner News, December 30, 2000]

• On December 12th, the Missouri Supreme Court handed down a unanimous decision rejecting a number of challenges to the tobacco settlement funds agreement the state had negotiated. The decision, unless appealed to the U.S. Supreme Court, could mean that the state would begin receiving settlement funds payments within about 120 days; up to now, the funds have been placed in an escrow account, which now has about $193 million, with another $125 milion expected in the next five months. The decision rejected a plea from the City of St. Louis to gain a share of the settlement funds; however, very importantly, the court said that the City of St. Louis would not be prohibited from filing its own lawsuit against the tobacco industry for expenses it incurred do to paying for health care for persons with diseases caused by tobacco. This is a very significant ruling by the court, although it applies only to Missouri. The court also said that the Attorney General could contract with private attorneys to assist in the settlement funds case, but that the legislature had a right to veto the fee arrangement before the end of the next year. [St. Louis Post Dispatch, December 13, 2000]

• As the Missouri legislature tries to decide how to spend the settlement funds, it is also confronted by a serious question of what the settlement money is: regular state revenues, or reimbursements for past spending on tobacco-related health care. Under the Hancock Amendment, passed some years ago and upheld by the 1997 court decision, any excess state revenue that grows significantly faster than the income of Missouri residents must be refunded to income tax payers. So, if the settlement funds are state revenues, there is a possibility they would have to be used for tax refunds. If, on the other hand, they are reimbursements, then Hancock wouldn't apply, and the funds could be spent on other purposes; however, by being called reimbursements, they might be more open to legal challenges by hospitals, cities and counties (see below) who want a share of the funds. To address this issue before the July 1st start of the next fiscal year, a number of legislators are proposing that the funds be placed in a trust fund; once in the trust, there might be more time to determine how to handle the funds and sort out the two preceding predicaments. Senate President Ed Quick (D) supports putting the funds in a trust to gain time to sort things out. Such an option might also delay until later decisions about how to use the funds. Governor Mel Carnahan (D) also supports the idea of a trust fund, with the plan that the funds would eventually be used for ANTI-TEEN SMOKING INITIATIVES AND TO IMPROVE THE HEALTH AND EDUCATION OF FUTURE GENERATIONS. [AP report 2/12/99]

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MONTANA

Total: $832.2 million; 1st paymt $10.2 million; 2nd paymt $27.2 million.

• 5/2: Health: Opponents of smoking saw two key victories neutered this session. An initiative devoting more of the stateÕs tobacco settlement money to smoking-prevention programs was compromised when $11 million of the settlement money was allocated for programs for the poor, disabled, and mentally ill, and a Helena indoor smoking ban was overturned after being approved by 62 percent of voters last June. "I would say the tobacco lobby and the tavern lobby were the most powerful lobbies in the state this session," says Kristen Nei of the American Cancer Society. "Pretty much they got what they wanted, and this should be a wakeup call about who was directing our state this session." [Missoula Independent, May 1, 2003]

• 4/25: A House majority agreed with the Senate on Tuesday and approved the transfer of $13 million from voter-approved tobacco prevention programs to pay for human services programs. Senate Bill 485, by Sen. John Cobb, R-Augusta, takes $13 million of $18 million that voters set aside for tobacco prevention programs from the annual $30 million payment that Montana gets as a result of the tobacco lawsuit settlement. At the polls in November, 65 percent of voters backed Initiative 146, which directed $18 million to tobacco prevention programs. [Billings Gazette, April 25, 2003]

• 4/18: House committee Wednesday approved a bill changing how the state spends money it gets under the settlement of a multistate lawsuit against the tobacco industry. The measure, which contradicts a voter-passed initiative, would divert $11.8 million of the $18 million dedicated to smoking-prevention efforts and use it for human service programs. Senate Bill 485, passed by the Business and Labor Committee on a 14-4 vote, appears to be the Legislature's choice for using the tobacco settlement money. It's the last remaining proposal for tapping the portion of the annual $30 million payment that is not required to be put into a trust fund. [Associated Press, April 16, 2003]

• 2/28: Lawmakers on the Senate Public Health Committee may send voters back to the polls to rethink their decision to spend the state's millions of dollars in tobacco settlement money on tobacco prevention programs. Sen. John Esp, R-Big Timber, is sponsoring Senate Bill 451, which seeks to revise the use of tobacco settlement money to include mental health services, assistance for people with tobacco-related illnesses and public school prevention programs. The problem with his plan is that 65 percent of voters told the state in a November ballot issue that they want a large portion of the $30 million annual tobacco settlement payment spent on tobacco-use prevention. [Feb. 25, 2003, Billings Gazette]

• 2/20: HELENA Lawmakers on Tuesday took $2.6 million of tobacco settlement money that voters allocated to the state's Children's Health Insurance Plan in November and redirected it to Medicaid in fiscal 2004 and 2005. The problem with the plan is that Montana voters approved Initiative 146 in November, saying they want the $30 million annual tobacco payment divvied up with 40 percent going to a permanent trust fund, 32 percent to tobacco prevention programs, 17 percent for care of uninsured children and adults and 11 percent returned to the state's general fund. [Helena Independent Record, Feb. 19, 2003]

• 2/6: Slightly more than two months ago, Montana voters passed Initiative 146, the Tobacco Disease Prevention Act, by a vote of 65 to 35 percent. I-146 directed the Montana Legislature to spend a portion of the state's revenue from the settlement with big tobacco companies to fund a comprehensive tobacco prevention program. It also funded the Children's Health Insurance Program and provided funding for health insurance for those who cannot obtain coverage from other sources. Montana initiatives cannot appropriate money but they can earmark funds, so it is up to the Legislature to follow the will of the voters and appropriate funds to put the vote in action. I-146 set up the infrastructure and stipulated that 32 percent of the tobacco settlement funds should go to comprehensive tobacco use prevention. In recent weeks, some legislators have suggested that we not fund I-146 and scale back or delay implementation of the program. These are terrible ideas with devastating long-term health consequences. Ignoring a vote of the people is equally as devastating to our democratic process when voters are told that their votes don't count. Time and time again Montanans have expressed their opinion. They want a portion of the tobacco settlement funds to go to stopping our kids from using tobacco. [Billings Gazette, Feb. 6, 2003]

• 1/19: Legislators said Friday they want to use some or all of the state's tobacco settlement money to boost the state Department of Health and Human Services budget in 2004 and 2005. The problem with the plan is that state law already allocates the $30 million annual payment to tobacco prevention programs and a trust fund that benefits health and human services. State law sends 40 percent of the money into the trust fund, 32 percent into tobacco prevention programs and 17 percent to insurance plans for low-income and uninsurable children and adults; 11 percent of the money is returned to the state. Sen. Emily Stonington, D-Bozeman, said it may be time to change the law that 65 percent of voters favored in November. "Let's be bold," Stonington told her colleagues on the Joint Appropriations Subcommittee on Health and Human Services on Friday. [Billings Gazette, Jan. 18, 2003]

• 5/31: A Manhattan woman whose husband died of lung cancer should be awarded a portion of the state's tobacco settlement money, the woman's attorney argued Tuesday before the Montana Supreme Court. The case, filed in 1997, was dismissed by District Judge Thomas Honzel in Helena last August. The Supreme Court did not make a decision on the case Tuesday. Darlene Robinson's husband, Donald, died in 1994. Two years earlier, after spending most of his and Darlene's savings on medical bills, Donald had enrolled in Medicaid, a government-funded health care program for the poor and disabled. To get Medicaid, Donald Robinson also had to sign over to the state his right to sue the tobacco companies for the cost of his medical bills, attorney Michael Wheat told the court. [Billings Gazette, May 29, 2002]

• 5/8: Backers of a proposed ballot measure calling for a larger share of the state's tobacco settlement money to pay for prevention and health care costs got the go-ahead Thursday to start collecting signatures. The Alliance for a Healthy Montana, a coalition of mostly health organizations, is the sponsor of Initiative 146. The groups introduced the measure as a way to better fund the state's Tobacco Use Prevention Program and add money to health care programs for the poor. Currently, 60 percent of the state's tobacco settlement money goes to the general fund, and the rest goes to a trust fund approved by voters in 2000. Interest from the fund is dedicated to the state's future health-care costs. The initiative would require 32 percent, or about $9.6 million, of Montana's $30 million annual share of the nationwide tobacco settlement to go toward prevention programs. [Montana Forum, May 3, 2002]

• 4/19: As of this week, Montana has received $91.53 million from the 1998 tobacco settlement agreement, but not enough of that money has been used to keep people from smoking, Attorney General Mike McGrath said Wednesday. "Although it's gratifying to receive settlement payments, it's unfortunate that more of these funds won't help the Montanans who need the most," McGrath said in a press release. "Tobacco--use prevention and public health were the goals of the litigation." The state's latest payment, received this week, was $21.9 million, bringing the total of payments scheduled for 2002 to $30.2 million. [Billings Gazette, April 18, 2002]

• 1/17: Senate Republicans on Tuesday proposed an 18--month hiring freeze on state workers and the use of reserves and tobacco settlement funds to rebalance state finances that were knocked $2 billion out of whack by the recession. The GOP senators also proposed using $1.12 billion in savings accounts and reserve funds and $500 million of the state's $1.2 billion tobacco settlement award. Several other states already have used a substantial part of their tobacco proceeds to deal with budget deficits. [Associated Press, Jan. 16, 2002]

• During the first week of May, a new poll was taken for the Lee Newspapers of Montana which asked voters questions about state politics and policies. Of the 625 registered voters polled, only 14 percent approved of what Governor Judy Martz and the Legislature did with the Tobacco Use Prevention Program, compared with 79 percent who disapproved. Martz and the Legislature cut the budget for the ANTI--SMOKING PROGRAM from $7 million to $1 million over two years. [Billings (MT) Gazette, May 9, 2001]

• As of April 25th, Governor Judy Martz is considering disbanding the Governor's Advisory Council on Tobacco Use Prevention, the board that came up with the state's long--term tobacco prevention program. The news came as no surprise to council members, as there has already been disagreements between them and Martz over ANTI--SMOKING funding. In her budget proposal to the legislature, Martz cut funding for the program from $7 million to $1 million. Dr. Robert Shepard, physician and chairman of the advisory council, said that he had no idea what the governor is thinking. He believes that Martz either does not understand tobacco prevention or simply wants to eliminate the program. [Billings Gazette, April 25, 2001]

• As of April 23rd, the state is considering putting 100% of the tobacco settlement money into a trust fund set aside for health care needs. House Joint Resolution 12, sponsored by representative Christopher Harris of Bozeman, says all of the money received from the tobacco companies should be used for tobacco prevention programs and long--term health care. Voters in November approved an initiative that sends 40% of the state's share of the tobacco settlement to a trust fund dedicated to funding health care programs. Some members of the taxation committee expressed opposition to the bill stating that prevention programs haven't been successful in the past and they questioned whether it's worth funding the education in the future. [KULR Channel 8, April 22, 2001]

• On April 18th, a House--Senate conference committee unanimously voted to move $1 million in state funds and $2 million more in federal disease--prevention money from the Tobacco Use Program into Governor Judy Martz's office interagency prevention resource center, thereby eliminating the Tobacco Use Prevention Program. Senate Finance Chairman Bob Keenan led this charge, saying he wanted less program duplication within the state government. Despite elimination of the program, health advocates were optimistic about the state's ability to continue the program in a new and different way, and decided to hold back criticism until they see what happens. [Gazette State Bureau, April 19, 2001]

• On April 12th, Governor Judy Martz and the Governor's Council on Tobacco Use Prevention disagreed over how money from the tobacco settlement should be spent. Martz and the Legislature have budgeted $1 million over the next two years for the Council, a $6 million cut from what was approved in 1999. While Martz said she believes in the TOBACCO PREVENTION programs, she claims the state does not have the money. The Council argued that spending just $500,000 per year would be a waste of the $8 million to $9 million which has already been poured into tobacco prevention efforts. The Council also suggested raising money by increasing the tax on cigarettes. Martz reasserted her pledge not to raise any taxes, and said "I don't believe habits are something we should tax." [The Missoulian, April 14, 2001]

• On December 1st, the Montana Department of Public Health announced the awarding of almost $300,000 of settlement funds for seven programs to PREVENT TOBACCO USE. The seven grants include education programs to prevent tobacco use among youth, NATIVE AMERICANS, and other adults, as well as an oral health prevention project related to spit tobacco. [AP, December 1, 2000]

• VICTORY for supporters of the ballot initiative which allocates 40% of the tobacco settlement funds to a trust fund with the earnings to go for health programs, which should include TOBACCO PREVENTION & CESSATION, as well as AGING. Early voter returns showed the measure getting about 74% of the vote, with just 26% against. TOBACCO CONTROL and AGING and health groups, as well as the governor, had strongly backed this measure. The other 60% of the settlement funds still go directly to the general fund for the legislature to allocate as they see fit. The legislature also will allocate the earnings from the trust fund, but with the proviso that the money go for health programs. See below for more on this measure. [Billings Gazette, November 8, 2000]

• Attorney Michael Cok of Bozeman filed a lawsuit in District Court on behalf of Darlene Robinson and, Cok hopes, a statewide class of Medicaid recipients suffering from tobacco--related illnesses. The suit contends that the state is obligated to share the tobacco settlement funds with Montana smokers who were required to exhaust their own funds before becoming eligible for Medicaid, as Ms. Robinson had to when her husband became ill and died after a lifetime of smoking. Cok is arguing that the settlement says that the funds should be used not just for Medicaid expenses but all bills related to tobacco illnesses, including those paid by Medicaid recipients themselves. [This suit is undoubtedly similar to other suits filed in Florida, Wisconsin (case dismissed), Colorado, California, and possibly other states.] It is unclear whether this suit will have an impact, at this time, on how the state handles its settlement funds. [AP and MSNBC, Nov. 13, 1999]

• After months of debate, the legislature finally agreed to release $7 million over the next two years to the Department of Public Health and Human Services for TOBACCO PREVENTION AND CESSATION PROGRAMS. However, Nancy Ellery, the administrator of the state Health Policy & Services Division told the state Health Care Advisory Committee last week that the legislature made clear they wanted to see results within the two years, or it would be highly unlikely they would allocate more funds for this purpose when they reconvene for the 2001 legislative session. Therefore, the state will look to existing community and school programs to implement the anti--tobacco programs, and will attempt to utilize ideas, etc. other states have tried successfully. Many health care and anti--smoking advocates were disappointed by the small amount allocated for the programs, but many legislatures wanted to use the funds for tax cuts. Montana will face a challenge in spending the $7 million Ellery said, since the state currently spends just $300,000 for tobacco prevention and cessation. [Billings Gazette, Oct. 25, 1999]

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NEBRASKA

Total: $1.2 billion; 1st paymt $14.3 million; 2nd paymt $38.1 million.

• 5/22: It appears that Nebraska will have the dubious distinction of being tied with three other states for last place in using no Master Settlement Agreement (MSA) funds for their intended purposes. There is still time for our elected representatives in Lincoln to reallocate some of those tobacco settlement dollars to use them as they were intended. However, while tobacco control advocates statewide continue to seek funding from the unicameral, we will also seek alternative grant sources for funding. [Grand Island Independent, May 21, 2003]

• 1/19: Tobacco settlement dollars are propelling the University of Nebraska Medical Center into the research big time, twice as fast as once hoped, the University of Nebraska regents were told Friday. External research funding at the medical center was barely more than $30million in 1998-99, according to Thomas Rosenquist, the medical center vice chancellor for research. This year, research grants and contracts are expected to top out at more than $67million. And, at the current rate of growth, the total will hit $100million by 2004-05. [Lincoln Journal Star, Jan. 18, 2003]

• 5/8: Residents of northern Nebraska from Knox to Cherry counties are twice as likely to die in a car crash as people living elsewhere in the state. They also tend to suffer higher rates of colon cancer, obesity and adult-onset diabetes. A new agency based in O'Neill hopes to reverse those trends. The North Central District Health Department is one of 13 new multicounty health agencies created, so far, thanks to Nebraska's $1.2billion share of a lawsuit settlement with tobacco companies. The funding first became available last May, and already 62 of the state's 93 counties are covered by one of the new health agencies. Other departments are planned that would cover most other counties. [Associated Press, May 5, 2002]

• 3/30: Critics of the states' moves complain that promises about how the tobacco money would be used have vanished like smoke in the wind. "I call it moral treason," said Mike Moore, the Mississippi attorney general who launched the lawsuit, which forced the tobacco industry to agree to pay the 50 states and the District of Columbia $246 billion over a 25--year period. "We won this huge victory against the tobacco industry and all of a sudden it becomes a hollow victory because most of the states are just spending the money on highways or tax relief or whatever the political item of the day is, and that's not what this lawsuit was about," Moore said. It happens because decisions about the way the funds are used were left to "political processes" in each state, said William H. Sorrell, the Vermont attorney general who heads the tobacco committee of the National Association of Attorneys General. "It's a big cookie jar," Sorrell said. Nebraska lawmakers are considering Legislative Bill 1310, which would take $5 million out of a $21 million anti--smoking program financed by the settlement and use it to cover rising Medicaid costs. [Omaha World Herald, March 28, 2002]

• 2/19: State officials have been nudging rural counties to create multicounty public health departments, even promising some tobacco settlement money. Only six of Nebraska's 93 counties haven't asked for the $5,000 in planning money. Officials say five of those counties are working on a plan independently. [USA Today, Feb. 18, 2002]

• 1/18: An anti--tobacco group is criticizing Nebraska for not spending enough of its tobacco settlement money on programs aimed at preventing smoking. The Campaign for Tobacco--Free Kids ranked Nebraska 17th nationally in the money it spends on such programs from its portion of the $206 billion in settlement money. Nebraska and 45 other states agreed to settle claims in 1998 against tobacco companies for the states' costs of treating smoking--related illnesses. Nebraska expects to receive $50 million a year over 25 years, a total of $1.2 billion. [Associated Press, Jan. 17, 2002]

• 12/5: Programs to improve the health of minorities and children, plus raise Lincoln's readiness to address bioterrorism, will be funded from the local share of tobacco settlement money, Mayor Don Wesely said Monday. Nebraska's share of the tobacco settlement was placed in an endowment with interest directed at improving public health for at least 25 years. The tobacco funds will provide the Lincoln--Lancaster County Health Department with about $608,500 annually. Local programs created from that money will work specifically to improve Health Department infrastructure, improve environmental planning, raise public awareness of health issues, create a grant--writing position and better manage statistical data to uncover health trends. [Lincoln Journal Star, Dec. 4, 2001]

• 9/30: The $50 million first--year installment from the tobacco settlement is spreading across the state. It will add 11 mental health and substance abuse counselors at the youth centers in Kearney and Geneva, raise the pay of hundreds of psychologists and counselors who work with low--income Nebraskans, and help adults with developmental disabilities move into supervised apartments and group homes, among other things. State senators decided last legislative session to earmark tobacco settlement funds for health--related programs, from public health to mental health. The money began flowing to local programs July 1, the beginning of the state's fiscal year, and there are some early signs that it is beginning to help. [Lincoln Journal Star, Sept. 30, 2001]

• On May 16th, Governor Mike Johanns signed LB692 which lays out the spending of the settlement money to establish a statewide public health system and bolster health research. Senator Jim Jensen of Omaha, chairman of the Health Committee that worked on the fund distribution, said thousands who previously could not get services now will. The bill will set aside $2.8 million a year specifically for MINORITY health. It will also provide $5,000 next year to each county that seeks to create its own public health system or join with contiguous counties to set up an office. Eighteen public health offices currently serve 24 of Nebraska's 93 counties. The $6 million per year given to public health entities must carry out specific functions, including identifying health problems in a community, diagnosing and preventing hazards and health problems, and educating and empowering people about health issues. In addition to the public health and minority concerns, next year the money will be divided among a number of areas: $10 million will go for medical research at the University of Nebraska, Creighton University and Girls and Boys Town; $18.9 million will be spent on mental health, $5 million will go toward health grants, $3 million will be spent on disabilities, $1 million is set aside for respite care, $1.5 million will be spent on emergency protective care, and $500,000 will fund a mental health study. [The Associated Press, May 18, 2001]

• On March 29th, Governor Mike Johanns signed LB 1436 which allocates $21 million over the next 3 years ($7 million annually) to TOBACCO PREVENTION & CESSATION PROGRAMS. This will enable the state to mount a comprehensive tobacco control program directed at children and adults. The legislation was sponsored by Senator Ardyce Bohlke and puts Nebraska in a leading position in terms of per capita spending on tobacco control efforts, with an average of $4.19 for every man, woman and child in the state. This is a major victory for health and tobacco control advocates. [Omaha World Herald, March 29, 2000 & Lincoln Journal Star, March 30, 2000]

• On March 24th, the unicameral legislature voted 45--0 to enact LB 1436 which allocates $21 million of settlement funds over the next three years to a major TOBACCO PREVENTION & CESSATION PROGRAM. The bill directs that the $7 million annually for the next three years should go directly to fund the TOBACCO CONTROL program rather than going into the existing Nebraska Tobacco Settlement Trust Fund from which interest is available for a variety of health--related programs, including for the ELDERLY. The Health & Human Services System will develop a comprehensive plan for reducing smoking in the state and will then use the funds for this purpose. TOBACCO CONTROL ADVOCATES were thrilled with passage of the bill, which is expected to be signed by Governor Mike Johanns. [Lincoln Journal Star, March 25, 2000 and LB 1436]

• While Attorney General Steve Grasz told legislators that it may be June, 2000 before the state receives its first tobacco settlement funds, the legislature on February 23rd voted 26--0 in favor of dipping into the state Health Care Trust Fund ---- created in 1998 to hold future tobacco settlement funds as well as tens of millions of dollars from a Medicaid transfer program ---- to pay for RESPITE CARE FOR ELDERLY AND DISABLED PEOPLE. After approving the funding mechanism, legislators passed the bill, LB 148, sponsored by Senator Dennis Byars, to the final stage of debate. The amount earmarked for respite care is only $500,000 per year ---- a small amount versus expected deposits into the Health Care Trust Fund ---- but, it reflects the caution of lawmakers in dealing with expenditures from the fund until it is clear when and how much money the state will get. Further, Senator Jim Jensen, a leader in the effort to create the trust fund, said "our goal is not to spend down the principal but to live off the interest on this fund." [Omaha World--Herald 2/25/99]

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NEVADA

Total: $1.2 billion; 1st paymt $14.6 million; 2nd paymt $39.1 million.

• 4/29: A special state task force has granted more than $20 million to nonprofit organizations and government agencies to cover costs of smoking cessation and health care programs. The Task Force For The Fund For A Healthy Nevada decided this week to give the money to 54 organizations. In all, 122 organizations had sought more than $35 million in grants. The task force distributes some of the $48 million a year the state receives from the tobacco industry as part of the settlement of a lawsuit. Other tobacco funds pay for the governor's Millennium Scholarship program and for a prescription drug program for senior citizens. "It was a very tough job for all of us," said Assemblywoman Vivian Freeman, D-Reno, who served on the nine-member task force. "If you needed a lesson on unmet needs in Nevada, then you got it. Those dollars are so precious to them." [Las Vegas Review-Journal, April 27, 2002]

• 4/4: More than 600 elderly Nevadans are now on a waiting list to enroll in the state's low--cost prescription drug insurance program for seniors. Called Senior Rx, the program reached its maximum number of 7,500 in March. The state then put a cap on it because of a limited amount of money. Jane Smedes, who's in charge of the program, said applications are still being accepted but nobody is being added because the state is waiting to see what the next payment will be from tobacco companies. Senior Rx is financed by funds the state receives from a national tobacco settlement. State Treasurer Brian Krolicki said the payment was originally predicted to be $50.7 million, but variables such as cigarette sales can affect the amount. [Associated Press, April 3, 2002]

• 3/8: Governor Kenny Guinn's prescription drug program for low--income senior citizens will reach a crucial point later this month when it tops out at 7,500 enrollees. The tobacco companies will make their regular periodic payment next month. State officials are waiting to see if it is higher than expected, which might allow more people to be enrolled. The payment is based on the amount of cigarettes sold. [Las Vegas Sun, March 6, 2002]

• 1/25: About 42 percent of the high school students who qualify for Millennium Scholarships are taking advantage of the program, according to figures released Wednesday. Of the 4,543 students who received scholarships in 2001, 949 lost them, program administrators say. "We think this is a very common number because freshmen have trouble adjusting to their first year," said Susan Moore, executive director of the Millennium Scholarship Program. The state two years ago decided to use money from the tobacco settlement to give high school students who carry a B average or better $10,000 toward their college tuitions. [Las Vegas Sun, Jan. 24, 2002]

• 11/6: A study panel agreed Monday to take a new look at a rejected plan to trade Nevada's 25--year $1.2 billion tobacco settlement for an estimated $400 million lump sum payment. The proposal died in the Assembly earlier this year, despite arguments from state Treasurer Brian Krolicki that it would erase a risk that the tobacco companies might not exist or be able to pay off the higher amount years from now. Senator Ray Rawson, chairman of the state Task Force for a Healthy Nevada, said the panel wants a detailed presentation from Krolicki to see whether his "securitization" plan should be recommended to the 2003 Legislature. "We really want to get into that pretty deep," said Rawson, R--Las Vegas. "We want to be knowledgeable about it." Rawson added the second look at the lump--sum payment is warranted because of the concern that the long--term payment plan "might go away." [Associated Press, Nov. 5, 2001]

• 10/17: A state task force approved a request Monday for $200,000 in tobacco settlement funds to help laid--off workers provide health care to their children. The Task Force for a Healthy Nevada, which distributes about $3 million a year to help with the health care needs of children, unanimously endorsed the proposal by Assembly Majority Leader Barbara Buckley, D--Las Vegas, the Culinary union and the United Way. The money will flow to the United Way, which will provide funds on a case--by--case basis, Buckley said. The Task Force for a Healthy Nevada has nine members, three of whom are state lawmakers. The panel had about $200,000 left over from the grant review process from last year that was used to help the laid off workers. [Las Vegas Review--Journal, Oct. 16, 2001]

• Two men and six women who have vowed to quit smoking this month will be among Carson City's first tobacco users to benefit from tobacco settlement money. They are enrolled in a free, eight--week course, "Freedom from Smoking," offered by HealthSmart, its Executive Director Kathy Loomis said this week. "This is brand new for Carson City," Loomis said. "They usually charge $75 to $150 per person to take this course, so the savings is huge for these people. They receive all their materials, as well as support and education." Nevada's Fund for a Healthy Nevada received approximately $16 million in 2000 and approximately $19.1 million in 2001 to distribute among various health entities throughout the state. Of those amounts, 20 percent was to be directed toward reducing tobacco use each year. HealthSmart was awarded $93,650 the first year and $115,000 in 2001. The curriculum for the course is used nationwide by The American Lung Association. [Reno Gazette--Journal, August 18, 2001]

• As of March 23rd, the Task Force for the Fund for a Healthy Nevada requested a plan called Senior Option which would help seniors pay for health care. The Task Force, which is an interim committee for overseeing how the tobacco settlement money is spent, created this plan in response to how slow Governor Kenny Guinn's SenioRX program has been to take effect and how little interest there has been in the plan. The SenioRX program was supposed to start in October but did not get up and running until January. Under Guinn's program, seniors pay monthly premiums of $70 to $90 and get discounted prices on drugs and various copays depending on the drug and its cost. As of March 1, only 205 seniors had enrolled in the program and additional 75 applications were in the pipeline. The Senior Option plan, AB545, would be financed by the tobacco settlements money. It would give seniors who earn less than $21,500 a year, a grant of up to $5,000 per year towards their prescriptions. Seniors would have to pay a $25 application fee, a $10 copay for generic drugs and a $25 copay for non--generic brands. A $100 deductible would also be included in the plan. [Associated Press, March 23, 2001]

• On March 5th, Attorney General Frankie Sue Del Papa (D) was applauding a decision by a federal judge to reject a lawsuit by Medicaid recipients who claim they are entitled to part of the $1.2 billion tobacco settlement funds. U.S. District Judge Howard McKibben dismissed the suit on March 1st, ruling the complaint was barred by sovereign immunity. Lawsuits seeking money damages from states are prohibited unless authorized by Congress or a state agrees to be sued. McKibben ruled that Nevada collected only its medical expenses related to tobacco and that Medicaid recipients could sue the tobacco companies for any other damages. Thus far, none of the Medicaid recipient lawsuits that have been filed have succeeded in any state. [Las Vegas Sun, March 5, 2001]

• On September 28th, the Task Force for a Healthy Nevada announced they were distributing more than $6 million of tobacco settlement funds for health and TOBACCO PREVENTION & CESSATION PROGRAMS. The allocations displeased the American Cancer Society because so little was given for TOBACCO CONTROL programs and so much for dental school programs. The Task Force gave $1,300,000 over the next two years to the UNLV School of Dentistry for dental screening programs for high school age youth. $500,000 was given to the Clark County Health District for its TOBACCO CONTROL PROGRAM, and $100,000 went to ACS for its NEVADA TOBACCO PREVENTION COALITION (ACS had asked for $300,000). The University of Nevada, Reno, received $450,000 over the next two years for the GERIATRIC MEDICINE PROGRAM. The United Way, based in Las Vegas, received $750,000 for a statewide computer program to help people access information about health issues through kiosks in health clinics. The Nevada Community Enrichment Center will receive about $500,000 to provide low interest loans to disabled persons for them to use to obtain specialized equipment such as wheelchair lifts and special controls to enable them to use automobiles. [Las Vegas Sun and Tahoe Online, September 29, 2000]

• On Nov. 21st, Governor Kenny Quinn appointed three people to the Task Force for a Healthy Nevada which was created to determine how to allocate the 50% of Nevada's settlement funds which were dedicated by the legislature to health--related programs. As described below, of the 50% of the funds reserved for health programs, they must be split as follows: 30% for a PRESCRIPTION DRUG PROGRAM FOR ELDERS; 30% for IN--HOME SERVICES FOR ELDERS; 20% to REDUCE TOBACCO USE; and 20% to improve health services to children and disabled persons. The Task Force must now hold public hearings and set the priorities for how the money will be spent in the various categories; it will also approve requests for grants from various groups and evaluate whether the programs, once funded, are working. Members of the Task Force were appointed by the governor and legislative leaders and include the following: Dr. John Ellerton, chair of the Clark County Anti--tobacco Task Force; former Assemblywoman Maureen Brower, of the American Heart Asso.; Ed Fend, of AARP; Dr. Elizabeth Fildes, an addiction counselor; Ron Mestre, of the Nevada Lung Asso.; Bill Welch, of the Nevada Asso. of Hospitals and Health Systems; Senator Randolph Townsend (R); Assemblywoman Barbara Buckley (D); and Assemblywoman Vivian Freeman (D). The Task Force will not be responsible for the 40% of the settlement funds allocated to scholarships, nor for the $5 million to be used to construct housing and serviced for disabled persons in Clark County, or the $1 million the Univ. of Nevada School of Medicine will use for enhanced emergency medical services in rural counties, or the $2 million to be used to upgrade Nevada's public broadcasting systems and to provide more than 30,000 ANTI--TOBACCO announcements over 10 years. [Las Vegas Sun, Nov. 22, 1999]

• See Highlights (above) for more info on the historic action the legislature took on May 31st, enacting AB 474 which provides 30% of the settlement funds for AGING PROGRAMS and 10% of the funds for TOBACCO CONTROL PROGRAMS. The bill is now on the Governor's desk and calls for 15% of the settlement funds to go for a PRESCRIPTION DRUG PROGRAM FOR LOW--INCOME SENIORS, AND 15% TO GO FOR PROGRAMS TO ENABLE ELDERS TO REMAIN IN THE COMMUNITY, including respite care, home care, transportation to needed services, etc. TOBACCO CONTROL will receive 10% of the settlement funds, plus some one--time allocations (see below). SB 496 also was passed and provides that 40% of the settlement funds will go for the Governor's scholarship program. Another bill, SB 370 also passed and provides for LONG--TERM CARE INSURANCE FOR THE ELDERLY, apparently also funded by the settlement funds; it is not clear at the moment how this bill meshes with AB 474. More later on this. [Las Vegas SUN, June 1, 1999 and AB 474 and SB 370]

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NEW HAMPSHIRE

Total: $1.3 billion; 1st paymt $16 million; 2nd paymt $42.7 million.

• 2/12: Officials from the New Hampshire Association of Counties (NHAC) want residents of the state to know that local county taxes are being increased unfairly because of the failure of the Legislature to use tobacco settlement money for the purpose intended. The solution, according to Christopher Boothby, Belknap County commissioner and NHAC president, would be to use the money allocated to the state every year from the 1998 state tobacco settlement - from $47 million to $53 million a year until 2025 - to cover Medicaid health-care costs that arise due to ill effects of smoking. Boothby said this year all the tobacco settlement money has gone into the general fund. The NHAC, along with several state legislators, are working to change the funding distribution through House Bill 1339. The bill, if passed, would re-allocate the distribution of the tobacco settlement funds, giving 8.1 percent of the settlement - between $3.8 million and $4.3 million - to counties to pay for increased Medicaid costs. [Portsmouth Herald, February 9, 2004]

• 9/5: The New Hampshire Lung Association said Friday the new state budget will cost lives. The group said by diverting money from anti-smoking programs, more young people will start smoking in the state and more will die from smoking-related illnesses. Under a national agreement with the tobacco industry, New Hampshire receives more than $40 million a year. The Lung Association said the money was intended for anti-smoking programs. [Associated Press, Sept. 5, 2003]

• 7/11: Portsmouth - An anti-smoking group says the Legislature should more than triple the amount of money devoted to state tobacco prevention programs. The Smoke-Free NH Alliance says the state receives , $47 million a year from the 1998 tobacco lawsuit settlement, but tobacco prevention and education programs get only $3 million. The rest goes to public schools and into the state's general fund. [USA Today, July 9, 2002]

• 3/13: The efforts of cancer patients and a former U.S. surgeon general went up in a puff of smoke yesterday, as the New Hampshire House of Representatives voted down a bill aimed at funneling millions of dollars into state anti--smoking programs. Opponents of the bill argued that cash--starved New Hampshire cannot afford the more than $10 million backers wanted the Legislature to transfer from public education to tobacco--use prevention and treatment. Of the more than $40 million New Hampshire received this year from a federal settlement with tobacco companies, most goes to fund public education or other state programs. "I'm very sympathetic with the goal here," said state Rep. Rogers Johnson, R--Stratham, who works as a health care analyst. "But are you willing to give up the education money that's coming to your town? If you can find this money, then let's do this." [Lawrence Eagle--Tribune, March 7, 2002]

• 1/17: New Hampshire spends barely an eighth the amount of money it needs to prevent children from smoking, according to a national report released Tuesday. New Hampshire ranks 37th in the percentage of money received from the 1998 settlement with tobacco companies thatās spent on prevention programs, according to the study. New Hampshire has allocated $1.5 million for fiscal 2002 for prevention programs. The U.S. Centers for Disease Control and Prevention have recommended that New Hampshire spend at least $10.9 million a year. [Associated Press, Jan. 16, 2002]

• 1/7: A bill that would more than triple what New Hampshire spends on smoking prevention and cessation faces "an uphill battle" in the Legislature, predicts the House Finance Committee chairman. House Bill 1376 would distribute $10.8 million -- about one--quarter of the $47 million in tobacco settlement funds the state expects to receive in the coming fiscal year -- to the state's tobacco use prevention fund. That proposed figure comes from national Centers for Disease Control estimates of what it would cost for New Hampshire to mount an effective anti--smoking campaign, based on per capita expenditures in several states that have successfully decreased their smoking rates. The bill's prime sponsor, Rep. James Pilliod, R--Belmont, last week said the $10.8 million investment in smoking prevention is only a fraction of what New Hampshire spends on tobacco--related medical costs every year. Pilliod, who is a physician, said the legislative intent is "to make a very, very loud statement, I hope, to the world that the tobacco settlement was a very, very, very loud surrender by the tobacco companies." The problem, Pilliod contends, was there was no "quid pro quo" for how states would use the annual windfall from the tobacco settlement. However, Rep. Neal Kurk, R--Weare, chairman of the finance committee, which will hear the measure, said asking for increased expenditures of any kind during the current economic downturn will be "a difficult case to make." He noted state law now allocates $3 million a year for anti--smoking efforts. "They want to spend another $7.8 million on tobacco (prevention), and obviously that is $7.8 million that we would have to get from somewhere else," Kurk said. "The real question is, how important is this program compared to other programs that might have to be reduced to pay for this? How important is this relative to the pain it would take to raise additional revenue?" [Manchester The Union--Leader, Jan. 6, 2002]

• Attorney General Phillip McLaughlin said he did not push litigation against the nation's tobacco companies thinking any winnings would disappear into the state's budget. Since the 1998 settlement, lawmakers have used nearly all the money collected to balance the state budget rather than spend it on TOBACCO PREVENTION AND TREATMENT as McLaughlin and other had envisioned. Thanks largely to Senator Jim Squires, $3 million of the approximately $40 million (about 7.5 percent) the state gets each year is earmarked for such programs. But this year, once again facing trouble paying for school aid and other state spending, lawmakers grabbed half of the $3 million. The Centers for Disease Control estimates that New Hampshire would have to spend between $11 million and $25 million a year to build an anti--smoking program that actually reduces smoking. [Associated Press, July 23, 2001]

• A report by the Department of Administrative Services shows the state ended the year with a surplus that will be in the $6 million range when final accounting is done. Despite this good news, the state took a hit in several areas, including the tobacco lawsuit settlement payments, tobacco taxes, car rental tax and a utility property tax. Tobacco settlement payments, off $7.4 million, were down because a number of smaller cigarette companies slip under a threshold that requires them to participate in the settlement, she said. Lawmakers are counting on $47 million annually from the tobacco settlement in the budget that they passed last week. Payments totaled $38.7 million last year. If the settlement payments continue at current levels, they will fall short of plan by about $16 million over two years. [The Union--Leader, July 3, 2001]

• As of April 13th, the House Finance Committee voted along party lines -- with Republicans in the majority ---- to reduce the amount of money spent on ANTI--SMOKING EFFORTS from $3 million to $1.5 million annually. The Centers for Disease Control has recommended that New Hampshire spends at least $11 million annually on anti--smoking efforts. Despite ranking fourth in the nation in the number of teenage girls who smoke (25 percent of the state's teenage girls light up regularly), this was the first year in which New Hampshire had spent any money on this effort. [Keene Sentinel, April 13, 2001]

• On April 27th, the Senate passed a bill which allocates $150,000 for a SMOKING CESSATION VOUCHER PROGRAM for families getting state assistance. This bill appears likely to pass and be signed by the governor. Earlier, on April 17th, Governor Jeanne Shaheen signed a bill which appropriates $2,850,000 for COMMUNITY--BASED AND STATEWIDE TOBACCO PREVENTION & CESSATION PROGRAMS for the fiscal year beginning July 1st. The legislature last year had largely determined how the settlement funds would be spent, with most of the expected $42 million going for education aid to localities, but still had to pass this new legislation to actually appropriate the TOBACCO CONTROL funds. While the $3 million is less than tobacco control advocates had wanted, it is the first time the state has actually used any of its own money for this purpose, and it is a start. The state Department of Health & Human Services will get $150,000 to administer the overall program, but most of the money, about $1,250,000, will go for community--based programs, while $250,000 will go for school--based programs, $100,000 will go for local cessation programs, $700,000 is for anti--tobacco advertising, $100,000 for enforcement of tobacco laws, and $300,000 for evaluation. [Union Leader, April 30, 2000]

• Of the $42 million the state expects to receive shortly in settlement payments, almost all of it will go to communities to help solve the state's education funding crisis. However, $3 million will also go for ANTI--SMOKING PROGRAMS. The funds will largely be distributed by the state Health & Human Services Department to local communities for anti--smoking programs, although the legislature will still have to approve this plan, apparently. [Boston Globe, Nov. 19, 1999]

• Before adjourning for much of the summer, the legislature completed work on a number of items. Among its major actions this year were to enact a 15¢ per pack cigarette tax increase, which will produce about $62 million over the next two years. In addition, the budget provides $3 million a year of settlement funds for ANTI--SMOKING PROGRAMS. The legislature will decide next year what ANTI--SMOKING PROGRAMS will actually receive the funds. The remainder of the settlement income, estimated at about $40 million a year, will go for school aid, according to news reports. [AP in Concord Monitor, July 2, 1999]

• James Gray of the Cancer Society said that New Hampshire should spend $10 per capita to educate young people on the HEALTH RISKS OF TOBACCO USE; he said that Massachusetts spends $8 per capita and has seen a 20% reduction in teen smoking in the last 10 years. Gray also criticized the legislature for earmarking $40 million of the settlement funds for the state's schools (see below). The New Hampshire Tobacco Reduction Task Force has recommended that 25% of the settlement funds go for TOBACCO PREVENTION AND CESSATION. [AP May 10, 1999]

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NEW JERSEY

Total: $7.6 billion; 1st paymt $92.8 million; 2nd paymt $247.9 million.

• 2/28: Investors scooped up $1.654 billion in bonds yesterday backed by New Jersey's remaining share of national tobacco settlement revenues -- a deal that will help boost Gov. James E. McGreevey's proposed state budget. About $1.3 billion of the windfall will be used to help close a big hole in the state budget that takes effect July 1. The rest will be used for expenses or set aside in reserves. The state paid an average interest rate of just under 7 percent on the unusual tax-exempt bonds. It is also more than the 6.37 percent average paid to investors by the state last August, when New Jersey sold $1.8 billion in similar bonds. [Feb. 27, 2003, Star-Ledger]

• 12/13: The Golden LEAF Foundation has signed a letter of intent with BioVista Management to invest up to $30 million in a new venture capital fund that, in turn, will invest in biotech and biopharma companies. With lead financing from Golden LEAF, BioVista Management will create the BioVista Fund, which will invest in life science companies that provide or support jobs in North Carolina. BioVista, which is headquartered in Durham, will be one of the first later-stage biotechnology funds based in North Carolina. The Golden LEAF investment is part of a $85.4 million economic stimulus package the Foundation announced in August. [PR Newswire, Dec. 13, 2002]

• 8/15: Investors bought $1.5 billion worth of bonds Wednesday in a deal that helps New Jersey get money up front from the national tobacco settlement. With the sale, the state joins about 40 other government entities across the nation that have sold a portion of the settlement with the tobacco industry as bonds to cover a budget shortfall. State officials had allocated $1.1 billion in the state budget for the tobacco bond sale. State Treasurer John McCormac said the timing of the sale and the tax-exempt status of the bonds prompted the strong investor response. "Right now, investor confidence in stocks is not as strong as it was and bonds have been trading very well," said McCormac. "Our transaction hit the market at just the right time." New Jersey sold its bonds in mid-August in hopes of avoiding an expected flooded bond market when California sells $4.4 billion in bonds later this year. [Associated Press, August 14, 2002]

• 7/17: New Jersey will sell at least $1.3 billion in bonds backed by payments from a health settlement with tobacco companies, State Treasurer John McCormac said. New Jersey will sell enough bonds to meet the budget requirements of $1.3 billion for fiscal 2003, McCormac said. Fiscal 2003 began July 1. The sale could total as much as $1.7 billion, provided that market demand keeps the interest the state has to pay on the bonds affordable, the treasurer said. The state can sell about $2.5 billion in bonds, based on the more than $7 billion it expects to receive from the tobacco settlement over the next 25 years, the treasurer has said. ``We just didn't think the market was ready for that big of a deal,'' McCormac said. A $2.5 billion sale would have been ``the biggest one to date,'' he said. That large a sale would push up the interest rates the state would have to pay to attract buyers. [Bloomberg News, July 16, 2002]

• 6/9: The finance team that stands to reap millions of dollars managing Governor McGreevey's plan to sell $2.5 billion in tobacco bonds includes a firm with financial ties to a powerful South Jersey political boss and leading Democratic Party fund-raiser, treasury officials disclosed Friday. Commerce Capital Markets, a subsidiary of Commerce Bancorp. of Cherry Hill, was selected as part of a joint underwriting venture with Salomon Smith Barney, the New York-based firm that has managed 11 similar bond deals over the past three years. George Norcross III, who is considered the most powerful Democrat from South Jersey, serves on the board of directors of Commerce and is chairman and chief executive officer of the company's insurance affiliate. Other companies with links to the Democratic Party have also been selected to work on the bond borrowing. Timothy Egan, one of Salomon's senior bankers on the deal, is the son of Joseph V. Egan, a freshman Assemblyman from Middlesex County, according to The Bond Buyer, a journal that covers the public finance industry. McManimon & Scotland, a Newark-based law firm, whose employees gave $21,600 to McGreevey since 1997, was chosen as co-counsel for the bond issue. Republicans quickly pounced on news of the contracts, accusing McGreevey of rewarding political cronies who helped finance the Democratic Party's campaign last year. [Bergen Record, June 9, 2002]

• 5/6: When New Jersey secured a $7.6 billion settlement from the tobacco industry four years ago, state lawmakers acted like giddy lottery winners as they made plans for spending the payout over the next 25 years. New money for crumbling schools. Health care for uninsured indigent patients. Even payments for eyeglasses and dental bills of state workers. Faced with a projected deficit in next year's budget, Governor McGreevey has other plans. McGreevey wants to cash out the payment and collect the settlement in a lump sum. The complex financing plan would allow him to immediately tap up to $2.5 billion from the settlement. [The Bergen Record, May 5, 2002]

• 4/26: The state's looming $5.3 billion budget deficit and the government's failure to find a long-term solution has prompted a second Wall Street bond analyst to lower New Jersey's credit rating. Fitch Ratings downgraded the state's general obligation bond from "AA+" to "AA" and appropriation debt from "AA" to "AA-," which means the state could pay more to borrow money. While the rating is still strong, Fitch analysts said the budget proposal from the McGreevey administration relies too much on one-time funding sources, such as the $1.1 billion from the tobacco settlement, $325 million from the unemployment insurance fund and $373 million from other reserves to bridge the shortfall. "Basically, the proposed budget includes significant nonpermanent measures, particularly the securization of the tobacco money," said Richard Rafael, executive managing director at Fitch. "We took the rating down to reflect the current budgetary problems and the likelihood that it won't be solved quickly." [Camden Courier-Post, April 26, 2002]

• 3/20: Governor James E. McGreevey took aim today at New Jersey's stubborn record of high rates of cancer by designating $28 million from the state's share of the tobacco settlement to expand the Cancer Institute of New Jersey. The institute, founded in 1990, is associated with the University of Medicine and Dentistry of New Jersey. It provides inpatient and outpatient care for children and adults with cancer and conducts research into the disease. The governor is struggling with a huge budget deficit and calls from fellow Democrats to use the tobacco money to bridge the gap. But he said at a news conference here that New Jersey had to come to grips with a disease that, he said, kills 18,000 people in the state each year. "This program will provide direct assistance to understand the most recent medical breakthroughs," Mr. McGreevey said. "We need to understand that we can work collectively to prevent certain kinds of common cancer." New Jersey has one of the highest rates of cancer in the country, far exceeding that of its industrial neighbors, New York and Pennsylvania. [New York Times, March 20, 2002]

• 2/5: A study released by a coalition of anti--smoking organizations has determined only five states are using their tobacco settlement dollars to fund smoking prevention programs at the minimum levels recommended by the Centers for Disease Control in Atlanta. Neither Pennsylvania nor New Jersey were among the five. However, both were listed among the 15 states committing "substantial funding" to tobacco prevention programs. Pennsylvania has allocated 12 percent, or $41.37 million, of the settlement money it has received in fiscal 2002 for smoking--cessation programs. The state is using all its tobacco money for health--care related expenditures. New Jersey has allocated 8 percent, or $30 million, of the settlement money it has received in fiscal 2002 for anti--smoking programs. Overall, the state is using most of its tobacco funds for health--care activities [Philadelphia Business Journal, Feb. 1, 2002]

• 2/3: Governor James E. McGreevey said borrowing money now against future payments from tobacco companies is a sound idea because it will protect New Jersey taxpayers from the risk of the payments drying up. Speaking to a luncheon of newspaper editors yesterday, McGreevey confirmed his administration would borrow from Wall Street investors by issuing bonds to be repaid with proceeds from the national tobacco settlement. New Jersey is expecting about $360 million in the current fiscal year and another $6.7 billion through 2025. Republicans have reacted sharply to the proposal since McGreevey's aides confirmed it Wednesday. The GOP is claiming he is reversing his own position after having spent years on the campaign trail accusing former Republican Gov. Christie Whitman of half--baked debt schemes. But McGreevey yesterday said there was a difference between borrowing money against future lawsuit payments from private companies and a debt that taxpayers must repay. McGreevey said there is no guarantee the tobacco companies will complete the payments in the coming decades. He said by borrowing it up front, New Jersey benefits from the money while the investors who buy the bonds accept the risk. [Associated Press, Feb. 1, 2002]

• 12/6: Advisers to Governor elect Jim McGreevey are considering a plan to have the state borrow up to $2 billion from New Jersey's federal tobacco settlement to help ease a looming budget crunch. McGreevey's transition budget chief, Anthony Coscia, said the proposal is one of many budget--balancing strategies being explored, and has not been recommended to McGreevey at this point. Under the plan, New Jersey would immediately get up to $2 billion by taking out a loan against the settlement's future income, which is expected to top $7 billion over the next quarter--century. While the state would get an immediate infusion of cash that could avert sharp layoffs or higher taxes during a severe budget squeeze, there would be a cost: up to $1.6 billion in interest payments over the next 25 years or so. The McGreevey team estimates that the state, due to a stalled economy, faces a shortfall of up to $1.9 billion in the current budget year, which ends June 30, and another $3.7 billion revenue shortfall in the next budget year. [Star Ledger, Dec. 5, 2001]

• On June 29th, Acting Governor Donald DiFrancesco signed the $22.9 billion fiscal year 2002 budget. In the legislation, the Tobacco Settlement Fund was reestablished and continued from previous fiscal year. Of the $365 million, it appears that $82 million was allocated towards services that benefit the ELDERLY. Of the $82 million, $20 million will be used for ElderCare Initiatives, $50 million for the Senior Gold Pharmaceutical Assistance program, and $12 million for nursing homes spousal income. Another $32 million will be used for TOBACCO CONTOL AND CESSATION PROGRAMS, $65 million for school facilities construction and renovation, $165 million for NJ Family Care and other health care initiatives, $18 million for Supplemental Charity Care, and $1.5 million is given to the Office on Minority and Multicultural Health. [S2500 and News Release from the Office of the Governor, June 29, 2001]

• When the legislature enacted the FY'01 budget, it appears to have given major new, expanded funding to AGING and TOBACCO PREVENTION & CESSATION PROGRAMS from the settlement funds. It allocated the settlement funds to a variety of programs, including children's health care, the New Jersey Family Care Subsidy Insurance Program and hospital charity care. LONG--TERM CARE FUNDING FOR ELDERS, including new and expanded community options, received $60.959 million, up from $39.198 million in FY'00. The PRESCRIPTION DRUG PROGRAM for ELDERS also received funding, but the amount is not clear at this time. Education funding, including renovation of school buildings, was about $11.9 million. TOBACCO PREVENTION & CONTROL PROGRAMS received $30 million, up from $18.562 million in FY'00. [Report of National Conference of State Legislatures, August 1, 2000]

• On Feb. 15th, lawyers for New Jersey and the plaintiffs lawyers for smokers who have been seeking more settlement funds for SMOKING CESSATION PROGRAMS reached a final settlement of their lawsuit. This will give New Jersey state specific finality of its overall settlement agreement and enable the state to receive its settlement payments and begin spending the money. Under the agreement, the governor will seek $30 million annually for TOBACCO PREVENTION & CESSATION PROGRAMS, with $8.7 million for SMOKING CESSATION (an increase over the $6 million she had sought in her budget for the coming year), $6.3 million for an ANTI--SMOKING media campaign, and additional funds for comprehensive anti--tobacco efforts. New Jersey Breathes feels the $6.3 million is too little for an effective media campaign and is seeking $15 million for this purpose, for a total ANTI--TOBACCO budget of $45 million annually, with a substantial portion devoted to smoking cessation. [The Star--Ledger, Feb. 16, 2000]

• Governor Christie Whitman, in presenting her annual budget message on Jan. 24th, set forth her 25 year plan for spending the settlement funds. Under her proposal, which the legislature must act on, the money would go annually for the following purposes: $100 for health insurance for low--income persons; $30 million for TOBACCO PREVENTION & CESSATION PROGRAMS; $30 million for COMMUNITY--BASED SERVICES FOR ELDERS; $10 million for cancer treatment and research; $10 million for biomedical and other high--tech research; and $12 million for aid for hospitals which provide charity care to patients. Most of the remaining funds, about $100 million a year, would go for repaying bonds used to build and repair schools. This plan would be for fiscal year 2001 and after. For the coming fiscal year, she proposed using $143 million for the hospital's charity care programs; $50 million to pay doctors and hospitals left with unpaid bills from two HMOs that failed; $30 million for TOBACCO PREVENTION & CESSATION; $10 million for new mental health programs for children; $10 million for biotechnology research; and $3 million for a raise in Medicaid rates for dentists. This would suggest that some of the programs paid for in the past year's budget out of settlement funds, such as the $8.7 million for PRESCRIPTION DRUGS FOR ELDERS & DISABLED PERSONS, and $10.5 million for COMMUNITY--BASED CARE FOR ELDERS most likely would come out of general revenues; although this is not yet clear. Whitman's plans are nowhere near a done deal at this time, according to legislative leaders. [Bergen Record, Jan. 25, 2000]

• Following the recommendation of Governor Christie Whitman, the legislature passed the FY'2000 and allocated $18.6 million for TOBACCO PREVENTION AND CESSATION PROGRAMS, and allocated $19.2 million for AGING PROGRAMS, with $8.7 million for EXPANSION OF THE PRESCRIPTION DRUG PROGRAM FOR SENIORS AND DISABLED PERSONS and $10.5 million for COMMUNITY--BASED LONG--TERM CARE ALTERNATIVES FOR ELDERS. Thus, both programs received about 20% of the total $92.8 million first settlement payment, which is quite a victory for both groups. Planning is now going on for how future settlement payments should be allocated. [TCSG sources in New jersey, July 16, 1999]

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NEW MEXICO

Total: $1.2 billion; 1st paymt $14.3 million; 2nd paymt $38.2 million.

• 3/19: To help balance the proposed spending with anticipated revenues, lawmakers are assuming approval of several measures to generate an additional $107 million for the state next year: an insurance-tax change involving Medicaid payments, an increase in the state cigarette tax, a constitutional amendment to increase the annual distribution of income from a state permanent fund and making the full yearly allotment of tobacco-settlement revenues available for general budget spending. [Associated Press, March 19, 2003

• 3/6: The House still isn't giving in to Governor Bill Richardson's proposal to dismantle a tobacco settlement permanent fund to help pay the state's growing expenses for health care. A House committee endorsed legislation on Saturday to free up more tobacco revenues to pay for budget increases but keep the permanent fund intact. The measure was developed by House Democratic leaders as an alternative to Richardson's plan to abolish the tobacco permanent fund and use all tobacco revenues annually for government operations, including the rising cost of Medicaid. Richardson and lawmakers have been at odds over the use of tobacco revenues. [The Associated Press, March 2, 2003]

• 2/6: A bill to abolish the New Mexico's $57 million tobacco settlement fund and use the money to pay down the state's Medicaid debt has passed a crucial Senate committee. Senate Bill 298, sponsored by Senate Majority Leader Manny Aragon, an Albuquerque Democrat, passed the committee Tuesday on a 5-4 party line vote. It now goes to the Senate floor, but a vote has not been scheduled. Governor Bill Richardson had called for using the tobacco settlement for Medicaid in his budget plan. The state's Medicaid deficit is about $100 million, according to the Office of Finance and Administration. "The governor has stated that the state needs to prioritize our needs. Health care and children's insurance are among the governor's greatest concerns," Richardson spokesman Billy Sparks said. [Albuquerque Tribune, Feb. 5, 2003]

• 1/30: The state of New Mexico faces an enormous challenge of trying to control Medicaid. The legislature finds itself with the prospect of raiding the tobacco settlement funds to simply meet the state's portion of the $1.75 total health benefits for low-income children and adults. The short term, quick fix is to find the money to shore up the fund. However, there needs to be a more bold approach to solve this dilemma for the long term. [Hobbs News-Sun, Jan. 30, 2003]

• 2/12: House Democrats say they haven't given up on their plan to use tobacco--settlement money to help offset the increased price of health care for the poor, despite Gov. Gary Johnson's decision to veto that idea Friday. "We're still looking at the tobacco money," House Speaker Ben Luj‡n, D--NambŽ, said of the proposal (HB8). "We're going to put it in the (revised budget) bill" that lawmakers hope to send to Johnson on Monday. With five days left in the 2002 Legislative session, however, many Roundhouse observers are starting to wonder whether any compromise can be reached on either the budget or the issue of tobacco--settlement money. David McCumber, Johnson's chief--of--staff, said the governor vetoed HB8 for two reasons: It would have compounded the state's financial problems down the road, and it spends tobacco--settlement money on programs it was never meant to fund. Facing a multimillion--dollar shortfall in the state Medicaid system, Democrats propose dipping into the state's tobacco--settlement funds rather than slash services or cut eligibility levels, arguing it is proper to spend the tobacco money on public--health issues. [The New Mexican, Feb. 10, 2002]

• Before the legislature adjourned, lawmakers allocated $5 million of the tobacco settlement for the Department of Health to be use for TOBACCO PREVENTION for fiscal year 2002. This is an increase from the $2.25 million the department received last year. [Tobacco Free Press, June 22, 2001]

• Eight Northern Indian Pueblos Inc. will receive $144,355 toward a program aimed at cutting smoking and tobacco use within the community. This funding comes out of the $1.2 million New Mexico expects to receive over the next 24 years from the National Settlement Agreement. Members of the New Mexico legislative Tobacco Settlement Committee reviewed earlier this week a list of programs that will receive $2.2 million from the State Health Department in the new fiscal year. Concerns that the sale of discount cigarettes are encouraging increased tobacco consumption have raised the question of whether or not Tribes should drop their tax exemption status. Roy Bernal; Former chairman of the All Indian Pueblo Council in New Mexico said "Indian people are entitled to a lot more than just $144,000" He further stated that he was speaking as a private citizen and not as a lobbyist for the eight northern pueblos. [Journal Capital Bureau]

• The FY'01 budget enacted by the legislature appears to have funding of $2.225 million for TOBACCO PREVENTION & CESSATION PROGRAMS. About $19 million went for a variety of health care programs, including Medicaid, which may mean some went for AGING programs, although that is not clear at this time. Education received the biggest share of the settlement funds, getting $275 million. Research on tobacco--related illnesses received $2.5 million. More later on specifics. [Report of National Conference of State Legislatures, August 1, 2000]

• On Feb. 8th, the Senate voted 22--17 to support a bill which would save half the settlement funds in a trust fund and spend the other half on a variety of programs. Earlier the legislature's Tobacco Settlement Committee had recommended saving 60% and spending 40%, but the Democratic leadership in the Senate decided to spend more. Of the more than $24 million in settlement funds available for spending next year, the budget approved by the Senate allocates $14 million for the Medicaid program, including about $4 million to expand Medicaid coverage for about 35,000 working poor; it isn't clear if all $14 million would be for new and expanded programs or for existing program commitments. Only $500,000 was allocated for TOBACCO PREVENTION & CESSATION PROGRAMS, leading Linda Siegle of the ACS and ALS to say she was "appalled" by the less than 1% of the settlement funds that would be spent on this crucial area. It isn't clear at the moment what other spending priorities are in the bill. [Albuquerque News, Feb. 10, 2000]

• Governor Johnson signed HB 501 (described in notes below) on April 6th. This law, among other things, creates a Tobacco Settlement Committee which will conduct hearing and makes recommendations to the legislature by December 15, 1999 on what should be done with the settlement funds. This committee could be a very important vehicle in coming months for TOBACCO CONTROL and AGING GROUPS to make their case to for how the settlement funds should be spent. House Speaker Raymond Sanchez (D) had filed HB 501 which would place all settlement funds in a Tobacco Settlement Permanent Fund which would be invested and annual distributions would be made from the fund into a Tobacco Settlement Income Fund which would then be appropriated by the legislature for health and education purposes. The annual distribution would be equal to 4.7% of the average market values of the fund for the immediately preceding two fiscal years. Money in the Income Fund could be appropriated for a wide variety of programs, including: public school programs, including extracurricular programs, such as athletics, music, cultural, etc.; any health or health care programs for treatment or prevention of disease or illness; TOBACCO--RELATED RESEARCH; and public health programs. Among the programs which could be funded would be SMOKING PREVENTION CAMPAIGNS. Further, a Tobacco Settlement Committee would be created to recommend to the legislature by Dec. 15, 1999 what should be done with the settlement funds and any other legislative recommendations. [TCSG sources in N.M., April 7,1999 and AP report 2/10/99 and HB 501]

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NEW YORK

Total: $25 billion; 1st paymt $306.3 million; 2nd paymt $818.3 million.

New York's portion of the settlement with tobacco companies has been finalized and New York City and all 57 counties have been notified how much they can expect to get each year through 2025, state Attorney General Eliot Spitzer announced on Sept. 22nd. New York will get $25 billion, with additional payments continuing after 2025, Attorney General Eliot Spitzer said. The state will receive 51.1 percent of the tobacco money. New York City will get 26.6 percent, and counties outside New York City will share the remaining 22.3 percent. The payment formulas were upheld by the Appellate Division of state Supreme Court. Local governments will begin receiving payments no later than next July. [AP 9/23/99]

• Chautauqua County 10/13: Chautauqua County will be able to use $7.4 million in tobacco bond funds for capital projects, such as roads and bridges. A change in the IRS regulations will permit this use, according to County Executive Mark Thomas, former County Finance Director Robert Beckman and County Finance Director Jean Blackmore. Thomas said, "We have budgeted $2.1 million of this tobacco bond money for the 2004 budget, leaving over $5 million in reserve for capital inventment in future years." [Buffalo News, Oct. 12, 2003]

• Niagra County 5/13: The Niagara County Legislature virtually depleted its tobacco bond revenue Tuesday by allocating $1 million to renovate the Niagara County Community College Health Education Center. The project, including major renovations of the gymnasium, locker rooms, training rooms and health education facilities, will total $2 million. The State University Construction Fund will provide the other half. Only $21,366 remains in the tobacco fund, including interest earned on the money while the county was waiting to spend it. The county took 21/2 years to spend the $19 million left for projects after the county's previous debts had been paid off. [Buffalo News, May 7, 2003]

• 3/27: Legislative leaders Tuesday agreed to a plan to borrow $4.2 billion to pay immediate state operating expenses in a pact that pressures Governor George Pataki and lawmakers to come to a deal on a new budget. A Pataki spokesman called the plan a flawed "step in the right direction," but had no information on the governor's concerns. The agreement, to be printed in a bill expected to be passed Monday, was announced by Senate and Assembly leaders as a compromise to get budget talks moving. The plan would allow the governor to borrow $4.2 billion by trading away part of New York's stake in the nationwide settlement with cigarette companies, as Pataki has proposed, but not the way he wants. [Albany Times-Union, Mar. 27, 2003]

• New York State 1/10: New York Gov. George E. Pataki yesterday vowed to solve the state's looming budget crisis by selling tobacco bonds and cutting spending Another item in the governor's budget sure to trigger controversy is his plan to borrow against tobacco settlement payments due to the state, which are currently calculated at $12 billion over 25 years. Some of that money is passed on to local governments. Pataki last month proposed selling $4 billion in bonds backed by annual payments from the national tobacco settlement. The Legislature is due to consider the measure in the coming months. According to the New York Times, the state's share of the tobacco funds is currently used for several health care programs. The decision to shun tax increases and instead use tobacco bond revenue to plug budget gaps sets up a possible showdown with the Assembly, whose speaker has viewed Pataki's plan to borrow against tobacco settlement revenues with skepticism. State Comptroller Alan Hevesi has also criticized the plan, saying tobacco bonds should be a measure of last resort. New York State has not securitized any of its tobacco settlement proceeds, but a number of its counties, as well as New York City, have sold tobacco bonds. [Bond Buyer Online, Jan. 9, 2003]

• 12/16: Governor George Pataki's plan to borrow up to $4 billion to see the state through a budget deficit wasn't exactly plucked from the fiscal conservative playbook. But the idea, which Pataki unveiled last week, is in line with the moderate crowd-pleasing tactics he has used since 1995 and 1996, the first two years of his tenure when he was more likely to cut taxes and spending. Pataki's plan involves borrowing against a $400 million-a-year stream of revenue the state is expecting from its share of a 1998 national settlement with tobacco companies. Borrowing $4 billion from that stream would ultimately cost state taxpayers as much as $7 billion to repay principal and interest over the next 16 or 17 years, according to Pataki aides. They anticipate $10 billion in tobacco settlement income over the next 25 years. The state has a deficit of $2 billion in the current fiscal year, which ends March 31. The deficit could be as much as $10 billion in 2003-04. The tobacco settlement plan would not address more than a small part of the expected 2003-2004 deficit. [Syracuse Post-Standard, Dec. 15, 2002]

• New York State 12/11: New York may need to give up billions of dollars in long-term tobacco income for a quick influx of cash to help close a wide budget gap this year, Gov. George Pataki said Tuesday. Pataki said he'll ask the state Legislature next week to authorize him to sell off a large chunk of the state's future payments from the national tobacco settlement to get about $4 billion in March. The state would sell government-backed bonds, using future tobacco payments essentially as collateral. This would help the state cover a budget shortfall estimated at $2 billion this year and $10 billion next year. The governor, re-elected last month, stopped short of saying he definitely would sell off the tobacco payments. He just wants the authorization if the economic slump continues through the fiscal year, which ends March 31. The plan drew skepticism from fiscal watchdogs, anti-smoking groups and one of the most influential unions in the state. "It sounds like very bad news," said Elizabeth Lynam of the Citizens Budget Commission. "It's a strategy to postpone hard choices that need to be made. It sounds like: let's just get by a few months at a time and find out how we can borrow from Peter to pay Paul." Tobacco payments have "been funding tobacco-prevention programs in New York, which have saved lives and money," said Russell Sciandra of the Center for a Tobacco Free New York. [Ithica Journal, Dec. 11, 2002]

• Niagara Falls County 8/25: A proposal to buy a $90,000 bus for hauling prisoners to and from the County Jail and Niagara Falls City Court is on hold. The County Legislature Finance Committee this week withdrew the item, asking Sheriff Thomas A. Beilein to make a formal request for the use of tobacco bond revenue. Beilein had wanted to spend money generated by a contract with AT&T, which gives the county 44 percent of the revenue from pay phones in the jail. [