Straying Tobacco Funds

When 46 states and several localities brought their mega-lawsuit against the tobacco industry, they argued they deserved reimbursement for the public health costs of treating sick smokers and funding programs to help stop children from becoming smokers. But with money starting to come in from last year’s $206-billion settlement, some of those same cities, counties and states have found all sorts of creative uses for the windfall, many of which have nothing to do with smoking or even health care.

State and local officials, so used to making do with budget shortfalls, can be forgiven for being seduced by new spending prospects. But to the extent that they use these funds for sidewalk repairs, school construction and new prisons, they break faith with the public on whose behalf they brought suit.

When they signed the historic agreement, the 46 state attorneys general insisted that their goal was not money but keeping teenagers from tobacco. Studies indicate that aggressive antismoking programs have had a big effect on teenage smoking and that fewer smokers mean less public cost to treat diseases caused by cigarettes. Now, a year after the tobacco settlement, just 8% of the settlement money has been earmarked for antismoking programs, according to the National Conference of State Legislatures.

Most of the signatory states began getting their money this month, and some $8.7 billion is expected to be paid out in the coming year alone. The rest of the money will be allotted over 25 years.

The settlement imposes no restrictions on how this money is to be spent. States have allocated a large part, about 54%, to a broad range of health-related programs, including better health benefits for state workers and funds for biomedical research. Los Angeles County, which was a separate party to the lawsuit, will do even better. The Board of Supervisors late last year decided to allocate all of its $3.35-billion share to health services--to county hospitals, clinics, AIDS prevention and treatment programs and the like.

But in other states and localities, billions are going directly into general funds, to offset tax cuts, and toward a myriad of construction projects. The city of Los Angeles, also a separate party, is considering using its share to repair broken sidewalks and bring curbs into compliance with the Americans With Disabilities Act. Orange County plans to use 80% of its $912 million for more jail beds and to reduce debts. In some states, little or no money is going toward smoking prevention.

The California state government is an unusual case. Sacramento has decided to put its $25-billion share into the general fund. It already has one of the largest tobacco control programs in the country, funded through a cigarette excise tax. But the many state health care delivery, insurance and related programs that California taxpayers fund would seem an especially appropriate use of the tobacco settlement funds. An initiative to this effect, possibly for the November 2000 ballot, is being circulated by a coalition of major hospital, doctor and consumer groups.

For public officials to simply drop the money into the public spending pail, in California or anywhere, is to tell the public, “Forget what we promise--we’ll do as we please.”