Originally created 07/04/05

Small part is spent on prevention



ATLANTA - The millions of dollars states receive from tobacco companies every year have gone to plugging everything from budget holes to pot holes.

But when it comes to preventing smoking, state governments have dedicated only a small part of their settlement money to getting their residents to kick the habit or avoid it all together.

Not even 5 percent of the $39.5 billion the states have received in the past couple of years has gone toward preventing tobacco use, while lawmakers facing tough budget times used the funds to shoulder up other programs.

Some of the money was used to:

- Help prison inmates participate in religious-based rehabilitation programs

- Give money for textbooks to private schools in Maryland

- Buy new sprinkler systems and golf carts for a golf course in New York

Many states simply dumped the money into their general budget pot or used it to get them through recent lean years.

Even with budget conditions improving for most states, the amount of money spent on curbing the nation's No. 1 cause of preventable death continues to be only a few drops of the cash flooding in from the massive settlement reached with tobacco companies in the late '90s.

Taxpayers who learn of how the money is spent are often angry, like Jamal Al-Asadi, a smoker from Atlanta who believes his cigarette purchases fuel the settlement.

"I thought that was what the settlement was about anyway, to help people stop smoking," he said. "It's money that's coming out of my pocket. It should be spent as carefully as any other."

IN 1998, STATES SUED the nation's largest tobacco companies to pay for the health care costs of treating smokers.

In what was the largest civil settlement in U.S. history, 46 states reached an agreement to receive $206 billion from the industry over 25 years. An additional four states - Florida, Minnesota, Mississippi and Texas - settled separately, adding another $40 billion to the payout.

The settlement did not stipulate how states had to spend the money they received.

When Georgia Attorney General Thurbert Baker signed onto the deal, he said the payments would bring in an estimated $4.8 billion for the state but described the long-term health benefits as "incalculable."

In Georgia, state officials use a third of their annual allotment on an economic development grant program created in 2000 for rural communities. The money now can go to projects in all but 12 of the state's 159 counties - even where tobacco was not grown - and has been used recently to buy private companies land for their warehouses, dress up an aging hotel, and create the Crime & Punishment Museum and Last Meal Cafe in the remote town of Ashland, more than 100 miles from any concentration of tourists.

At the same time, the state put less than $12 million toward tobacco prevention during each of the past two years, though it spread the money across programs such as a telephone hot line to help people quit and enforcement of laws against underage smoking.

Georgia does put part of its annual settlement share into cancer research. Health programs gobble up the largest share of the state's settlement, but in terms of targeting a major cause of those medical costs - smoking - Georgia is like most states in falling far below the level recommended by the U.S. Centers for Disease Control and Prevention.

Recently, nearly seven years after reaching the settlement agreement, Mr. Baker said the Legislature has not done as much as he hoped with the money in the area of curbing smoking.

SINCE THE SETTLEMENT was reached, lawmakers across the country have used money for a variety of projects unrelated to tobacco use.

Alaska used $35 million for harbor improvements. Michigan created college grants. South Dakota put millions into cleaning up surface mines.

A large portion of the money has been spent on health programs, but that can range from addressing rising Medicaid costs to prescription drug benefits for seniors - essentially a perpetual effort of catch-up rather than trying to get ahead of the main cause of these escalating expenses.

Some states also have used the money to fill emptying coffers.

A few years after tobacco companies began making annual payments to the states in 1999, the economy slowed down significantly, tempting politicians to tap a source of cash that did not require raising taxes.

Money for newly created tobacco-use programs was scaled down or cut out completely.

In 2002, states used 14 percent of the $6.2 billion solely to meet budget shortfalls while also using the money for infrastructure projects, such as school construction and water and sewer projects.

A dozen states also cashed in their settlement deals, getting their money up front by issuing bonds that will be paid back by future tobacco payments. In 2002 and 2003, the states took their lump sums and used most of the $10.6 billion to fill budget gaps. For many, it means there will not be money down the road to invest in anti-tobacco campaigns.

Scott Pattison, the director of the National Association of State Budget Officers, said states are allowed to spend the money how they need to.

"There were no strings attached to those funds provided to the states, and the justification was that smoking-related diseases and other smoking-related health care issues had caused them to expend quite a bit of money over the years," he said. "This was, in effect, a way of reimbursing some of that."

STATE REVENUE COLLECTIONS late last year and this year are growing stronger than they have in more than a decade, according to the Nelson A. Rockefeller Institute of Government, the State University of New York's public policy research arm.

But that turnaround has not meant more money allocated to tobacco prevention programs.

In 2004, the states reported spending 44 percent, or $11.4 billion, for budget shortfalls. During the 2005 budget year, states expected to spend $5 billion for balancing their books.

Tobacco control programs received only 2 percent of the settlement money last year, though they were expected to get 4.5 percent of the pot this budget year, according to the federal Government Accountability Office.