Some health groups are not pleased with Gov. Bob Taft’s proposal to use tobacco settlement dollars to help balance the budget, and they are letting him know it.
An estimated $1.3 billion out of Ohio’s $10.1-billion share of the settlement between the United States and the nation’s tobacco companies was slated to go toward tobacco prevention programs through fiscal year 2012. But Taft, facing a financial crisis, proposes moving the money earmarked for tobacco prevention and cessation through at least 2004 into the general revenue fund.
After learning the funds could be diverted, the Coalition for a Healthier Ohio, which represents 172 anti-smoking groups started an information campaign to let the public know the tobacco settlement money is not being used as was intended.
The coalition ran radio and newspaper advertisements intended to inform the public as well as ask “the legislature and the governor to keep their promise to protect Ohio’s kids from tobacco and to use the settlement dollars earmarked for prevention for those programs rather than using it to balance the budget,” said Tracy E. Sabetta, project director for the coalition.
Since the advertising campaign started in January, Sabetta said hundreds of people have written their legislators through the coalition’s Web site.
“(We want concerned constituents) to make tobacco prevention a priority in their communities, and they would like the legislators to make it a priority as well,” Sabetta said.
The dangers of smoking
The Coalition for a Healthier Ohio is concerned about the estimated 36,800 Ohio children it says will get addicted to tobacco this year, as well as the one in three who will die prematurely from a tobacco addiction. The coalition started its campaign in January, asking Taft if he would protect tobacco prevention dollars this year. The postcard campaign was an initial phase in a much longer plan to reduce tobacco use.
“The plan that we have in place is a long-term campaign plan to protect these funds. It will also include a very large grass-roots mobilization component,” Sabetta said.
“There are thousands and thousands of Ohioans that are concerned that these dollars are being taken away from tobacco prevention,” she said.
“We will make sure that legislators and the governor hear from their constituents that they want them to leave these dollars where they were intended,” he said.
The day after the governor introduced his budget proposal, the coalition and Tobacco Use Prevention and Control Foundation held an information briefing with Ohio legislators to educate them on the benefits of a tobacco prevention program. They told legislators about how the money was originally intended to be spent, how it is now being spent and how other states are investing in smoking prevention programs to decrease their smoking rates.
Settling with the tobacco industry
A national settlement agreement was signed with U.S. tobacco companies and 46 states on Nov. 23, 1998. A total of $206 billion will be distributed to the states over 25 years. The four states not included in the settlement — Florida, Minnesota, Mississippi and Texas — had already settled with the tobacco industry before the master settlement agreement was signed.
The Ohio legislature had to create organizations to use the money the state would receive. Senate Bill 192 created seven trust funds — one of which was for the prevention and cessation of tobacco use — that would receive Ohio’s estimated share of $10.1 billion over the first 25 years of the tobacco settlement.
The Tobacco Use Prevention and Control Foundation was created to use the money allotted to the tobacco prevention and cessation trust fund. In 2001, the foundation received an initial payment of $330 million to fund its program. Since then, there has been no additional contribution to the foundation.
Senate Bill 242, passed last year, has allowed the funds to be diverted from the foundation and put into the general revenue fund.
“(The bill was) introduced because the Ohio Constitution does not allow the state to borrow money — it has to appropriate it,” said Chris George, legislative aide to Sen. James E. Carnes, R-St. Clairsville.
“The financial situation of the state dictated it to be borrowed with the intention of paying it back,” he said.
Ohio’s looming budget crisis has caused Taft to take the money originally allocated to the tobacco prevention foundation in the current biennium — a total of $240 million. The executive budget proposal for fiscal years 2004-2005 would take tobacco dollars from at least fiscal year 2004 — $112 million — and place the money in the general revenue fund. The 2002-2003 money would be paid back to the foundation in 2012 and 2013.
“The (reallocation) is going to affect our ability to continue our program in the future,” said Beth Schieber, spokeswoman for the tobacco prevention foundation.
The money taken from the foundation is only 1 percent of the Ohio budget, according to the Office of Budget and Management.
“(The tobacco settlement) is a big pile of money that isn’t that big once it’s divided up,” said Mark Gribben, spokesman for Ohio Attorney General Jim Petro.
While the coalition is disappointed Ohio leaders are not “keeping their promise,” others, including some tobacco-free organizations, say the legislature does not have an obligation to use the money strictly for tobacco use prevention and cessation.
“States can do anything they want with the money,” said Eric Lindblom, manager for policy research at the National Center for Tobacco-Free Kids. “(But) people expected that a big chunk would go to tobacco prevention.”
Only four states meet the Centers for Disease Control and Prevention’s minimum requirements for adequate funding for tobacco prevention programs. The CDCP ranked Ohio No. 24 in funding, up from No. 31 in 2002, according to the National Center for Tobacco-Free Kids.
Funding the future
Some of the settlement money goes to Ohio State. As a part of Taft’s Third Frontier Project and the Biomedical Research Technology Transfer Committee, $12.5 million was granted for medical research, largely for two studies.
Mauro Ferrari will research coronary artery disease. The work “will lead to early detection of potentially fatal defects and provide for new techniques to treat and manage coronary artery disease,” a statement said.
The other study, led by Dr. Joel Saltz, will lead to accelerated advances in human medicine.
While the biomedical research committee receives money every year, the tobacco use prevention and cessation trust fund was supposed to receive the bulk of its money from fiscal year 2000-2006. The fund was front-loaded so it could operate on the interest alone.
Taft’s proposal to divert the money to the general revenue fund would prevent the tobacco prevention foundation from receiving additional funding until the money is paid back in 2013-2014. The foundation is not allowed to receive tax dollars to fund the program.
“It’s very hard to live off the interest when you are not receiving any additional principal,” Sabetta said.
While Taft said he is not pleased with the decision to take the money from tobacco use prevention foundation, he contended it was necessary to cope with Ohio’s budget situation.
“The governor believes (the foundation) can have a strong program with the principal they already have,” said Taft spokesman Orest Holubec.
Working toward a solution
The tobacco prevention foundation already has some anti-smoking programs in place, but if funds are borrowed from the foundation, the programs will suffer, foundation representatives said.
“A lot of programs have been implemented, but the delivery may be different with diverted funds,” Gribben said.
A poll conducted by the Coalition for a Healthier Ohio suggests voters believe the state legislature needs to find an alternative solution to the budget problem even though programs have been put in place.
“Right now, Ohio spends $456 million annually in just the state’s share of Medicaid to treat sick smokers,” Sabetta said. “That’s about $560 per household in state and federal taxes to treat those who are addicted to tobacco products. The governor has made it clear that one of the largest contributors to Ohio’s budget deficit is a spiraling Medicaid budget. It’s not just a matter of saving lives, but also saving dollars.”
The Ohio legislature is devising its alternative budget proposal, which could include reinstating the tobacco dollars, Sabetta said.
“I don’t believe anything has been taken off the table as far a potential ways to solve the budget deficit,” she said.
A roadblock that could further hinder plans to minimize youth smoking is Taft’s Third Frontier Project, a top priority for the governor. In an economy that is suffering, Taft has to prioritize, Holubec said.
“We are in an unprecedented budget crisis. It’s up to the legislature on how the state spends it,” Gribben said.
