sTobacco payouts going up in smoke

By ALISSA J. RUBIN

Los Angeles Times

WASHINGTON --- When the states reached their historic $206 billion settlement last year with cigarette manufacturers, attorneys general from around the nation proclaimed that the whole purpose of their massive lawsuit wasn't to win money but to prevent teen-age smoking.

The settlement document says three times in its first two pages that its purpose is to stop children from becoming addicted to cigarettes.

But a year later, here are some of the state efforts being funded by the legal settlement with the cigarette manufacturers: new sidewalks, tax cuts, boot camps and school construction. In some states, little, if anything, is being spent on anti-smoking programs.

So far, just 8 percent of the money is earmarked for anti-smoking programs, according to the National Conference of State Legislatures.

In Texas, attorneys for the state will get 10 times the amount this year that is going into anti-smoking programs. In Michigan, not a penny of the settlement money will fund tobacco control.

Of the 23 states that have decided how to spend their money, the majority appear to view the dollars primarily as a hefty new revenue source to be spent on whatever the state needs.

Anti-smoking advocates say the states are playing, perhaps unwittingly, into the hands of cigarette manufacturers, who the advocates say have no interest in seeing the money go into prevention or cessation programs.

"The tobacco companies knew when you put billions of dollars into the hands of state government officials, there would be an enormous grab for the money from all different sources --- and that a substantial portion of the money would be diverted away from anything to reduce tobacco use," said Matthew Myers, president of the National Center for Tobacco Free Kids.

But the tobacco companies maintain they want the money to be spent on youth smoking prevention. In part for public relations reasons, they have decided it is in their interest to advocate that children wait to start smoking until they are of legal age.

"The settlement was signed in a spirit of addressing the youth smoking problem, and we believe the states can do far more than they have," said Thomas Ryan, a spokesman for Philip Morris USA.

Philip Morris officials have testified before four state legislatures this year in favor of more spending on teen smoking prevention. Their efforts have met with a lukewarm reception.

Most of the 46 states that signed the $206 billion settlement with the tobacco manufacturers in 1998 began getting their money earlier this month. They are scheduled to receive $8.7 billion over the next year. The rest of the money will be paid out over the next 25 years.

Another four states --- Mississippi, Texas, Florida and Minnesota - -- reached separate settlements totaling $40 billion over 25 years.

The tobacco companies are financing the settlement payments primarily with increased cigarette prices, which are paid by smokers. Since the settlement was announced last fall, the per-pack price has risen between 55 cents and 65 cents, according to cigarette company officials. Tax increases in some states have pushed prices even higher.

The settlement provides for a reduction in payments if smoking levels drop. Industry critics have noted the big infusion of money to the states --- and the use of that money for an array of new programs --- gives state officials an interest in a healthy and prosperous tobacco industry.

"The tobacco industry was laughing all the way to the bank when they signed this agreement," Myers said.

A large share of the total settlement, about 54 percent of the money allocated, is going to a broad range of health-related programs, including augmented health benefits for state workers and funds for biomedical research.

The Centers for Disease Control and Prevention issued guidelines suggesting that 20 percent to 25 percent of the settlement dollars in most states should be spent on comprehensive anti-smoking programs. Only a handful of the states are meeting those guidelines.

To be sure, the proportion of the settlement scheduled to be spent on smoking prevention and cessation is likely to grow as more states decide how to spend the money, said Lee Dixon, director of the Healthcare Tracking Service for the National Conference of State Legislatures.

"Some people would say, 'How much money can be spent efficiently in a given year on this problem?' " Dixon said.

"Many states have gone through a very public process of soliciting information and testimony and, to some extent, the states' decisions ought to reflect the peoples' will, based on the testimony," Dixon said.

However, the direction the states are heading makes it look unlikely a majority will come anywhere close to meeting the CDC guidelines.

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