N.C., Ga. Decide How to Spend Tobacco Settlement Funds
Despite some North Carolina legislators' wish to "fill a looming hole in the state budget" with part of the state's $4.6 billion share of the national tobacco settlement, Gov.-elect Mike Easley (D) remains steadfastly opposed to such action, the Raleigh News & Observer reports. In what may become "one of the first big battles between Easley and the legislature" when the General Assembly convenes next month, the next governor says the settlement money is "off the table" for budget patching. The state is facing lower anticipated tax revenue, lost lawsuit payments and the implementation of several large programs such as increasing teachers' salaries. However, Easley last week proposed that part of the funding, expected to approach $150 million this year, go toward the state's share of a prescription drug plan for seniors.
Currently, the state's tobacco settlement money is split between three foundations overseen by political appointees, a plan Easley -- "one of the architects" of the national tobacco settlement -- developed when he was state attorney general. The largest of these foundations is the Golden L.E.A.F. Foundation, which receives 50% of the settlement proceeds and is meant to use the money to "spur economic development in tobacco-dependent areas of the state," while a health care foundation and a tobacco farmers foundation each equally split the remaining funds. "With a deficit situation like we are looking at the next couple of years, this would be the worst time I can think of to cut into the foundations, particularly Golden L.E.A.F. The state is less likely than ever to have any money to use for economic development with the budget constraints we are facing," Easley explained. However, Rep. Martin Nesbitt (D-Asheville) expressed concern over the plan, saying, "I have always questioned giving that kind of money to appointed groups to allocate in the first place." Other states are deciding what to do with their respective shares of the tobacco settlement as well: Illinois has distributed its first payment as tax refunds; Hawaii created a "rainy-day fund"; North Dakota is using a portion of its money to build a Red River flood-control system; and Tennessee is considering closing a $132 million deficit in the state budget (Williams, Raleigh News & Observer, 11/30).
Georgia is also deciding how to use its share of the national tobacco settlement, with Gov. Roy Barnes (D) announcing last Wednesday that the state will allocate up to $1 billion -- including a "chunk" of the state's settlement money -- for a "massive new effort to detect, treat and prevent cancer," the Atlanta Journal-Constitution reports. The move, praised by state medical schools and public health groups, is an attempt to make Georgia a nationally recognized cancer center and to "lure" 150 clinicians and scientists to work in Georgia, "leading the development of new treatment alternatives." The development of three "flagship facilities specializing in the newest research and treatment techniques" is part of the plan, although these locations have not been finalized. As cancer is the cause of nearly 25% of deaths in the state, initial efforts will target areas with the highest cancer mortality rates, with screening and prevention campaigns possibly beginning in a year, Barnes said (Pruitt, Atlanta Journal-Constitution, 11/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.