Voters to Decide Tobacco Dollars’ Fate
As states debate how to effectively spend the windfall of money from the 1998 national tobacco lawsuit settlement, the question has been put before voters in several states. The future of billions of dollars in settlement money is on the ballot in Arizona, Arkansas, Montana, Oklahoma, Oregon and Utah, with Arizona and Oregon voters deciding between more than one proposal (Hitt, Wall Street Journal, 10/25).
In Arizona, which has one of the highest rates of uninsurance in the nation with more than 25% of state residents lacking health coverage, voters will allot the state's share of $3.2 billion to either Proposition 200 -- Healthy Children Healthy Families -- or Proposition 204 -- Healthy Arizona 2. Prop. 200 would expand the state's Medicaid managed care program, known as the
Arizona Health Care Cost Containment System, to include 40,000 parents of currently enrolled children, and would give millions of dollars to prevention programs for children and adults. The initiative would cost about $252 million a year, with $36 million coming from the state, $108 million from tobacco tax revenues and $108 million from the settlement funds. Prop. 204, a copy of the Healthy Arizona initiative approved by voters four years ago, would bring 130,000 adults into the state system by raising the income limit from 34% to 100% of the federal poverty line. The plan would require a Medicaid waiver; if the waiver receives approval, the program would cost less than $100 million per year, with funds to come from the settlement. If the waiver is denied, however, the initiative would cost roughly $231 million a year. Arizona voters may approve both initiatives, in which case the one receiving the most votes will get the money, or voters may reject both, leaving the decision of fund appropriation to the state Legislature (Erikson, Arizona Daily Star, 10/8).
In Arkansas, the Coalition for a Healthy Arkansas Today raised $350,000 to get a measure for spending the state's $1.6 billion share of the settlement money on the ballot. The proposed Initiated Act 1 would set aside the first $100 million, then allocate the annual payments to research, health treatment and smoking prevention and cessation programs (Associated Press, 10/29).
Montana voters will decide on a legislative referendum that would amend the state constitution to require "the dedication of part of the tobacco litigation settlement money to a trust fund; and allo[w] appropriation of part of the trust fund for tobacco disease prevention programs and programs related to health care needs" (Ballot Watch).
Oklahoma, one of the first states to file suit against the tobacco industry in 1996, will ask voters to determine how much of the state's $2.3 billion share should be placed in trust. The trust mechanism proposed by state officials would place a graduated percentage of the tobacco money in trust each year, starting with 50% of next year's payment and increasing each year by 5% to cap off at 75% in 2007. Attorney General Drew Edmondson said that the ballot initiative is necessary because it will make the trust constitutional, rather than a statutory program subject to "legislative tinkering." Edmondson anticipates that placing the money in trust will ultimately allow the state to draw down interest payments that total more than the annual payments themselves (Price, Journal Record, 10/26).
Encouraged by a 14% reduction across the last four years in the number of adults who smoke, a 21% decrease in the number of smoking eleventh graders and a 41% reduction in the number of smoking eighth graders -- successes that many attribute to a 1996 ballot measure that added a 30-cent tax on each cigarette pack -- Oregon voters will again address the tobacco issue as they decide between two initiatives on spending the state's $75 million settlement share. Both measures would channel the money into trust funds, but Measure 4 would spend all trust fund earnings on the
Oregon Health Plan, the state program that provides coverage for those without insurance, while Measure 98 would distribute earnings among several programs dealing with issues such as domestic violence or disabled transportation services. The Tobacco-Free Coalition of Oregon opposes both measures; coalition spokesperson Wendy Bjornson explained that Measure 98 allocates only 10% of earnings to smoking prevention and Measure 4 does not provide any money at all (Flaccus, Associated Press, 10/30).
In Utah, voters will consider Proposition No. 2, which would place a chunk of the state's $983 million settlement in trust. If passed, the proposal would allocate half of the tobacco money for the next three years and 60% of payments starting July 2003 into the trust fund. Legislators would be allowed to spend half of the interest, with the other half remaining in trust to add to the principle. The fund would start out with an estimated $17.8 million, with an additional $18.4 million infusion over the next 18 months, earning $3.1 million in interest over that period (Wolfson, AP/Deseret News, 11/1). For past coverage of California tobacco settlement ballot initiatives, click here.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.