Burning Money

IN the late 1990's, the tobacco companies made a historic legal settlement with every state and the District of Columbia, agreeing to pay $246 billion over 25 years for tobacco prevention and cessation programs. In the last five years, the states have received $40.7 billion in tobacco settlement revenue but have devoted only 5 percent of this money to fighting the tobacco epidemic.

Alabama has spent more than $1 million of this money on boot camps for juvenile delinquents, alternative schools and metal detectors and surveillance cameras for public schools.

Illinois has used $315 million for property tax relief and an earned-income tax rebate.

Michigan, which spends no money on tobacco prevention or cessation, has used 75 percent of its tobacco revenue to provide $2,500 college scholarships to high school students.

New York has used $700,000 to buy golf carts and an irrigation and sprinkler system for a public golf course in Niagara County.

In North Carolina, 75 percent of the tobacco settlement money went to provide assistance to the tobacco-producing community.

North Dakota spent about 45 percent of its settlement on water resources and flood control projects.

Virginia has spent $12 million to lay fiber-optic lines for broadband cable in southern sections of the state.

This lawsuit was never intended to balance ailing state budgets, let alone buy golf carts, cable lines and security cameras.

This is like all the lottery money that's supposed to go to education. What a joke.

Yea, they said in Ohio that if voters passed the lottery, their property taxes would never have to go up again. They lied. They also said years ago that after a certain point, the turnpike would be next to free. When that deadline came, many years after being built, they raised rates about 90%. It caused MANY deaths, as semi drivers started using regular state routes to avoid paying the increased fees.

The fact that the tobacco companies had no contingent agreement about how the money was spent, surely creates suspicion regarding the motive of the tobacco companies themselves. I'm glad you cleared it up.

Unfortunately, all companies have a habit of passing such losses onto the consumer and it is almost always the consumers who pay the penalty. This isn't common only to the Tobacco industry. It's just that few industries have had such major blows to pass along to their customers.

Too bad the tobacco industries were so duplicitous, or they could have recouped the money, lowered their prices, and in that way made up for past costs to the consumer.

Thank you for all your hard work and well-founded research.

I realize you are totally correct about all businesses passing these type costs onto the consumers.......it's just the nature of doing business.

There are a couple of reasons I continually bring it up in conversations regarding the Master Settlement Agreement (MSA). The entire point of the MSA was to put an end to individual states filing lawsuits against the companies...such as the ones that occurred in Mississippi and Texas (& 2 other states), so this was basically an out of court settlement, before the fact in most instances (Delaware is a perfect example, the AG's office refused to file suit because of the costs, and was one of the very last to sign onto the MSA).

But unlike other out of court settlements, this one was entirely public, and it is very specific in just how the companies are able to pass ALL of the costs on to the consumer, including specific $ amounts and the graduated increases in those amounts. HOWEVER........and this is the part that always sticks in my craw.......the media NEVER mentions that part of the deal. They only talk of how the companies are being punished, which in fact is absolutely untrue.

Another egrarious omission from any discussion of the MSA is that consumers had no say in the matter - zip, zilch, nada, NONE...........the only ones at the table were the AGs, the antis, and 5 tobacco companies. In other words only those who would profit from the deal.

Of the dozens of small tobacco companies that existed back then only a few voluntarily signed on to the scheme and raised their prices like the big boys did.........but many others didn't, thus keeping their prices down, and new companies have since popped up all over the country. These companies are now being forced in numerous states to pay into this boondoggle they did not create - all because Philip Morris does not like the competition of the little guys' lower prices.

I'm a "let the market decide" kind of person when it comes to competition - my dander gets up when one of the big boys gets the government to do the dirty work of squashing their competition.

Sorry for my ranting - but as you can guess, this is a subject that absolutely torques me off to no end. And so many people just don't understand what it actually means to everyone...........why do you think the gun lobby worked so hard to get congressional protection against this type of stuff? In Florida, the legislature actually passed legislation to allow this against the tobacco companies, and then after the fact realized it covered ALL industries and so went back and changed the law.

Again, apologies for my ranting. and many thanks for your compliments.

However, an attempt was made to put the spending of the settlement money on the ballot in the state of Michigan. Don't worry, the socialists soundly defeated that attempt to spend the money for what was claimed as the cost to the state.

Sorry that Michigan wasn't successful. Perhaps another state could take a shot here: one with an initiative process like California which can bypass a legislature and put measures directly on a ballot. There's little hope for spending discipline from either party now that the money is flowing.

The only way for the money to be available for this pork spending is for the cost to not have been valid in the beginning.

*Exactly* they're caught in a BIG LIE. But will the MSM hold them accountable? Nope. Will activists? No way.

Expect this very same "revenue enhancement" tactic to be used elsewhere. I still cannot believe people were stupid enough to fall for the war on tobacco when we'd had Fed-mandated warnings on packs, cartons and ads for one or two generations! It's a "feel good" thing. The libs can say "we care" and "we're protecting your children from evil corporations" while their *true* goal is to get more money to pay off special interests, enlarge government, make it more intrusive and grow their socialist power.

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