NCPA - National Center for Policy Analysis


August 29, 2005

Settlement money from the historic tobacco lawsuit in the late 1990s was never intended to balance ailing state budgets, let alone buy golf carts, cable lines and security cameras, says Howard Markel, a pediatrician and historian of medicine at the University of Michigan.

As part of the legal settlement, tobacco companies agreed to pay $246 billion over 25 years to every state and the District of Columbia for tobacco prevention and cessation programs. However, in the last five years, states have received $40.7 billion in tobacco settlement revenue but have devoted only five percent of this money to fighting the tobacco epidemic.

Markel reveals where some states are misspending their settlement money:

  • 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, while Michigan has used 75 percent to provide $2,500 college scholarships to high schools students.
  • Illinois has used $315 million for property tax relief and an earned-income tax rebate, whereas North Dakota has spent about 45 percent of its settlement on water resources and flood control projects.
  • In North Carolina, 75 percent of the tobacco settlement money went to provide assistance to the tobacco-producing community.
  • New York has used $700,000 to buy golf carts and an irrigation and sprinkler system for a public golf course in Niagara County, and Virginia has spent $12 million to lay fiber-optic lines for broadband cable in southern sections of the state.

Voters, millions of smokers who want to quit and millions more we want to keep from ever smoking ought to ask their legislators where the money went, says Markel.

Source: Howard Markel, "Burning Money," New York Times, August 22, 2005.

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