CATEGORY: Miscellaneous

AUTHOR: BOBBY

HED:More tobacco money coming

By Bobby Harrison

Daily Journal Jackson Bureau

JACKSON - Mississippi will receive an additional $550 million over the next 4 1/2 years under a renegotiated settlement of the state's lawsuit against tobacco companies.

The new money boosts Mississippi's settlement with the tobacco companies to $4 billion over the next 25 years. And the additional $550 million will mean the state should receive $1.1 billion by January 2003 from the tobacco companies.

The $1.1 billion would be about one-third of Mississippi's yearly general fund budget.

"That's pretty awesome," House Speaker Tim Ford said when told of the additional money the state will receive.

'Lead dog'

Attorney General Mike Moore, who originally filed suit against the tobacco companies in 1994 to recoup government money spent treating smoking-related illnesses, said the additional money is the result of Mississippi being "the lead dog."

"I think everyone in Mississippi knows what that (lead dog) means," Moore said Tuesday during a news conference at his office. "The first one to the trough gets to drink the most."

Moore was the first attorney general to file suit against the tobacco companies and the first to settle with them. Since then, 39 other states have filed similar suits.

Under terms of last year's settlement, the state was to get $3.4 billion over a 25-year period.

But the original settlement also included a clause ensuring that Mississippi would get any additional benefits awarded to other states. Based on that clause, Moore renegotiated after Florida, Texas and Minnesota settled with the tobacco companies.

Under the renegotiation, Mississippi still would get the same amount of money even if a national settlement passes.

National settlement

Moore led negotiations to reach a national settlement with the tobacco companies last summer. But thus far, Congress and the Clinton administration have not reached a consensus. Moore sees only a "slight hope" that the national settlement will pass.

Moore said Mississippi already has its settlement and it's time for the Legislature to decide what to do with the money.

During the 1998 session, the Legislature opted not to spend any of the first payment of the settlement from the tobacco companies. Instead, the Legislature placed the $170 million in an interest-bearing account.

Moore said Tuesday he still supports placing the settlement in a trust fund. where the interest could be used to address health needs.

"Can you image how much we could benefit the children of the state with a $1 billion trust fund?" Moore asked.

Ford, D-Baldwyn, and state Health Officer Ed Thompson said they also support the trust fund idea. Last year, the House passed a bill that would have placed the money in a trust fund with the interest to be used on health-related issues.

The bill was killed in the Senate.

By the time the Legislature convenes in January, the state is scheduled to have the first $170 million payment from the tobacco companies, plus another $68 million from the original settlement and another $41.7 million from the renegotiated settlement announced Tuesday.

"It is certainly getting to the point where it (tobacco money) needs to be addressed," Ford said. "I would think it needs to be acted upon this year (1999 session) with my preference being setting up the trust fund."

Health care needs

Ford said he favors using the money to address health care needs, which was the original intent of the lawsuit. He added that with 1999 being an election year there might be demands by some to spend the money in other areas.

Thompson, who attended the news conference with Moore, said the state now has the resources to make a substantial difference in improving the health of Mississippi's population.

If tobacco sales drop, Thompson said that could decrease the amount Mississippi and other states receive from the tobacco companies. Thompson and Moore are using a $65 million grant the state received from the tobacco companies to enact pilot programs to reduce teen smoking.

"I am going to do everything I can to reduce the amount of payments in the out years," Thompson said. "I intend for tobacco sales to go down. If they go down, the amount of the payment goes down. That is why it might make sense to place the payments in a trust fund."

As part of the renegotiated agreement, the state will be awarded all the tobacco companies' secret documents on CD-ROM. Thompson said those documents will show how the companies have been marketing to teens in an effort to attract young smokers to replace tobacco users who die.

"It makes me mad," he said.

Mississippi tobacco settlement

Fiscal year* Original settlement Additional money Total

1998 $170 million $0 $170 million

1999 $68 million $41.7 million $109.7 million

2000 $76.5 million $145.2 million $221.7 million

2001 $85 million $145.2 million $230.2 million

2002 $110.5 million $145.2 million $255.7 million

2003 $110.5 million $72.7 million $183.2 million

2004 $136 million $0 $136 million

*Mississippi's budget year begins July 1 so this is currently the 1999 fiscal year. The state is scheduled to get each yearly installment from the original settlement in December and get additional funds in early January through calendar year 2003. Starting in budget year 2004, the state will receive $136 million yearly forever after adjustments for inflation and tobacco sales.

- Source: Attorney General's office.

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