ABC 4 News has learned that a substitute bill is being drafted – one which would ban tobacco products from the state.
Tobacco payments to Utah may drop
March 13, 2006
By Angie Welling?
Deseret Morning News
????? Record-low cigarette sales in the United States could mean less money coming to the states through payments from big tobacco manufacturers, although how much and when the states would take the hit remains uncertain.
???? ?Utah is scheduled to receive an estimated $29.5 million payment next month as part of its share of the 1998 Master Settlement Agreement with the tobacco makers, an amount that appears safe from the adjustment now being sought from the companies.
????? “The things that I’m hearing right now, it looks like it’s OK,” said Richard Ellis, Gov. Jon Huntsman Jr.’s budget director. But, he said, if the adjustment is ultimately granted, the resulting reduction in future payments “could be relatively significant.”
????? The states’ lawsuit against tobacco makers originally sought to stop deceitful advertising practices and the marketing of tobacco products to children. And while many Americans may have kicked the tobacco habit, Ellis said, many states have not.
????? “We’ve become addicted to the tobacco money,” he said.
????? Tobacco producers have sought the adjustment based on their market share loss in 2003. To succeed, they must convince an independent auditor that the settlement was a “significant factor” in that loss to other producers who chose not to participate in the settlement.
????? According to the Utah Attorney General’s Office, the potential national adjustment for 2003 could be as much as $1.4 billion.
????? The auditor issued a preliminary decision earlier this month that the agreement was significant in the companies’ losses. States now have the opportunity to object before a final decision is rendered on March 27.
????? Payments to the states are due April 17, and the Attorney General’s Office is optimistic the state will receive its expected amount.
????? “We hope and trust they will pay in full,” assistant attorney general Mark Burns said.?
Different states opted to receive their share of the $206 billion settlement in different ways. Some have already settled their claims while others, like Utah, will receive payments over the next 25 years. To date, the state has received close to $200 million.
????? Utah’s share of the settlement is $836 million. According to statute, a portion of the state’s annual payments go into a trust fund, and the remainder funds things such as the Children’s Health Insurance Program, the Department of Health’s Tobacco Prevention and Control Program and cancer research at the University of Utah.
????? In the six years since the state initiated aggressive tobacco prevention programs using settlement funds, adult smoking rates in Utah have decreased by 25 percent, according to the health department. With the $4 million the department receives each year, it has launched programs such as the Tobacco QuitLine and the “Truth” advertising campaign.
????? “What we’re looking at, if the funds were lost, is a huge loss in these programs and also a loss in cost-effectiveness to the state,” said Lena Dibble, media coordinator for the Tobacco Prevention and Control Program. “This would mean a big change for us.”
????? If settlement funds are ultimately reduced, the Legislature would have to decide how to make up the losses. The question for lawmakers, said Sen. Lyle Hillyard, R-Logan, Senate co-chairman of the Executive Appropriations Committee, would be: “Do you cut across the board of all programs or do you prioritize and cut from the last forward?”
????? The answer, Hillyard said, would depend on the amount of the loss and efficacy of the programs. If the state’s smoking rate continues to decline, for instance, so might the need for targeted programs to curb tobacco use.
????? “If it’s going down, then the other health needs caused by tobacco smoking might be as well,” Hillyard said.
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MSA Is Costing States Money. The A.G.s are crowing and bragging about their success, while the state DOR’s are panicking! More and more smokers are making their own cigarettes and the black market is flourishing too.
ME: This could leave the state with a short-term cash flow problem for funding programs now supported by tobacco settlement dollars.
SC: Possible $15M shortfall could hurt state budget.
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New Bill Could Ban All Tobacco Products In Utah
2/16/2006
Chris Vanocur
Could all tobacco products soon be banned in Utah? At issue is the legislative bill currently being debated which would ban smoking in public places like bars and clubs.
But ABC 4 News has learned that a substitute bill is being drafted – one which would ban tobacco products from the state. It’s all part of the last minute wheeling and dealing before the final vote on the no-smoking bill.
The substitute bill banning all tobacco products is expected to be introduced during the final debate over the no-smoking bill.
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