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States Misusing Tobacco Funds?

Billions of dollars from the nation's landmark tobacco settlement are being put to use across the country, but only about 5 percent is going to smoking prevention - about a quarter of what the Centers for Disease Control and Prevention recommends, a report released Saturday shows.

More than half of the money is being used in ways unrelated to smoking, the study found.

The report is in step with a CBS News probe in March that found that while more than half the states have put part of their settlement money into trust funds, many others are spending the windfall on programs that have nothing to do with tobacco.

The 1998 settlement signed by the giants of the tobacco industry was meant to compensate the states for years of smoking-related health expenses. Forty-six states signed it, and four other states settled separately for an additional $40 billion.

The state attorneys general who negotiated the settlement expected it to be used to fight the spread of smoking and prevent tobacco addiction, but the documents left it to the states to decide how their shares of the money would be spent.

In a new report, the National Conference of State Legislatures analyzed the states' plans for their shares of the tobacco money during the fiscal years 2000 through 2002.

Of the $21 billion being doled out during that period, it found:

-36.1 percent had been set aside for health care.

-26.0 percent went to bolster endowments or state budget reserves.

-9.5 percent was to be spent on schools or youth programs.

-5.0 percent was to go into tobacco prevention.

-4.5 percent was to be put into research.

-3.2 percent was to be used to assist tobacco growers and communities affected by the reduced quotas from tobacco companies, in most cases by offering education and training in other fields.

Several states are tapping their tobacco settlement payments to make up shortfalls in their state budgets and bolster programs that have nothing to do with tobacco.

Tennessee will use its $557 million to meet budget shortfalls in 2002.

North Dakota is using 45 percent of its tobacco funds to pay for debt service on bonds financing a water allocation and flood project.

Click here to follow the history of tobacco's legal battles.

"It's moral treason to me," Mississippi Attorney General Michael Moore said in Saturday's The New York Times. "We got all this money, then legislatures and governors who were not even in this fight act like the money fell out of heaven and spend it on the political whim of the day."

Moore was complaining along the same lines in March when he told CBS News, "This was a fight about improving the public health of this country and primarily about protecting children and reducing underage tobaco use."

But Connecticut lawmaker George Jepsen tells CB News it's up to the states to decide what to do with the money. "We shouldn't pretend that the expenditure exists ... in a vacum," he says. Connecticut is one of the states pouring the cash into the general budget.

The CDC has said that at least 20 percent of the overall $206 billion settlement will have to go into prevention programs for the states to effectively cut future tobacco-related health expenses.

Lee Dixon, director of the NCSL health policy tracking service, noted that about 45 percent of the money is being used for some type of health care, including long-term care, health care for the poor, biomedical research or tobacco prevention.

Washington state chose to set aside all but $32 million of its $408 million for a state-funded program for workers who don't qualify for Medicaid and can't afford health insurance.

Michigan over the past two years has put $90 million into a trust fund for biomedical research and research on illnesses affecting the elderly, and Colorado passed legislation directing 10 percent of its tobacco funds to a pharmaceutical assistance program for the elderly and the disabled.

Peter Fisher, assistant director of advocacy for Campaign for Tobacco Free Kids, said states should be spending more money stopping tobacco-related illnesses before they happen. Rather than 5 percent, 20 to 25 percent of the settlement should be used to keep people off tobacco, he said.

"Our view is that there is enough money for each state to do a comprehensive tobacco program and address other needs they feel need addressing," Fisher said.

According to the CDC, smoking causes more than 400,000 deaths each year and results in more than $50 billion in direct medical costs annually. The center estimates that nearly 3,000 children under 18 become regular smokers every day.

© MMI, CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report

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