Limited Taxation
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CLT Update
Thursday, January 21, 1999

"This [$7.6 billion tobacco] settlement was never meant to be a goody-bag for a spending free-for-all," Cellucci said. ... He said [his] plan [for spending it] wouldn't free up money for tax cuts because it calls for new spending, not transfer between accounts.

State House News Service

At least Governor Paul Cellucci hasn't insulted our intelligence, as did another chief executive known for his situational veracity: He hasn't yet claimed that under his administration "the era of big government is over."

If he has his way, those billions of dollars that were pursued allegedly to make whole all of us poor taxpayers, will not be returned to us after all.

Our reimbursement for decades of paying the huge cost of health care for the victims of demon "Big Tobacco," as we were told ad nauseum, instead now will be spent to -- expand government?

Say it ain't so.

"In a case he filed three years ago," the Boston Globe reported last December, "[Attorney General] Harshbarger was seeking $2.3 billion plus penalties for the Medicaid costs incurred by Massachusetts for smoking-related illnesses."

What will our concerned state government do with all that restitution money it relentlessly stalked for us poor victimized taxpayers, money we've paid over decades for those staggering tobacco-related Medicaid costs?

Why spend the "goody-bag," of course!

It took only a dozen years to double the state budget from $10 billion to its current $20 billion. Gov. Cellucci's goal must be to again double it before his term is up.

If it is, he's sure got a good jump on it with all this "free" money of ours that's pouring in, the once-alleged taxpayers' restitution for "Big Tobacco" damages!

In Massachusetts, the era of big government is healthy and doing well. Very well.

Chip Ford --

Even before the "tobacco settlement," and its 45 per pack of cigarettes price increase to pay for it, is factored in:

According to the below report: "The state estimates it spends about $200 million annually on health care costs related to tobacco illnesses."

The Department of Revenue annually takes in over $300 million from state tobacco excise and sales taxes.

Therefore, smokers themselves and alone provide Massachusetts with an additional net profit of $100 million every year -- at least, that is, until more and more are forced to quit. Then everyone's taxes will need to be raised to make up the difference.

State House News Service
January 21, 1999

Cellucci Wants Tobacco Settlement
Dedicated to Health Programs

JAN. 21, 1999 ... TH ... All state funding from the multi-state tobacco settlement - estimated at $7.6 billion over the next 25 years - should be used to expand health care programs for children, the elderly and the poor, Gov. Paul Cellucci said today.

Cellucci's vow pleased many in the health care community. However, tobacco-control groups assailed his refusal to expand the state's anti-smoking campaign.

"Cigarette companies have made billions of dollars at the expense of the public's health," Cellucci said. "It's time that tobacco funds go toward saving lives."

With a smile, Cellucci pointed to a placard explaining how other state officials plan to spend the money. The Louisiana governor wants to use the funds to pay off state debts, while the mayor of Los Angeles wants to use some money to make sidewalks handicap accessible, Cellucci said.

In the next 17 months, the state expects $361 million to flow into the fund. Initially, Cellucci said, he hopes the tobacco money will fund:

  • A $132 million expansion of a program that provides health insurance to families;

  • A $20 million investment to help seniors pay for prescription drugs;

  • A $20 million expansion of home care and elderly housing programs;

  • A $10 million expansion of HIV/AIDS patient programs;

  • A $13.6 million expansion of a program that provides services to mentally retarded adults;

  • A $5 million initiative to help the state maximize federal reimbursements;

  • A $500,000 study to determine how the state Department of Public Health can best optimize tobacco funds for smoking prevention programs.

Health and Human Services Secretary William O'Leary urged legislators to fall in line behind the plan. Cellucci plans to file the proposal as legislation with his budget next week.

"We need the legislature to follow the lead of the governor," O'Leary said. "The key issue is that all the money's got to go to health programs."

Cellucci said the fund would reserve money each year to stave off unexpected revenue drops or to repay the federal government's expected claim to half the money. Some federal officials say the US government deserves half of money because federal funds helped poor sick smokers.

In December of 1995, Massachusetts became the fifth state to sue tobacco companies to recover health-related spending. The state estimates it spends about $200 million annually on health care costs related to tobacco illnesses.

After an initial payment of $361 million, the tobacco industry will pay Massachusetts between $250 million and $350 million per year under the settlement.

Cellucci said taking the tobacco money out of the general fund and putting it into a special "Cellucci-Swift Health Care and Community Services Trust Fund" would prevent legislators from spending the money on projects unrelated to health care. He said the plan wouldn't free up money for tax cuts because it calls for new spending, not transfer between accounts.

"This settlement was never meant to be a goody-bag for a spending free-for-all," Cellucci said. "This funds expansions of existing programs."

But some health care advocates criticized Cellucci's plan because it only allocates $500,000 for anti-smoking efforts - and that money will fund a study of existing programs. Cellucci said the state already spends $90 million a year to fight smoking, and said he thinks the programs could be more effective.

Jennifer Mansfield of the American Heart Association of New England said Massachusetts' anti-smoking efforts are a national model. "We're the state other states look to when they're trying to get money to fight smoking," Mansfield said.

Lori Fresina of the American Cancer Society added, "We're doing better than every other state."

Fresina said the smoking rate in Massachusetts has decreased 30 percent in recent years, four times better than the national average. Fresina also said the state spends only $30 million on tobacco control, not the $90 million Cellucci said.

Rep. Harriette Chandler, House chairwoman of the Health Care Committee for the 1997-1998 legislative session, likes Cellucci's plan. Chandler expects to be re-appointed as chairwoman by Speaker Thomas Finneran. She said she filed a similar bill for the coming session.

"I'm delighted that (the governor) feels the tobacco funds should go to health care. This shouldn't have anything to do with taxes. It's wonderful that he understands there's a difference between this money and cutting taxes," said Chandler (D-Worcester).

Chandler said tobacco-control advocates were "rightfully" angry over the lack of new anti-smoking funding. "For years, they've been very concerned about doing programs encouraging people not to smoke," she said. "To only allot only $500,000 for a study, it's kind of a slap. It's probably not meant to be a slap, but that's the way it's received."

New Senate Health Care Committee chairman Richard Moore (D-Uxbridge) agreed with Chandler's assessment. He said he thought the state should spend more money on smoking-prevention programs than Cellucci was proposing.

"(Cellucci's) headed in the right direction," Moore said. "I think it's a mistake by other states to use the money for capital projects. It seems appropriate that we utilize that money for various health-related matters.

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