CITIZENS
for
Limited Taxation
Post Office Box 408     Peabody, Massachusetts   01960     (508) 384-0100
E-Mail: 
cltg@cltg.org       Web-page:  http://cltg.org


CLT Update
Wednesday, March 24, 1999



The latest Beacon Hill feeding frenzy has commenced and the special interests all have their hands out or in our pockets. Yesterday the Legislature's Health Care Committee began hearings on how to spend the $7.6 billion "tobacco settlement" reimbursement.

So that there is no question about where CLT stands, we sent the memo, below.

Let the debate begin over the $7.6 billion windfall, but let it begin, as we said in our memo, not with how to best spend the money -- as the "Coalition of Coalitions" wants it done -- but how best to return this reimbursement to its rightful owners, the taxpayers.

Chip Ford --


State House News Service
March 19, 1999
www.statehousenews.com

ADVANCES (WEEK OF MARCH 22, 1999)

The activity on Beacon Hill this week is the surest sign of spring. Action is scheduled on a slew of major bills - truly launching the 1999/2000 session.

[ ... ]

TOBACCO SETTLEMENT ... One of the state's most pleasant dilemmas - deciding how to spend the state's share of the national tobacco settlement - is indicative of a new phenomenon on Beacon Hill. In recent years, with the state's coffers overflowing with surpluses, officials have found it challenging to agree on how to spend the taxpayers' money. Cellucci has argued for tax cuts. The House and Senate have consented somewhat, but have their own differences of opinion on spending priorities. The state's $7.6 billion settlement share - to be delivered over 25 years - adds even more cash to their consternation. Cellucci has called for spending the settlement - compensation to states for the Medicaid-related costs of treating smokers - to expand health care programs for children, the elderly and the poor. His lack of support for expanded anti-tobacco programs has been criticized. Four bills concerning the settlement money are before the Health Care Committee at noon Tuesday in Room A-1. One (H 1945) filed by Rep. John Stefanini (D-Framingham) dedicates 20 percent of the monies to tobacco control programs and the rest to health care for children and senior citizens. H 3648, filed by committee chair Rep. Harriette Chandler (D-Worcester), sets up a 15-member commission to decide the best way to spend the money. Rep. Mary Jeanette Murray (R-Cohasset) has filed a bill (H 38550) requiring some of the money to be spent by non-profits on "programs of abstinence from harmful substances and behaviors." Murray's list of supportable programs includes those that endorse sexual abstinence and call for making faithful monogamous marriages "the expected standard of human sexual activity." And Sen. Mark Montigny has also filed a bill to set up a commission.


State House News Service
March 23, 1999
www.statehousenews.com

[ ... ]

The Cancer Society is one of about 100 organizations that have joined to form the "Coalition of Coalitions," a group that wants to use the settlement to expand public health programs and hike spending on tobacco control. Coalition members are recruiting legislators to sign their "statement of principle" to that effect. The group was formed in December 1998 by Fresina, Health Care for All director Robert Restuccia and Jim Hyde of the Massachusetts Public Health Association. ...


CITIZENS
for
Limited Taxation
Post Office Box 408     Peabody, Massachusetts   01960     (508) 384-0100



To: Massachusetts Legislators
Date: March 23, 1999
Subject: The Tobacco Settlement - Give it Back!


July 13, 1989 -- The Boston Herald: "The spending cuts come as nervous House Democratic leaders try to hold a thin margin of support for a controversial temporary income tax hike they say is needed to pay off last year's deficit and old Medicaid bills." The next day it added: "The tax package will pay off borrowing to close out the 1989 deficit and pay back $488 million in old Medicaid bills. The tax rate on all earned income will revert to 5 percent after 1990 under the plan."

December 19, 1995 -- Opening complaint in Commonwealth v. Phillip Morris, Inc., et. al: "The Attorney General, Scott Harshbarger, brings this action on behalf of the Commonwealth of Massachusetts ... to recover the smoking-related costs to the Commonwealth, including, but not limited to, increased expenditures for ... Medical assistance provided under Massachusetts' Medicaid program [and] the Common Health Program.... In fulfilling its statutory duties, the Commonwealth has expended and will expend substantial sums of money due to the increased costs of providing health care services for smoking-related diseases."

He later argued in Middlesex Superior Court: "As the Supreme Judicial Court has held, reimbursement is simply 'repaying or making good the amount paid out.'"

Discussion of the Commonwealth's $7.6 billion share of the "tobacco settlement" should be not about how to best spend the windfall but how best to return this reimbursement to its rightful owners, the long-suffering taxpayers.

Historical facts are clear that the 1989 "temporary" income tax rate hike was essential to bail out years of state Medicaid debt. Though that debt has been retired, a decade later the "temporary" tax remains at 5.95 percent.

Taxpayer-funded litigation against the tobacco industry allegedly was to "recover the smoking-related costs" borne by taxpayers of the Commonwealth for state Medicaid and Common Health programs; "reimbursement" the attorney general insisted.

It is now time for "repaying or making good the amount paid out" by the taxpayers over the decades by returning to them the tobacco settlement reimbursement.

To that end, CLT has filed S-1635, sending the reimbursement to the Tax Reduction Fund. One way or another, the money should be returned to the taxpayers who compassionately provided it in good faith.


NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml


Return to CLT Updates page

Return to CLT "Tobacco Settlement" Project page