Up In Smoke

With money to burn from a landmark tobacco settlement, why is Montana spending so little on prevention?

| March 14, 2002

How would you spend an unexpected windfall of $30 million a year? More to the point, how would you spend this money so that it benefits 900,000 people, especially when it comes with a strong recommendation, though not necessarily a requirement, that it be spent combating the evils of smoking?

That’s the question that was posed to Montanans and their elected representatives in the 2001 Legislature. It’s a problem—if a large, no-strings-attached pile of money can be considered a problem—that has pitted the people of Montana against their governor, and many legislators against one another.

More than three years ago attorneys general across the United States, including Montana’s, negotiated a landmark settlement with the tobacco industry in an effort to recoup some of the enormous amounts of money that states have paid out for decades treating health problems brought on by smoking. The Master Settlement Agreement, as the settlement came to be called, resulted in a payment that would have bankrupted lesser industries: $246 billion. Montana’s share of that settlement amounted to $832 million to be paid to the state in annual installments of about $30 million a year for the next 25 years.

Predictably, some of the more shortsighted legislators, notably Hamilton’s Allan Walters, saw the settlement as a way to pay for other government services now without hitting up current taxpayers. As for 25 years from now when the payments stopped coming and those services still has to be funded? Among some the view was damn the future, let someone else worry about it. Those legislators who took the longer view, however, saw the settlement for what it was intended: a pot of money that could address the enormous public health care problems associated with tobacco use. If effective anti-smoking programs could be devised—and the Centers for Disease Control and Prevention (CDC) have already shown that they can—then the long-term health problems caused by tobacco use would be reduced, sparing the lives and pocketbooks of future Montanans.

For a time Montana’s communities and schools were aggressively tackling tobacco use, thanks in large part to former Republican Gov. Marc Racicot’s $3.5 million annual budget aimed squarely at the problem. That anti-tobacco program took a multi-pronged approach to reducing tobacco use, from smoking cessation hotlines to school-based programs in most Montana counties. But before its effectiveness could be fully gauged, Gov. Judy Martz, less than three months into the job, cut the funding for that program by 86 percent, inciting a firestorm of criticism from public health advocates, with whom the governor would barely speak to discuss the cuts. The governor’s attitude towards the anti-smoking lobby rankled plenty of lawmakers, including Rep. Christine Kaufmann (D–Helena), who says, “I think that’s a very bad tone for the governor to say ‘I’m not going to meet with people I don’t agree with.’”

In addition to the budget cuts, administration of the trust fund was transferred from the Department of Public Health and Human Services (DPHHS) Chronic Disease Division to an agency called the Intercoordination Council Prevention Resource Center, or PRC, which is linked administratively to the governor’s office. This change was made in the waning days of the 2001 legislative session, and because it was done with neither discussion nor input from the Legislature or the public, it created plenty of hard feelings.

Ironically, in the same November 2000 election that brought Martz into office, voters also approved by a three-to-one margin Constitutional Amendment 35, which established the Tobacco Trust Fund, directing 40 percent of Montana’s share of the settlement into a trust fund, with the remaining 60 percent dedicated to the general fund. Ninety percent of the interest generated by that fund is supposed to be spent on health care, with the remaining 10 percent going back into the trust. By law, only the Legislature can appropriate money from the trust, and it takes a two-thirds vote from both houses of the Legislature to spend the principal, or “bust the trust.”

After voters approved of the fund, but only days before it was officially established, Gov.-elect Martz gave Montana’s public health advocates a taste of what was to come when she attempted to redirect the first $3.6 million installment into the state general fund instead. Racicot, who was out of the state at the time, was informed of Martz’s move and successfully blocked it. The Tobacco Trust Fund, an overwhelming hit with the public and health care professionals, had survived its first assault.

More than a year later, however, questions are still accruing. How much money is in the fund right now? How much interest has been generated? Has the money been appropriated for health care and if so, how much of it has been spent? What about tobacco prevention programs, now funded by a paltry half-million dollars? How did such programs fare after Martz’s effort to balance the budget with tobacco prevention dollars?

What seem like very simple questions for DPHHS result in polite, almost eagerly given answers heavily laden with bureaucratese such as “impact evaluations” and “outcome measures,” and government acronyms like MTUPP and PRC. It is, as state health officials put it, very complicated.

To date, $14.1 million have been deposited into the Tobacco Trust Fund, generating $2.9 million in interest. During the 2001 legislative session, legislators appropriated slightly more than $3 million for healthcare for the 2002 and 2003 biennium, though not necessarily for health care problems directly related to tobacco use.

The lion’s share of the interest income—$1.7 million, or 56 percent—was earmarked for nursing homes. Hospitals received another 23 percent, or $704,000, and dental and mental health services received the remainder.

All of these expenditures from the tobacco trust, says DPHHS spokesman Ken Pekoc, paid for rate increases in the state Medicaid program. Medicaid, which contracts with various health care providers like nursing homes and hospitals, experienced cost overruns due primarily to the downturn in the economy and increases in drug prescription prices. The more people out of work, the greater the drain on Medicaid.

The $3 million may not have been spent on anti-smoking programs or helping individuals pay for their lung cancer treatment as many Montanans believed it would when they established the Tobacco Trust Fund. But nor did it go to filling potholes, extending sewer lines in fast-growing suburbs, or for any of those costly services people want but don’t necessarily want to pay for out of their own pockets.

Senator Mignon Waterman (D–Helena) says a tight budget and higher Medicaid costs justified the Legislature’s decision to spend the trust interest on cost overruns. At $120 million a year, she adds, the program could use the entire $30 million the state is slated to receive each year for its part of the settlement.

The legislative decision to spend its first pot of cash on Medicaid increases may put Montana slightly ahead of some states when it comes to spending tobacco settlement money appropriately, but still well behind most others.

Last January, the tobacco industry’s biggest critic, the Campaign for Tobacco-Free Kids, released a report that was harshly critical of how states have spent their cash windfall thus far. In fact, only five states are spending their tobacco windfall at the minimum levels recommended by the CDC. Needless to say, Montana is not one of them.

According to the Campaign for Tobacco-Free Kids, the CDC recommends that each state spend between 20 and 25 percent of its tobacco settlement on tobacco prevention. Most states are spending less than half that, and some, facing huge budget deficits, are spending all of their settlement money to balance the budget. Only Arizona, Maine, Massachusetts, Mississippi and Minnesota are funding their tobacco prevention programs at the CDC minimum. Nineteen states, including those five, have committed 50 percent of their CDC minimum funding to anti-smoking programs; 16 have earmarked one-quarter to one-half the recommended funding, and 12 states have committed less than 25 percent. Three states and the District of Columbia are spending none of their settlement dollars on tobacco prevention programs.

So how does Montana measure up on the spending roster? Surprisingly, Montana ranks well below Mississippi, often the low standard for comparisons when it comes to state-by-state statistics. While Mississippi ranks up there in the top five, Montana is way down the list in the 12 states that have committed less than 25 percent of its CDC-recommended spending guidelines.

As of December 2001 Montana had received a total of $61 million in tobacco settlement money, 40 percent of which had been deposited into the Tobacco Trust Fund, the remainder into the general fund to be spent on general government services.

The CDC recommends that Montana spend somewhere between $9.3 million and $19.6 million on prevention and education, a large enough difference that leaves plenty of room for public debate on how the money should be spent. Instead, Montana is spending a paltry $1.3 million to prevent kids from lighting up, leaving Montana in 43rd place in the prevention war.

That figure may be somewhat misleading, however, since Montana’s tobacco-prevention program doesn’t just include tobacco settlement money. Rather, it’s funded by $500,000 from the general fund—reduced by the Legislature at Martz’s suggestion from a Racicot Administration budget of $3.5 million—and another $875,000 from the CDC.

Though Montana’s prevention programs didn’t grind to a halt with an 86 percent reduction in funding, they did lose considerable momentum. Some Montanans were outraged at the drastic cut and let the governor know. Others aren’t even convinced that prevention programs work at all. Rep. Jim Shockley (R–Victor) voted against the Tobacco Trust Fund because, as he puts it, prevention programs are all talk and no action. “Kids already know smoking is bad for you,” he says.

But Alla Brooks, a registered nurse and co-chair of Tobacco-Free Ravalli County, says that her program was making real progress when the funding was pulled out from under them. “Locally, we felt we were on track with four different goals,” she says, referring to education, smoking cessation, programs aimed at kids, and programs for “special needs” populations like pregnant women and those who chew tobacco. “We had a lot of things initiated, and when the ax fell we were lucky we only got cut in half, when you consider the program was cut 86 percent.”

After the cut, Tobacco-Free Ravalli County, which Brooks thought was secure for the next six or seven years, regrouped and put together a new work plan and grant application for the state. “From our perspective, instead of being out there doing the work, we have to submit another grant application,” Brooks says. “I’m not saying it’s all come apart, but it’s like starting from scratch. We had to reprioritize what we were doing with half the funding. We lost the momentum.”

Likewise, Tobacco-Free Missoula program coordinator Ellen Brown has had to scale back that prevention program as well. She did so not by eliminating projects, but by folding the anti-smoking message into existing programs, like high school sports and the YMCA. “We’ve had to scale back our strategies, but we still hit the main areas,” she says. Tobacco-Free Missoula now makes more use of existing resources like St. Patrick Hospital and Partnership Health Center, and still offers some anti-smoking programs independently, like the Kick Butts Day to be held on April 3. But the program has had to cut back in other areas, such as its training for tobacco retailers and smoker cessation programs. “It’s what we’ve been able to do, and we certainly won’t give up,” she says.

These days the Montana Tobacco Use Prevention Program (MTUPP) spends its $1.375 million on 36 contracts around the state. Communities and Native American tribes tap into that fund to provide their own tobacco prevention programs.

Snuffing out the butts

So, are prevention programs effective? While a few skeptics like Rep. Shockley say no, the CDC says otherwise—and has hard numbers to prove it. The CDC lists four states—California, Massachusetts, Oregon and Florida—which have dramatically reduced smoking rates through aggressive anti-smoking campaigns. In Massachusetts, per capita cigarette consumption dropped 20 percent between 1992 and 1996, when voters there increased tobacco taxes to fund a statewide mass-media anti-smoking campaign. California’s per capita cigarette consumption dropped 16 percent during that same period. Oregon’s per capita consumption declined by more than 11 percent between 1996 and 1998 after a similar prevention and education program was approved by voters. In Florida, smoking among middle-school students—a critical target population for both the tobacco industry and its foes—declined 3.5 percent after that state implemented a counter-marketing media campaign in 1998.

Tobacco use among high schoolers declined from 27.4 percent to 25.2 percent. In fact, the CDC, in its “Best Practices” guidelines, ranks community programs as the single most important component in preventing tobacco use.

Says Waterman, “It’s kind of like people who think seat belts don’t save lives or that restricted drivers licenses for teenagers don’t save lives.”

Legislators’ opinions or lack of support from the Martz administration may not prove to be much of a hindrance to tobacco foes who want to see more money dedicated to anti-smoking programs. Last week, a group of Montana health care, senior and “good government” organizations banded together under an umbrella group called The Alliance for a Healthy Montana, and filed a voter initiative that would earmark larger amounts from the tobacco settlement for healthcare.

According to the Alliance, Montana sends $18 million in tobacco settlement money to the general fund every year. The proposed initiative (which is currently under review and doesn’t yet have a number assigned to it) would restore funding to tobacco prevention by tapping into the 60 percent that now goes into the general fund. Instead, 32 percent of Montana’s settlement money would go toward funding a comprehensive, statewide tobacco use prevention program. An additional 17 percent would go to the Children’s Health Insurance Program (CHIP) and the Montana Comprehensive Health Association, a program established by the Legislature to make health insurance available to Montanans who cannot get insurance because of uninsurable conditions.

The new initiative still leaves 11 percent of the $30 million a year for the general fund. No doubt the initiative will be opposed by lawmakers who prefer to use the settlement money to balance the budget, but Kristin Page Nei of the American Cancer Society thinks the initiative will have popular support. “Now is the time to do the right thing with tobacco settlement dollars,” she says in a prepared statement. “Montana’s kids are under a constant barrage of advertising and marketing from tobacco companies to the tune of $26 million per year. We think most Montanans want the settlement money to be spent for its intended purpose, so we’re taking the issue directly to the people of Montana to let them decide how the money should be used.”

The Alliance must collect 30,000 signatures by June 21 to qualify for the November ballot.

The task ahead of the Alliance may not be as daunting as it may appear. A May 2001 poll found that only 14 percent of Montanans approved of what Martz and the Legislature have done to the tobacco prevention budget. Seventy-nine percent expressed disapproval. If those numbers still hold true, collecting 30,000 signatures in the next three-and-a-half months should not be difficult.

Senator Waterman, who was deluged with mail about tobacco prevention during the last session, mostly in strong support, believes the initiative backers will not only get their signatures, but will prevail at the polls in November as well.

“I’ve got as much mail on [tobacco prevention] as anything else,” she says. “I think Montanans support the tobacco trust and would be very upset with the Legislature if they tried to break it. My guess is [the Alliance] will have a good shot at it.”

If the initiative fails at the polls, don’t look for any changes in the Martz administration’s stance toward tobacco prevention efforts. Says Rep. Kaufmann, “With the current administration it will not change. Martz’s policy is to use that money for general government [services] rather than tobacco prevention.” Repeated phone calls from the Independent seeking the governor’s position on increased tobacco funding went unanswered.

If the Tobacco Trust Fund is to truly serve as a health care savings account for the future, then present-day Montanans may have to take it upon themselves to make it happen. Otherwise, it may turn out to be nothing more than a short-term money source for every lawmaker’s pet project.

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