Ohio Ruling Is Important Step Toward Using Tobacco Settlement Funds As Intended - To Reduce Tobacco Use and Save Lives

Statement of Matthew L. Myers, President, Campaign for Tobacco-Free Kids

Feb. 10 2009

Washington, D.C. — An Ohio judge today delivered an important victory for public health by ruling that there is a substantial likelihood that Governor Ted Strickland and the Ohio Legislature acted illegally when they sought to take back $230 million in tobacco settlement funds that had previously been put in an endowment to fund programs to reduce tobacco use. Judge David Fais of the Franklin County, Ohio, Court of Common Pleas placed an injunction on the diversion of the funds until a trial is held starting on April 14.

The Court found that the decision to illegally seize the tobacco settlement funds and reduce or eliminate Ohio's highly successful tobacco prevention programs would cause profound harm to the health of the citizens of Ohio. It is encouraging that Judge Fais has recognized the importance of using Ohio's tobacco settlement funds as intended – to reduce the death and disease caused by tobacco use. As Judge Fais wrote in his ruling, "The intended beneficiaries of the Trust will suffer an increase in tobacco-related disease and mortality, and suffer significant additional tobacco-related health care costs, if the Endowment Fund is depleted and the scope and impact of the types of tobacco prevention and cessation programs that the Foundation formerly funded are reduced or discontinued."

While a final decision will be made after the trial, Judge Fais' ruling today indicates that the Ohio Tobacco Prevention Foundation stands a good chance of prevailing and maintaining control of the funds. In particular, Judge Fais found that the Ohio Legislature acted improperly in passing a law that required the transfer of funds from the Foundation's endowment. "The Court finds that the General Assembly did not act within the scope of its legislative authority in taking back the moneys it had previously given to the Endowment Fund," Judge Fais wrote.

We applaud the American Legacy Foundation for their leadership in pursuing this litigation to ensure these tobacco settlement funds are used as intended to prevent children from starting to smoke and help smokers quit.

At the time of the 1998 state tobacco settlement, Ohio leaders promised to use a portion of the approximately $300 million in settlement funds the state receives each year for programs to prevent kids from smoking and help smokers quit. In 2000, they created the Ohio Tobacco Prevention Foundation to receive this portion of the annual settlement funds and establish a permanent endowment to run tobacco prevention and cessation programs. However, Ohio leaders since regularly diverted funds intended for the Foundation. Then last year, Governor Strickland and the Legislature sough to raid the Foundation's remaining funds to help pay for an economic development plan.

The Ohio Tobacco Prevention Foundation has a strong record of success. The Foundation's programs have helped reduce smoking by 47 percent among middle school students and by 38 percent among high school students since 2000. Adult smoking in the state has declined as well, with 22.4 percent of Ohio adults reporting that they smoked in 2007, down from 26.3 percent in 2000.

It is critical that Ohio continue to invest in programs to prevent children from starting to smoke and help smokers quit. Tobacco use is the leading preventable cause of death in Ohio. Each year in Ohio, tobacco use claims 18,600 lives and costs the state $4.37 billion in health care bills, including $1.4 billion in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $638 a year on every Ohio household.

 

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