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Ohio Gov. Strickland’s Proposal to Sell Future Tobacco Settlement Payments Would Sacrifice Health of Ohio Kids

Statement of William V. Corr Executive Director, Campaign for Tobacco-Free Kids
March 15, 2007

Washington, DC — Governor Ted Strickland’s proposal to securitize (sell to investors) future state tobacco settlement payments would benefit large financial institutions at the expense of Ohio’s kids and taxpayers. Because the proposal fails to provide any funding to sustain Ohio’s highly successful tobacco prevention and cessation program, more Ohio kids will start to smoke, more lives will be lost and state taxpayers will foot the bill for higher tobacco-caused health care costs. It is penny-wise and pound-foolish not to use tobacco settlement revenue to fund tobacco prevention, and Ohio will pay a high price unless the state’s leaders reverse course. We urge the Ohio Legislature to take a stand for Ohio’s kids and keep the promise of the tobacco settlement by restoring funding for tobacco prevention.

The Governor’s proposal breaks the promise Ohio leaders made at the time of the 1998 state tobacco settlement to invest a significant portion of the state’s settlement money in programs to reduce tobacco use, especially among kids. The failure to restore and sustain funding for Ohio’s tobacco prevention programs, run by the Ohio Tobacco Prevention Foundation (OTPF), is inexplicable given the program’s success in dramatically reducing both youth and adult smoking. From 2000 to 2006, Ohio reduced smoking by 39 percent among high school students and by 52 percent among middle school students. Adult smoking in the state has declined as well, with 22.3 percent of Ohio adults reporting that they smoked in 2006, down from 27.6 percent in 2001.

This great progress is in jeopardy because the Legislature has diverted more than $568 million in tobacco settlement revenue that was intended for tobacco prevention program to other programs and has failed to repay any of it. As other states have demonstrated, progress in reducing smoking can quickly stop and even reverse when states cut funding for tobacco prevention. Unless the legislature restores funding for OTPF, the Foundation will run out of money entirely in just a few short years. Instead of cutting funding for tobacco prevention, Ohio should increase funding to the minimum annual amount of $61.7 million recommended by the U.S. Centers for Disease Control and Prevention (CDC).

Ohio has plenty of tobacco-generated revenue to fund tobacco prevention. In the coming budget year, Ohio will collect a record $1.3 billion from the tobacco settlement and tobacco taxes, yet it will allocate none of this new tobacco revenue to programs that prevent kids from smoking and help smokers quit (annual funding for tobacco prevention comes from funding previously allocated to the Foundation). It would take just a fraction of this revenue to sustain OTPC and ensure that future generations of Ohio kids are protected from tobacco terrible toll.

Despite Ohio’s progress, tobacco use remains the state’s leading preventable cause of death, claiming 18,600 lives each year. Some 18,700 Ohio kids still become regular smokers each year, one-third of whom will die prematurely as a result. Tobacco costs Ohio nearly $4.4 billion a year in health care bills, including $1.4 billion under Medicaid. The average Ohio household pays $642 a year in taxes because of smoking-caused government expenditures. Ohio’s leaders need to reverse course and take a stand for health and fund tobacco to protect kids, save lives and save money.