Tobacco Money Battle Lines Drawn

July 12, 2002
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A campaign to redirect Michigan’s portion of the national tobacco settlement toward health care is shaping up as a brutal fight over the billions of dollars that will flow into the state in the years ahead.

A coalition led by hospitals across Michigan moved closer last week to having the question placed on the November general election ballot so voters can decide whether to re-steer most of the state’s $8.5 billion tobacco settlement toward health care and anti-smoking efforts.

The Citizens for a Healthy Michigan submitted more than 476,000 petition signatures to the state to have a constitutional amendment placed on the statewide ballot Nov. 5. The coalition needs to have 302,711 signatures verified in order to get its proposal on the ballot.

The proposal, if passed by voters, would constitutionally mandate that 90 percent of the $300 million to $364 million — the amount Michigan receives annually as part of the 25-year, $206 billion tobacco settlement — go toward health care. The state’s general fund would then receive the remaining 10 percent of the tobacco settlement.

The campaign has already seen plenty of rhetoric flying from both sides.

Gov. John Engler elevated the fight last week when he vetoed legislation designed to generate $143 million in new Medicaid funding for Michigan hospitals. He vetoed the proposal saying, “The state can afford one, but not both.”

“It is a great disappointment to me, members of the Legislature, and the patients around Michigan in need of quality care, that this small, short-sighted group of special interests has chosen to wage political war instead of doing what’s best for Michigan’s public health and safety,” Engler said.

The Citizens for a Healthy Michigan coalition claims the money from the tobacco settlement was supposed to go for health care and anti-smoking programs. But opponents of the measure contend that the aggrieved parties in the litigation were the taxpayers, not hospitals, and that the money was supposed to reimburse states for what they already spent to care for people with tobacco-related illnesses.

In that vein, the state Legislature earmarked the bulk of the money for college scholarships of up to $2,500 to be awarded to high school students who score at a certain level on the state’s MEAP tests. More than $91.1 million in MEAP Merit Scholarships were awarded to 41,699 students during the 2001-02 school year.

The rest of the money goes into a trust fund to help low-income senior citizens pay for prescription medications and to provide up to $50 million annually to fund the state’s Life Sciences Corridor initiative, which would see its funding reduced under the ballot proposal to between $39 million and $47 million.

Citizens for a Healthy Michigan want to amend the state constitution to earmark 90 percent of the tobacco money for health care through funding smoking prevention and education programs and research into tobacco-related illnesses, as well to help pay to care for people with smoking-related illnesses.

Backers of the proposal argue the state is using the money for the wrong purposes, as one of three states that didn’t direct its tobacco settlement toward anti-smoking initiatives, and cite data that shows Michigan lagging behind other states’ anti-smoking spending but a leader in smoking-related deaths.

Art Kneuppel, chairman of Citizens for a Healthy Michigan, called the present use of the money a “colossal mistake” made by lawmakers.

“Michigan voters will tell all of the politicians who did the wrong thing, that saving lives and saving entire generations of Michigan kids from tobacco is more important than anything else we can do with the master settlement,” Kneuppel said.

Opponents to the measure, Engler and university and college presidents among them, contend the money is well spent because it helps thousands of students attend college each year, and is helping to create a new and vital economic sector with the Life Sciences Corridor. Their biggest gripe is that the formula the Citizens for a Healthy Michigan uses in its proposal to distribute the money lacks public accountability.

“These guys want to take this money and use it for any purposes they want to use it for. No checks, no balances,” said David Waymire, a spokesman for People Protecting Kids and the Constitution, a coalition of education, business and labor groups formed to oppose the proposal.

“We should just hire them as the IRS and let them vacuum our pockets,” Waymire said.

The proposal does require an annual review of expenditures by the state Auditor General to ensure the money is spent for the proposal’s intended purposes.

Engler doesn’t like the proposal because it locks specific spending into the constitution for years to come with no legislative oversight, as well as ties the hands of future governors and lawmakers to respond to spending priorities.

“He thinks it’s a horrible idea. It’s bad public policy, plain and simple,” Engler spokesman Matt Resch said. “It locks into the constitution five, 10, 15, 20 years from now things that we don’t even know we’re going to need to spend money on.”

If health care advocates and hospitals believe they deserve more of the tobacco settlement, they should make their case in the Legislature, opponents of the proposal argue.

But the campaign manager for Citizens for a Healthy Michigan made it clear during a May forum in Grand Rapids that she and other supporters have little faith in lawmakers.

“History has told us that we cannot trust the Legislature to do the right thing,” Lori Latham said during a May 3 forum hosted by the Alliance for Health.

Organizations backing the proposal include the Michigan Health and Hospital Association, the Michigan State Medical Society and an assortment of other health-care related groups and advocates.

Citing smoking’s status as the No. 1 preventable cause of death in Michigan and the need to put more money into a financially ailing health-care system that has been hit hard by reduced payments from Medicare and Medicaid, the 14,500-member Medical Society endorsed a ballot initiative last month.

“Bottom line, it would mean more money for health care,” said David Fox, the Medical Society’s communications director.

For more information, see these Web sites: Citizens for a Healthy Michigan at www.tobaccomoney.com and People Protecting Kids and the Constitution at www.protectmiconstitution.com      

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