Frank Kelley Condemns Proposal 4

September 20, 2002
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LANSING — Opponents to a constitutional amendment that would redirect the millions of dollars Michigan receives annually from the tobacco settlement hope the backing of former state Attorney General Frank Kelley bolsters their efforts.

Kelly, who participated in the litigation that led to the landmark $206 billion national settlement with the tobacco industry, sides with those who oppose Proposal 4 on the Nov. 5 ballot, the so-called Healthy Michigan Amendment that’s backed by a coalition of health care interests led by the Michigan Health and Hospital Association.

The tobacco lawsuit was started “on behalf of the State of Michigan” to compensate taxpayers for the care provided to people with smoking-related illnesses, Kelley said. The $300 million-plus the state will receive in the coming years should stay under the control of elected lawmakers and not what he called “unaccountable special interests” that are now trying to “steal from the state treasury,” Kelley said.

He considers it ironic that the very groups now trying to redirect the tobacco money toward health care never offered any support for the litigation when he initiated it in 1996.

“No hospital or health group would join me, help me financially, or render assistance,” he said last Thursday during a news conference to announce his position as co-chair of the group fighting the ballot proposal, People Protecting Kids and the Constitution, a coalition of business and education interests.

“Ironically, the very same groups who would not help me or join forces with me in my tobacco case, and never claimed damages in the case, now want to steal from the state treasury my yearly damage payments that Big Tobacco is court-ordered to pay to the state for its losses,” said Kelley, who left office four years ago after serving as state attorney general for 36 years.

Proposal 4, if passed by voters, would constitutionally mandate that 90 percent of the $300 million to $364 million that Michigan receives annually as part of the 25-year tobacco settlement go toward health care, medical research and anti-smoking programs. The state’s general fund would then receive the remaining 10 percent of the tobacco settlement.

The Citizens for a Healthy Michigan coalition claims the money from the tobacco settlement was supposed to go for those purposes. But opponents of the measure contend that the aggrieved parties in the litigation were the taxpayers and that the settlement was to reimbursement states for what they already spent to care for people with tobacco-related illnesses.

Gov. John Engler, who vehemently opposes Proposal 4, and the Legislature earmarked the bulk of the money to fund college scholarships of up to $2,500 for 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.

Opponents to the measure — which now include Spectrum Health in Grand Rapids — contend the tobacco money is well spent because it helps thousands of students attend college each year, and is helping to create a new economic sector with the Life Sciences Corridor. They also complain that the formula the Citizens for a Healthy Michigan uses in its proposal to distribute part of the money, via a private, non-profit corporation, would lack public accountability.

State Sen. John Schwarz, who co-chairs the anti-Proposal 4 group, welcomed the former attorney general’s support.

“If the man who filed the lawsuit against the tobacco companies thinks that Proposal 4 is a bad idea, everyone should,” Schwarz said. “There is an absolute lack of oversight and accountability in this proposal. It is no more than a group of private organizations absconding with public dollars.”

Kelley’s involvement in the fight over Proposal 4 is the latest salvo fired off by the groups backing and opposing the measure.

The Citizens for a Healthy Michigan last week claimed additional support from three-dozen new members. The coalition touted a membership list of organizations — most of them health care-related — and individuals, while lashing out at what Chairman Art Kneuppel called a “‘Who’s Who’ of Lansing insiders” backing People Protecting Kids and the Constitution.

“Organizations that are beholden to the politicians who steered the tobacco money away from health care to begin with,” Kneuppel said in a news release issued early in the week, before the former attorney general’s announcement.

The latest backing for the People Protecting Kids and the Constitution comes from the Michigan Chamber of Commerce and Spectrum Health, which urged voters to vote against Proposal 4 and pushed legislators for improved funding for medical services such as Medicaid.

As with other opponents, Spectrum says in a position paper that parties who want the tobacco money spent on health care should take their case to the Legislature, and not alter the state Constitution.

“It’s poor public policy and sets a bad precedent,” Spectrum’s statement said.           

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