Holden using tobacco money in tough times

JEFFERSON CITY, Mo. -- Thanks to Missouri's settlement with big tobacco companies, Gov. Bob Holden has been able to plug holes in the state's leaking budget.

Missouri has received a total of $389 million under the settlement since last May, with an estimated $110 million payment due April 15.

To date, Holden has used $209.5 million to cover a costly state tax credit for prescription drugs and $88.5 million to make up for a general shortfall in the budget.

That means about 60 percent -- $298 million of the expected $499 million -- of the first year's payments will have been used to supplant the expenditure of state tax revenues.

Lawmakers spent two years debating how to use the $4.5 billion the state expects to get from tobacco companies over the next 25 years. They were unable to agree on a permanent spending plan but passed a one-year spending bill last year dedicating specific amounts to certain uses.

Many lawmakers believe most -- if not all -- of the tobacco money should be spent on health-related issues stemming from smoking. In the budget year that begins July 1, Holden has requested $20 million for tobacco-related health efforts, about what was appropriated a year ago.

Ease the pain

Holden said, given the financial shape of the state, the tobacco money provides a way to ease the pain of budget cuts.

"If we aren't able to keep this budget balanced, we're going to be shutting down hospitals," Holden said last week. He noted that tobacco funds that are merged into the budget ultimately would trickle down to health-care interests.

"To say that putting it in the budget doesn't relate to health care is inaccurate," Holden said.

House Minority Leader Catherine Hanaway was one of those lawmakers who led the drive for a permanent spending plan for tobacco money during earlier sessions.

She said last week that tobacco money should go toward its intended uses, not to bailing out the budget.

"Just like gambling revenues are expected to go to education, Missourians expected our tobacco settlement funds to advance health care, life sciences, and smoking prevention," said Hanaway, R-Warson Woods.