JEFFERSON CITY - Some state lawmakers say Missouri taxpayers, not government, could forseeably pocket the millions of dollars the tobacco industry has agreed to dole out following what could be the largest civil settlement in United States history.
"I think you could make a real good case that the tobacco money will ultimately be refunded to the people," said Sen. Steve Ehlmann.
Attorney General Jay Nixon has until noon on Friday to accept a tobacco industry proposal that would allow the state to collect 6.7 billion dollars - Missouri's cut of the 206 billion dollar proposal - over the course of 25 years.
If Nixon assents to the proposal, thereby raising the sluice for tobacco revenue to seep into Missouri, one of the first steps would be to determine if the state's Hancock amendment would preside over the distribution of the revenue.
Triggering the Hancock amendment, which blocks expansion of government by imposing a revenue limit for the state, would ensure at least a portion of the revenue would be refunded to taxpayers.
Legislative leaders anticipate state revenue will be at or near the Hancock lid for the next several years.
"It's pretty clear the only exception to the Hancock amendment is federal funds," Ehlmann said. "These would not be federal funds. It's going to trip the amendment and cause refunds."
Despite Ehlmann's contention, the state's Division of Budget and Planning may be able to sidestep the amendment. Mark Ward, the State Budget Director, says funds acquired from the tobacco industry would be earmarked as reimbursement for state programs and therefore not be considered an accruement of state revenue.
"The settlement is to reimburse the state for costs to the medicaid program," Ward said. "These funds are responsible for replacing or recovering those costs. There is a long standing exclusion [to the amendment] for these cost recovery funds."
Most likely, the allotment of the tobacco revenue will not be considered until after the Friday decision. Some legislators, like House Minority Leader Delbert Scott, are warily counting on the additional revenue - if not subject to refund - to fund existing state programs, like infrastructure and education.
"You're talking about major, major bucks," said Sen. James Mathewson, who once introduced a resolution - never approved - that would have categorized settlements related to the health issues of smoking as federal funds, and thus not be subject to appropriation. "Whenever you get into major bucks, everybody will want to get their hand in."
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