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Gov. Bob Holden Announces New Use for $25 Million in Tobacco-Settlement Funds

August 30, 2001
By: Amanda Joyce
State Capital Bureau

JEFFERSON CITY - Gov. Bob Holden's plan to use tobacco-settlement funds to balance the state budget is coming under attack from a senior GOP lawmakers.

"It seems most unusual to me, and I wonder about the legality. Maybe they have a good rationale," said Sen. Larry Rohrbach, R-California and a member of the Senate Appropriations Committee.

Rohrbach questioned the decision to move the tobacco money out of a special account without legislative approval.

"I don't know how the governor is going to spend that money without appropriations."

The $25 million had been appropriated to build a new state health lab in mid-Missouri.

Rohrbach said he felt it was wrong to pull the funds from the state health lab when other, more minor budgets like walking trails were left untouched.

"We have a very inadequate state health lab," he said, "and that supports a core function of state government such as dealing with epidemics and communicable diseases."

Rep. Tim Harlan, D-Columbia, disagreed with Rohrbach's opinion.

"I recognize the very difficult situation that the state is in," Harlan said. "The alternatives are even more serious budget cuts that affect services to our constituents."

During the last legislative session, a bill proposing that money from the tobacco settlement be placed in a trust fund never passed. As a result, Holden created a trust fund for the money by executive order.

Payments from the settlement are made to the state under the nationwide agreement the tobacco industry reached with the states to get the states to drop their lawsuits against the industry.

To date, Missouri has received a total of $338.2 million from the tobacco companies.

At his Thursday news conference, the governor said he was shifting the tobacco money by "administrative action." The governor's budget office, however, said they might seek legislative authorization.

Legislative approval might not be easy to gain. Last session, the Democratic-controlled House originally voted down the governor's request to use settlement funds to help balance last fiscal year's budget.

Eventually the legislature did agree to move $126.9 million of the settlement into the state's general-revenue pool.

But many lawmakers then, and now, stress they want to see the money dedicated to health and smoking-prevention programs.

"We want to see it go for the purposes that it was gathered in," said Senate President Pro Tem Peter Kinder, R-Cape Girardeau.

"That [original purpose] was smoking cessation programs, health care, and life science research."