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Tobacco settlement delayed by appeals

September 09, 1999
By: Amanda Campbell
State Capital Bureau

JEFFERSON CITY - It's been nearly ten months since Missouri's Attorney General announced the state would join the national tobacco settlement. Yet Missouri has yet to receive one red cent of the estimated $6.7 billion the state could receive.

Lawsuits in Missouri and in other states are holding up Missouri's portion of the settlement. The payment is the state's share of the $206 billion national tobacco settlement.

Originally, a lawsuit demanding a piece of Missouri's settlement pie for hospitals and local government had held things up.

Although a decision in that case was issued by a St. Louis circuit judge in March, that decision now is on appeal. All litigation, in both Missouri and other states, must be resolved before Missouri can begin to receive payments, said Scott Holste, Attorney General Jay Nixon's spokesman.

"Eighty percent of the 46 states and 6 jurisdictions must settle litigation before any of the states can begin to receive payments," Holste said.

The lawsuit in Missouri's case involves 58 Missouri hospitals and some local communities. They seek tobacco funds to relieve their costs for treating patients with illnesses related to tobacco.

Less than 10 states, including Missouri, have yet to finalize litigation, Holste said.

Despite this delay in payment, legislators are already making plans for the settlement money.

A joint committee on tobacco has been formed to determine what will be done with the tobacco settlement proceeds.

"The goal of the committee is to hold hearings and give a final report by December 15 recommending what the state will do with the settlement," said Rep. Tim Van Zandt, D-Kansas City, who will chair the committee.

Klarich said the committee has many issues to address.

One possibility is to allow the settlement to be treated as additional state revenue, said Sen. David Klarich, R-St. Louis County.

That is a position pushed by many Republican lawmakers. By treating the money as regular state revenue, it fall under the "Hancock Amendment" that limits how much money the state can collect and keep.

Since the state already has exceeded the Hancock Lid, Klarich's approach would assure that all the tobacco money would go to individual taxpayers through larger Hancock tax refunds.

One committee member said the money should be used to temper the damage tobacco has laid on the state.

"Since the money is coming from the tobacco industry we should use it for health related problems caused by tobacco and anti-smoking education," said committee member Rep. Phil Smith, D-Louisiana. "The Senate doesn't feel that way."