Friday, December 24, 2010

DBJ... Court says it's okay to divert tobacco money

Editor’s Note: This isn’t really news. Twelve years ago I said the “tobacco settlement” was nothing more than blackmail by the states to find a new source of revenue. If you’ll recall, it was initially “demanded” to “treat those with tobacco-related health problems.” Since then, it’s been used for just about everything but…

From the Dayton Business Journal…
Ohio Supreme Court: State OK to divert tobacco money
Wednesday, December 22, 2010

Using $230 million from a tobacco use prevention fund to help prop up Ohio’s ailing economy in 2008 did not violate the state Constitution, the Ohio Supreme Court has ruled.
The high court’s 7-0 decision Wednesday affirmed a 2009 ruling by the 10th District Court of Appeals that Gov. Ted Strickland and the General Assembly were within their rights to divert money the state received from a 1998 tobacco company settlement to help fund a $1.5 billion stimulus initiative as the recession began to hammer the state.
Tobacco fund trustees sued the state in Franklin County Court of Common Pleas, challenging the constitutionality of the government’s action and were joined by anti-tobacco group American Legacy Foundation, which claimed diversion of the money broke a purported contract it had to run smoking-cessation programs in Ohio.
The General Assembly later abolished the Ohio Tobacco Prevention Foundation, liquidated the $264 million endowment and diverted most of its proceeds to the stimulus effort.
“No constitutional amendment was adopted in Ohio restricting the use of the tobacco settlement money,” Justice Paul Pfeifer wrote. “In the absence of a constitutional provision, the General Assembly had the power to change the use of the settlement money” by enacting legislation.
The justices said also that the ruling disappointed antismoking advocates.
“Today’s decision is devastating for Ohio,” said American Legacy Foundation CEO Cheryl Healton. “Just last week, we learned that the once-historic decline in youth smoking has stagnated and youth smoking rates have begun to increase.”

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