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Monday, September 22, 2014
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Published: Sunday, 4/13/2003

Cigarettes' other addicts

Ohio, along with a number of other states from coast to coast, apparently has counted its cigarettes before they've been smoked.

The Buckeye State is among 46 states that have become hopelessly hooked on windfall revenue from the 1998 national tobacco settlement.

Now, with news that Philip Morris may not be able to meet its $2.6 billion April payment, state officials from Vermont to California are sweating like addicts desperate for a fix.

While some states have allocated the money only for non-essential tobacco-related programs, such as smoking prevention, others are using it, unwisely, we believe, to balance their budgets. Ohio, for example, must have $82.5 million of the $130.5 million due this month from Philip Morris to plug a state spending plan so porous that lawmakers are being forced to raise taxes.

That explains why Jim Petro is among a list of state attorneys general who have petitioned a county judge in Illinois to reduce a $12 billion appeal bond in a $10.1 billion judgment against the tobacco firm.

Philip Morris indicates it can't afford to pay either the judgment or the bond it must put up to appeal the verdict, and might be forced into bankruptcy proceedings that would endanger the states' gravy train.

We agree that the appeal bond is excessive. Even a wealthy outfit like Philip Morris shouldn't be forced to put up such a huge amount - in this case, nearly equal to an entire year's profits of its parent company, Altria - merely to get its day in the appeals court.

Out of self-interest, the attorneys general say the bond should be about $1.5 billion, which seems reasonable.

But the controversy over the appeal should not mask the dangerous level of dependence the states have developed on tobacco money.

The national settlement, now nearly five years old, required tobacco companies to pay $206 billion over 25 years to 46 states. Philip Morris, the largest, is on the hook for about half of the total.

This is such an enormous amount of money that state officials - addicts that they are - just can't help spending it, and depending on it, for every-day operations. In Ohio's case, a better idea would have been to set up a trust fund and spend the interest.

Today's term-limits laws make it a virtual certainty that none of today's lawmakers will be around when the tobacco money runs out. Otherwise, they would quickly learn the painful meaning of what all addicts dread: quitting “cold turkey.”



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