State borrowing imperils anti-tobacco foundation

5/16/2003

COLUMBUS - Ohio's fledgling anti-smoking campaign said it may be out of business by the time the state gets around to repaying hundreds of millions it has “borrowed” to balance its books.

“Our time is running out,” said Mike Renner, executive director of the Ohio Tobacco Use Prevention and Control Foundation, financed by part of the state's $10 billion settlement with major tobacco companies.

“If we want to make an impact and spend at the [Centers for Disease Control and Prevention] recommended minimum for Ohio of more than $60 million a year, odds are we won't be around in 2012 to receive that payment,” he said. “We are being forced to make the unfortunate decision of being impactful versus being around.”

The General Assembly has been attaching IOUs to the budget indicating that the money will be repaid over three years beginning in fiscal year 2013. The chairman of the Senate Finance Committee wasn't optimistic the state would go along with a foundation proposal to accelerate repayment of the $360 million total that will have been diverted by this time next year to help balance the state's ailing budgets.

“At this point, with the economy the way it is, it would be very difficult to put forward a concept of accelerating the payments,” said Sen. Bill Harris (R., Ashland). “No member has yet come to me with that proposal.”

Even before the foundation launched its “Stand” media campaign aimed at youth smoking about a year ago, lawmakers began diverting money that was meant to serve as principal to earn the interest to pay for it. The money from the likes of Philip Morris and R.J. Reynolds is part of the tobacco companies' settlement with states for the burden smoking-related illnesses have placed on state health care budgets.

Mr. Taft has proposed diverting the foundation's share a third time in fiscal year 2004 while leaving the money alone in 2005. For the second time, he has proposed diverting the portion earmarked for construction and renovation of schools and replacing the money with capital bond borrowing.

The House included that proposal in its $48.5 billion, two-year budget now pending in the Senate.

“We should have never promised to repay, because I doubt it will ever be repaid,” said Sen. Ron Amstutz (R., Wooster). “You can't commit a future General Assembly. There will always be something that competes for that.”

The debate occurred even as the U.S. Senate was approving a plan to send $20 billion to cash-strapped states and cities. But in a conference call with reporters from his trade mission in Mexico, Gov. Bob Taft cautioned against counting on that to help balance the state's budget.

“As I understand it, this would be some one-time help to the states,” he said. “It could be some short-term relief, but it's not going to resolve our long-term, continuing structural imbalance.”