Plan for tobacco fund raid is stalled

4/5/2008

COLUMBUS - In open defiance of the governor and General Assembly, the organization behind Ohio's anti-tobacco efforts yesterday voted to protect $190 million of its funds by giving it to three nonprofit organizations beyond the state's reach.

"The foundation supports job creation in Ohio. We don't believe people have to give their lives to do it," said Dr. David Rummel, chairman of the Ohio Tobacco Prevention Foundation.

Democratic Gov. Ted Strickland and Republican legislative leaders struck a deal Wednesday that calls for raiding $230 million from the foundation's trust fund to help finance a $1.57 billion economic stimulus package.

This would have left just $40 million in the foundation endowment, less than the agency's annual budget for its "stand" marketing program targeting youths and other programs.

In a joint written statement, Mr. Strickland, Senate President Bill Harris (R., Ashland), and House Speaker Jon Husted (R., Kettering) said they found the foundation's maneuver "troubling."

"The funding we have identified for our investments in Ohio's future are state dollars and we feel the state is best suited to determine how those dollars are best utilized," they said.

"We will take every step necessary to prevent the foundation from circumventing a bipartisan decision that has been made for the good of all Ohioans."

When initially created, the plan was for the foundation to operate solely on investment earnings from what was supposed to be an endowment in excess of $1 billion by now.

"This would pretty much sound the death knell," said Micah Berman, director of the Tobacco Public Policy Center based at Capital University.

The loss of the money could have forced the foundation's board to choose between burning brightly but briefly or severely curtailing its programs to extend its life.

Instead, $190 million of the trust's $270 million balance will be divided equally between the Campaign for Tobacco-Free Kids, the American Legacy Foundation, and the Ohio Hospital Association for Healthy Communities Foundation.

That would leave $80 million in the trust, which the foundation said would be enough to continue operations for two more years.

"The board felt like it was given no choice but to do whatever it had to do to protect and save Ohio lives," said Dr. Rummel. "Any reduction in funding jeopardizes the pocketbooks and lives of Ohioans in every part of the state."

The board voted 10-4 in favor of the transfer. Negative votes came from Sandusky County Board of Health Vice President Sandra L. Wise, a new Strickland appointee; Central Ohio Breathing Association President Marie Collart, appointed by House Speaker Jon Husted (R., Kettering); R.L. Richards, a trustee for the R. David Thomas Trust appointed by the governor, and Lisa Stafford, of the Ohio Commission on Minority Health.

The board also voted to ask Attorney General Marc Dann to appoint outside counsel to represent the foundation as it questions whether the state has legal authority to take back money already given to the foundation.

Shelly Kaiser, spokesman for the American Lung Association in Ohio, characterized the bipartisan job-creation plan as a "tobacco stimulus package" that would lead to greater future health-care costs for the state.

"Governor Strickland says [the foundation needs] $40 million forever , but that would be about three weeks' worth of what the tobacco industry spends [promoting its products]," she said.

"Forever versus three weeks, how can we compete against that? That's just absolutely unrealistic."

The foundation is financed through proceeds from Ohio's settlement with major tobacco companies like Philip Morris and R.J. Reynolds, but most of the money intended for the foundation was diverted to other purposes.

Last year, Mr. Strickland and the legislature sold the next four decades of settlement checks for a lump sum of $5.5 billion to finance a property tax cut for senior citizens and the disabled and to accelerate school construction.

That ended any chance the foundation could expect future checks.

Contact Jim Provance at:

jprovance@theblade.com

or 614-221-0496.