Hawaii Diverts Millions In Tobacco Settlement Funds

 UPDATED 6:58 AM HST Mar 05, 2012
HONOLULU -

A report due out later this week by the U.S. Surgeon General is expected to criticize states that have diverted tobacco settlement funds to balance their budgets.

Although Hawaii is not expected to be among the top offenders, hundreds of millions of dollars have been used for other purposes not linked to smoking cessation programs or public awareness campaigns.

"It's really shortsighted when we start using these funds just to balance the budget rather than putting them strategically into prevention programs," says Deborah Zysman, executive director for the Coalition for a Tobacco-Free Hawaii, a nonprofit group that receives tobacco settlement funds for its operations.

Since a master settlement was signed in 1999, Hawaii has received $536,727,359 from the tobacco industry. Of that, $71,794,848 has been set aside for the Tobacco Prevention and Control Trust Fund, a pot of money used for anti-smoking programs and public service announcements. However the lion's share of the tobacco settlement, $464,932,511 has been diverted by state lawmakers for other purposes.

"We understand there are other priorities and other concerns, and lawmakers have a tough job," said Lola Irvin, the state's Tobacco Settlement Project Manager. "A lot of other states have gone so far as to then take all of the funds and divert them for other purposes."

Irvin points out that much of the nearly $465 million in diverted tobacco settlement funds have gone to worthwhile causes. Lawmakers used a large portion of the money to build the John A. Burns School of Medicine in Kakaako and to fund the school's day-to-day operations. Other uses include funding programs at the state Department of Health as well as capitalizing the state's rainy day fund.

However in 2011, lawmakers passed a bill that diverts all $6 million that would have been deposited into the tobacco prevention fund. Instead, the money is being used to help balance the state's general fund during a tough economic cycle. But if monies continue to be sidetracked, the tobacco fund could dry up in as little as four years. The fund has a current balance of $45 million, but on average Hawaii spends $7 million to $8 million per year on anti-smoking programs.

"So now we're definitely dipping into that savings account, is basically what it is," said Zysman. "We're living kind of on borrowed time, which is unfortunate because we know that tobacco prevention programs work."

In addition to diverting money for other purposes, the percentage of tobacco settlement funds set aside for smoking cessation programs continues to drop. Initially, 25 percent of monies received by Hawaii from the tobacco industry were set aside for the Tobacco Prevention and Control Trust Fund. In 2002 lawmakers lowered that percentage to 12.5 percent. In 2007 it was lowered once again to 6.5 percent. In 2015 the percentage is set to go back up to 12.5 percent, but nothing is guaranteed. "It is a revenue that is looked at," said Irvin.

To date, Hawaii's anti-smoking programs have been extremely successful. From 2000 to 2009, the number of high school students who smoke has decreased from 12,000 to 5,500. Adult smokers meanwhile have dropped from a peak of 187,900 in 2002 to 154,000 in 2009.

Anti-smoking advocates say that type of success can only be maintained if a substantial amount of money remains available. "We have to keep things going because that industry is not going away," said Zysman.

Although the tobacco settlement is supposed to last into perpetuity, Irvin likens it to a tree with many branches. She says the Tobacco Prevention and Control Trust Fund is the trunk, and if it's cut down, much of the state's progress will be lost.

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