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Crush of interests line up for Md.'s tobacco settlement; Research, growers among those vying for part of $4.6 billion


There's no gold yet, but the rush is on.

With $4.6 billion due as Maryland's share of the national tobacco suit settlement, eager applicants are lining up with plans for a chunk of the cash that will flow into state accounts for the next 25 years.

The heart, lung and cancer associations; leading state hospitals; representatives of rural interests; tobacco growers and legislators are among those stepping forward with plans that would use a third or more of the payout, which could run from $138 million to $224 million a year over the next four years.

Lobbyists and institutions' vice presidents are lining up outside key legislators' offices and committee rooms to testify in favor of a range of bills calling for study groups, foundations and dedicated funds from which all manner of initiatives could be pursued.

"You can run a list of worthy projects up your arm," says House Speaker Casper R. Taylor Jr., a Cumberland Democrat.

Adds Sen. Robert R. Neall, an Anne Arundel County Republican: "Somebody once said, '$4 billion draws a crowd.' "

Among the suggested uses up for consideration by the General Assembly:

The University of Maryland's Greenebaum Cancer Center is seeking $10 million per year to reduce cancer deaths by creating a statewide network of research and treatment that would make Maryland "the national model for cancer care."

Tobacco farmers are looking for help in developing alternative crops, and other assistance.

Johns Hopkins Hospital wants buildings for scientists and doctors, hoping they can attract hefty research grants.

Several legislators want to establish a fund to receive and distribute the money -- primarily for education programs that will reduce the number of Maryland young people who start smoking. One would establish a 17-member task force to study how other states are using the tobacco money and to advise Maryland.

The Forum for Rural Maryland, a government entity that seeks solutions to development problems unique to rural areas, wants improved "access to adequate health service."

Gov. Parris N. Glendening, who will have the most to say about how the money is used, has created a special reserve fund in his fiscal year 2000 budget to accept the first $54 million, setting it aside generally for health and education programs.

"People are coming up with ideas faster than you can say tobacco," says Ray Feldmann, Glendening's press secretary.

"What [Glendening] doesn't want is more tax cuts or other programs to balance the budget," Feldmann says. "He's for programs that are related to the reason we're getting this money -- primarily in regard to children."

A hearing on how to spend the money will be held today by the Senate Finance Committee. Last week, representatives of several would-be beneficiaries testified before the Senate Budget and Taxation Committee.

Among these were the American Academy of Pediatrics, the American Cancer Society, the Forum for Rural Maryland, the Maryland Academy of Family Physicians, the State Council on Cancer Control, the American Heart Association and the American Cancer Society.

Testifying on behalf of the cancer and heart associations, Eric Gally told the committee, "As you get pulled in many directions we strongly urge you to consider spending a third of the funds to solve the long-term problems that caused the problem in the first place."

Data collected by the national Centers for Disease Control and Prevention, several witnesses said, suggest that a carefully planned "prevention and cessation" program could significantly reduce the state's primary cause of death and chronic disease.

State Sen. Leo E. Green, a Prince George's Democrat, and Del. John Adams Hurson, a Democrat from Montgomery County, are urging formation of an independent, nonprofit foundation to collect and distribute the money.

Green's agency would be called the "Cigarette Restitution Fund." Hurson would call his the "Maryland Tobacco Control Foundation." Green's bill anticipates annual revenue of $800,000. Hurson's would claim a third of all the to- bacco funds coming to Maryland.

It is likely that no firm decisions on use of the money will be made this year, but pressure is being applied early by those who wish to shape the government's thinking.

Representatives of the Greenebaum Cancer Center met for 45 minutes yesterday afternoon with Taylor. Other supplicants are represented by legislators and lobbyists eager to pitch their ideas.

Neall has his own idea. Some 700,000 Marylanders have no health insurance, he says, so why not use the settlement money to "leverage" a plan that would give them at least rudimentary coverage. The state's money would supplement contributions from workers and their employers.

"I just think we ought to do something special with this money," he says. "We're not likely to get a chance like this again."

Neall observes that state government, with federal help, provided health insurance for low-income children last year -- and it now has an opportunity to help their working parents. The assembly's Department of Fiscal Services is researching the cost of such a program, he said.

Neall and others are anxious to have the new money handled "off budget" so the state's spending affordability guidelines are not affected. That approach, he says, will make it easier to resist using the money for day-to-day government operations.

The money will come from a November 1998 agreement between the attorneys general of 46 states, Puerto Rico and the U.S. Virgin Islands with the five largest tobacco manufacturers. That agreement ended a four-year legal battle between the states and the industry begun in 1994. Over the next 25 years, the states will receive a total of $206 billion.

Maryland is expected to receive $175 million the first year. In 2001, the state is expected to get $224 million; in 2002, $142 million; and in 2003, $138 million.

The first installment -- more than $54 million -- has been earmarked by Glendening's budget experts for a state reserve fund. With the approval of the Legislative Policy Committee, this money could be allocated by a budget amendment. The money will become available after various details have been worked out -- including a major decision from the federal government.

Fifty percent or more of the money headed to the states is owed to the federal government -- so states are lobbying hard to convince Washington not to claim its share.

In Annapolis last week for a round of conversations with lawmakers, Democratic Sen. Paul S. Sarbanes was optimistic that Maryland will keep 100 percent of its tobacco money.

"I think [the federal government] is not averse to that if they're assured that the money will be used for health care," he says. "Obviously, that would be the key issue in their thinking."

Pub Date: 2/24/99

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