States Learn How to Spend the Tobacco Settlement Windfall

Conference for governors and their policy advisers on the national tobacco settlement

In 1999, the National Governor's Association, Center for Best Practices, Washington, convened a conference to brief state governors and policy advisers on the landmark settlement of a suit by the states against the tobacco industry.

According to the settlement, reached in November 1998, the five major tobacco companies will provide $206 billion over 25 years to compensate states for their health care costs associated with smoking. Parties to the lawsuit and settlement included 46 states, five commonwealths and territories, and the District of Columbia.

Key Results

  • The conference, entitled "The National Tobacco Settlement: Making the Money Count," took place in Pittsburgh, Pa, on September 15, 1999, three months before most states were scheduled to receive their initial payments under the settlement.

    Some 70 people attended, representing 31 states. While the National Governor's Association sponsored the event, other organizations helped set the conference agenda, including the National Association of Attorneys General, the Campaign for Tobacco-Free Kids, and the American Legacy Foundation, which was created under the settlement to study and develop methods for reducing tobacco use among young people.

    The American Legacy Foundation also helped support the travel of state representatives.

    During six plenary presentations and one plenary panel, conference attendees reviewed such topics as:
    • An overview of the tobacco settlement
    • The role of the American Legacy Foundation
    • Best practices in state tobacco control programs
    • Principles for spending settlement revenues
    • Measuring the effectiveness of smoking prevention and abatement programs
    • The future of tobacco companies
  • The conference sponsor produced an issue brief on the spending of tobacco settlement revenues and a fact sheet on securitization — a method by which states could receive an upfront lump-sum payment instead of their 25-year settlement payout. (See the Bibliography for details.)

    The Campaign for Tobacco-Free Kids provided state-specific notebooks for each delegation. The Office on Smoking and Health of the Centers for Disease Control and Prevention (CDC) provided participants with copies of its publication Best Practices for Comprehensive Tobacco Control Programs.
  • The National Governor's Association created a Web page on the settlement (no longer available). The association sent copies of the CDC's Best Practices publication to every governor. Governors also received memorandums briefing them on:
    • Initial fund disbursement and the settlement's independent auditor process.
    • The launch of the American Legacy Fund education campaign.
  • Seven states participated in a conference call hosted by the governor's association for governors' policy staffs on securitization. Eleven states requested and received technical assistance on such topics as the impact of the gray market in tobacco sales, smokeless tobacco, and programs targeting minority youth.

Under a cooperative agreement with the CDC, the NGA Center for Best Practices will continue to update its tobacco Web page and provide other information and technical assistance for states on the settlement.

Funding

The Robert Wood Johnson Foundation (RWJF) provided a grant of $29,879 between September 1999 and February 2000 to support the project.

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