When the smoke clears, where will the money go?
By Daniel Sturm
Four years ago, Michigan, along with 45 other states,
settled a lawsuit with the tobacco industry to recover smoking-related
health care costs, to reduce youth tobacco use and especially to decrease
tobacco marketing to kids. The industry committed to paying $246 billion
over the next 25 years, including $8 billion to Michigan. Since 1998
the state has already received $610 million.
three-quarters of Michigans money does not go to fight smoking
or improve health, but to finance college scholarships. According to
the national Campaign for Tobacco-Free Kids, the state government under
Gov. John Engler has provided zero funding for tobacco prevention. Michigan
is tied for last on the organizations list of the ten most
disappointing states together with North Carolina, Tennessee and
the District of Columbia. Instead, Engler has divided the settlement
revenues received so far in two ways: $103 million annually for the
Michigan Merit Scholarship Award and $90 million for the development
of a state life-sciences research complex and prescription drug coverage
In July, Citizens for a Healthy Michigan turned in 476,000 signatures
of Michigan voters to put an initiative on the Nov. 5 General Election
ballot. If voters approve, 90 percent of the tobacco settlement money
would fund critical smoking prevention, research and health-care programs.
The state general fund would receive the remaining 10 percent.
Having lost the race for Republican gubernatorial candidate, Sen. John
Schwarz recently signed on as the chairman of a new coalition, Protecting
Kids and the Constitution, which strongly opposes the Healthy
Michigan ballot proposal.
Schwarz is also a board member of the American Legacy Foundation, which
stands firmly behind tobacco control programs. This inconsistency raised
questions about both the American Legacy Foundations position
and Schwarz credibility. The boards vice chairman, Steve
Schroeder, commented: We greatly respect Sen. Schwarz. However,
it is important to clarify that the American Legacy Foundation has always
stood for the strongest possible tobacco control efforts.
In a recent report, Saving Lives, Saving Money, the Washington-based
organization stated that by reducing smoking rates 25 percent Michigan
could save $22.7 million a year in Medicaid. In June they ran ads urging
that tobacco settlement dollars be spent on tobacco reduction programs.
Schwarz said foundation officials know he disagrees with them on this
issue. But this has nothing to do with (the foundation), it has
to do with public control of public dollars. He said Michigan
already spent enough money in anti-smoking campaigns. He argued the
increase of the cigarette tax to $1.25 a package was an appropriate
incentive to quit smoking.
Smoking is an idiotic habit that people have, but cigarettes are
a legal product. If people are dumb enough to buy them, its their
business. He said the anti-tobacco groups approached cult
status and treated the rest of us like people who really
Schwarz said if the proposal passed, the state would have to pull $300
million out of an already approved 2003 budget, and the hospitals were
under no obligation to spend the money on tobacco-related costs. In
his view, the proposal is a massive attempt of money grabbing.
Organizations pushing the anti-tobacco campaign such as the Michigan
Hospital Association represented a very greedy group of people,
Schwarz quickly emerged after his unsuccessful primary election bid
as a visible opponent to the initiative. Two days after he lost to Lt.
Gov. Dick Posthumus, Schwarz led a press conference with student government
presidents of 20 Michigan colleges and universities who oppose the initiative.
The student leaders are concerned about losing scholarship money if
the ballot initiative passes. Schwarz is one of the legislators who
implemented the Merit Scholarship providing $2,500 to college-bound
students who meet Michigan Educational Assessment Program test standards.
During the last three years, nearly 140,000 Michigan youths have received
the awards to help them attend universities, community colleges, or
technical schools. Now the students fear the program will end on Jan.
1, 2003, if the Healthy Michigan Amendment is successful.
Clayson, who chairs a branch of student government at MSU, said the
student leaders contacted Schwarz since he is such an opponent
of the ballot initiative (and) a big proponent of student activism.
He said with
Michigans current budget shortfall he couldnt see where
another funding source would come from. They consulted with Schwarz
on how to build regional coalitions against the Healthy Michigan proposal
and discussed the importance of registering student voters to
show their opposition on election day.
While it seems plausible that students are concerned about losing scholarship
money, its not quite clear why they would campaign against the
ballot initiative for a healthier Michigan. Should college undergraduates
now draw black-and-white scenarios, only to pit education against health?
Clayson, who is a pre-law student, said he wasnt only interested
in keeping the Merit Award Scholarship money, but also wanted to initiate
a political fight against the ballot initiative. Most people involved
in student governments are interested in good government, and this ballot
initiative leads to bad government, because it earmarks our Constitution
for a special interest group. Clayson claimed the state was already
spending $24 million annually on anti-smoking programs and had success
in reducing smoking.
But the ballot proponents say these figures are false. Charlie Baase,
spokesman for Tobacco-Free Michigan, said the state really spends less
than $6.5 million per year. He argues that opponents purposely create
misleading statistics by adding to their figures funds for programs
like the Council of Michigan Foundations ($3 million) that dont
mandate tobacco prevention. Even if the oppositions claims were
accurate, Michigan would still not come close to the recommendation
from the National Centers for Disease Control and Prevention that Michigan
should spend between $54 million and $152 million per year on tobacco
prevention and reduction.
Baase, who observed the meeting, believes Schwarz led students down
the wrong path. They were told that the money for the Michigan
Merit Scholarship runs out on Jan. 1, he said. However, in all
likelihood the next governor, whether it be Jennifer Granholm or Posthumus,
will find funding for the scholarship because its a politically
thinks its very curious that Schwarz, who is a medical doctor,
is campaigning against the Healthy Michigan Amendment, in clear conflict
with his work for the American Legacy Foundation. He said its
even more suspect given that the coalitions campaign to fight
the ballot initiative is run by the Marketing Resource Group, a Lansing
company that has a long history of representing the tobacco industry.
The coalitions spokesperson, David Waymire, is also the marketing
companys vice president. Among their clients are Philip Morris
and the Indianapolis-based Tobacco Institute. They work for big business
corporations such as AT&T, the Perrier Group of America and the
Wolverine Pipe Line Co. MRG represents a large number of Republicans,
including John Engler and Posthumus, as well as the Republican National
Committee and the Michigan House Republican Campaign Committee. City
Pulse has copies of MRGs 1999 communications plan supporting Philip
Morris in its fight against the threat of a federal lawsuit.
In the same plan, the public relations firm also discussed recruiting
potential beneficiaries of the tobacco settlement money. Governor
Engler has proposed to use all the funds to back his Michigan Merit
Scholarship Awards program.
As the issue heats up, we may find
some unusual opponents to the federal plan (for distributing the money).
While we may not be able to call them allies, their opposition
could be just as effective.
Clayson doesnt mind being involved in a political battle against
the implementation of tobacco control programs. He believes the health-care
system doesnt need more money. Instead he suggests spending more
on education, since research showed there was a link between education
levels and tobacco habits. He argues that only 11 percent of all smokers
are college-educated, which seems to indicate that the more educated
a person is, the less likely they are to smoke.
But student leaders might want to rethink some of their positions. In
battling against improving the health-care system, they inadvertently
aid the tobacco companies in their efforts to thwart tobacco reduction
programs. They might consider improving their own funding system, which
awards money disproportionately to children of white middle-class families.
Two years ago, the American Civil Liberties Union filed a lawsuit charging
that Michigans merit scholarship program relied on a standardized
test that discriminated against minorities. White students are nearly
five times more likely to receive the scholarship than African-American
students. In November 2001, the ACLU won a partial victory, as a federal
judge rejected the states attempt to dismiss the case.
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