Spending Tobacco Funds: States Cook Up Their Own Recipes.

• Author: Hough, Melissa

State lawmakers are taking a careful approach to make sure their states take advantage of the opportunities the historic tobacco settlements provide.

In an effort to give students a taste of how the legislative process works, some state lawmakers use an exercise that challenges a class to come up with the perfect recipe for the chocolate chip cookie. Students learn that compromise and negotiation are key to finding a recipe the majority can accept.

Back in the legislative chambers, legislators are finding more cooks in the kitchen than usual as they try to come up with the perfect recipe for the historic $246 billion tobacco settlements with the five largest tobacco manufacturers.

There are as many suggestions on what to do with the settlement money as there are chocolate chips on the local grocer's shelf. Some national groups insist the payments be used only for tobacco prevention programs. State legislators, however, recognize that the agreement included no conditions and are - for good reason - rejecting "one-size-fits-all" approaches.

"The settlement agreement specifically gives state legislatures full authority to spend the money the way they see fit - and that fill the citizens' most pressing needs," says Indiana Republican House Leader Paul Mannweiler, president of the National Conference of State Legislatures.

"For some states that may mean spending more for health care and for others it could mean more for education, while some may use it to improve highways. I believe state legislators always listen to their constituents and spend money accordingly," he says.

As of early September:

* 35 states have enacted the model statute required by the settlement agreement.

* 19 states have passed laws to put their tobacco settlement money in trust funds. Four states decided to put the funds in endowments, and some states have done both.

* 23 states have passed enabling legislation or appropriation acts concerning how the money should be spent. (These laws vary greatly, however).

* Other states ran out of time and deferred action to the 2000 sessions.

It hasn't been an easy task. "Since there are no restrictions on the money, everybody's got something they believe is worthy of priority funding," says Arizona Representative Susan Gerard. "It's a feeding frenzy. I see myself standing here with a huge fly swatter saying, 'Back, back,' but they still keep coming."

At least 480 bills related to the tobacco settlement were introduced in 49 states (Kentucky was not in session). Some 177 passed one house or the other, and at least 80 became law.

While 23 states (including Florida, Minnesota, Mississippi and Texas) have enacted enabling legislation or appropriation acts concerning how the money should be spent, only 12 percent of has been allocated for specific projects, programs or activities. This is approximately $1.1 billion of the $8.8 billion that will be available by June 30 next year.

SLOW FOR A REASON

Decision making has been slow for several reasons. Many states deferred actions until the federal recoupment issue was decided and were adjourned before it was resolved in May. Others decided to make broad decisions to create health trusts, but left the details to next year.

Although there are bills that would use the money for such things as veterans' homes, dinosaur museums, rescinding turnpike tolls, fire departments and highway construction, so far most of the allocated funds - 51 percent - are aimed at health care services. Another 14 percent goes to K-12 education and...