Del Papa: Hands off tobacco funds

CARSON CITY -- Attorney General Frankie Sue Del Papa says she expects Gov. Kenny Guinn to refrain from spending the annual $48 million coming to the state from the national tobacco settlement until arguments over distribution of the money are settled.

But state Budget Director Perry Comeaux isn't talking. He had "no comment" whether the money would be included in Guinn's $3.1 billion budget to be presented tonight in the State of the State message.

Nevada will receive $1.2 billion over 25 years as a result of a settlement with the major tobacco companies last year. But the federal government may want part of the money. In Nevada's case, that could be 50 percent.

Lawsuits filed by the states against the cigarette companies claimed that money was due them for the extra cost of taking care Medicaid patients who suffered from tobacco-related illnesses. The federal government pays part of the cost of Medicaid.

In Mississippi, for instance, Del Papa said the federal government picks up 80 percent of the cost. In Nevada it's about half. She said one state, Hawaii, has already received a letter from the federal Health Care Financing Administration that it wants part of the tobacco settlement money.

The attorney general sent letters Friday to the governor, budget office and the Legislature urging them not to plan on spending the money until it is in hand. At the very least, she said, the state should not count on 50 percent of the annual allotment.

"Due to the uncertainty regarding the actual receipt of tobacco settlement funds and any potential federal claims against them, I am requesting that at least for the 1999-2001 biennium, the governor's budget not include any recommendation for the use of tobacco settlement proceeds and the state Legislature not approve any budgets which anticipate using tobacco settlement proceeds," she said.

Senate Majority Leader Bill Raggio, R-Reno, supported Del Papa. "I certainly agree we don't spend money we don't have," he said.

When the money is spent, there's a question of what it will go for. In some states, there's a push to use the money for different purposes, ranging from teacher salaries to adding new probation officers to building youth detention centers.

In Louisiana, Gov. Mike Foster has suggested selling off its proposed $4.4 billion settlement and use the cash to retire the state debt. Money would then be available for pay raises for schoolteachers. In Alabama, the Legislature approved $85 million for youth programs, including health coverage, new detention centers and added probation officers.

Guinn has already said the money should be used for health purposes. Del Papa said the settlement intended that the money be used for public health purposes. Nevada and Colorado, Del Papa said, went a step further and pinned down the money to be used not only for "public health purposes" but for such things as prevention, treatment and education programs on tobacco and substance abuse.

The governor or Legislature could put the entire amount in health programs, such as Medicaid, then withdraw a like amount of state money to finance other programs.

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