Newspaper article THE JOURNAL RECORD

Directing the Money Flow into Oklahoma

Newspaper article THE JOURNAL RECORD

Directing the Money Flow into Oklahoma

Article excerpt

When Oklahoma started receiving its first payments from the landmark tobacco settlement, says Attorney General Drew Edmondson, state officials realized they needed to address a basic issue: "We've got the money coming in -- now what do we do with it?"

Speaking to the Silver-Haired Legislature at the State Capitol on Wednesday, Edmondson said officials did not want to be like the farmer who won the Irish Sweepstakes. When someone asked him what he planned to do with his winnings, Edmondson said, the farmer replied, "keep farming until it's all gone."

"That's what will happen if all of the money goes into the general revenue fund," the attorney general said.

Although Oklahoma's share from the master settlement with major tobacco companies has been projected at about $2.3 billion over the next 25 years, Edmondson pointed out, payments do not stop at that point. He said they will last as long as tobacco products are sold in the United States.

However, with the limitations on cigarette marketing, stress on prevention and cessation and other programs built into the settlement, Edmondson said that officials are hopeful consumption will drop, especially among young people. The attorney general noted that 3,000 teenagers take up smoking every day.

"We hope this source of revenue will diminish in the future," Edmondson said.

It is precisely this uncertainty about the tobacco-settlement revenues, he said, that prompted officials to decide Oklahoma's portion should be placed in trust.

A state question setting up the trust mechanism is on the Nov. 7 general election ballot.

It provides that a graduated percentage of the tobacco funds be placed in trust each year, beginning with 50 percent of next year's payment. Deposits would increase incrementally each year by 5 percent, capping off at 75 percent of the total annual payment in 2007.

"We shouldn't build that money into the state agencies' budgets, because it may decline," Edmondson said. "Then we would be in a fiscal crisis."

By placing it in trust, he said, the state will have not only the settlement principal, but growing millions in interest earnings. …

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