Tobacco fund won't benefit from settlement


More than $11 million from tobacco-related lawsuits will be used to plug holes in Vermont's budget in fiscal year 2015 and the Coalition for a Tobacco Free Vermont is not happy about it.

Vermont expects to receive a roughly $3 million installment in April 2014 from a multistate agreement with tobacco companies that dates back to 1998. Technically, the money will go to the Tobacco Trust Fund, set up at the time to fund programs for smoking prevention and cessation. But it won't stay there long, and it won't be used for the fund's intended purposes.

At a briefing on Gov. Peter Shumlin's proposed budget Jan. 15, Secretary of Administration Jeb Spaulding said the money would be diverted to help pay for Medicaid obligations.

A separate lawsuit against tobacco giant R.J. Reynolds Tobacco Co. for deceptive advertising won about $8.3 million for the state. That money has been intended for the General Fund since the settlement was announced in June.

"Vermont smokers shouldn't be robbed twice," the Coalition for a Tobacco Free Vermont wrote in a statement on Jan. 16. The organization urged lawmakers to preserve the Tobacco Trust Fund by keeping its small balance and building it up with the RJR settlement.

The Tobacco Trust Fund's balance reached its peak with a steady $30 million from fiscal years 2006 through 2009. It dropped to $10 million in 2012 after several diversions to fund Medicaid and is expected to plunge to under $150,000 by the end of June.


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