Wednesday, January 10, 2001
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Posted on: Wednesday, January 10, 2001

State's tobacco payout reduced

By Kevin Dayton
Advertiser Capitol Bureau Chief

Previous stories:
Tobacco money less than expected
Tobacco money may be diverted
The state is getting less money than expected from the settlement with tobacco manufacturers, putting a squeeze on the health promotion programs Hawaii plans to finance with the money, health officials said yesterday.

The amount the tobacco companies pay under the settlement is tied to the number of cigarettes they sell, and the companies have been reporting a drop in sales, said state Health Director Bruce Anderson.

Last year, the state expected to receive about $55 million from the settlement, but collected only $48.6 million, Anderson told members of the Senate Ways and Means Committee. This year the state had expected to receive about $45 million, but will collect only $38 million.

State officials earlier estimated the state would receive payments from the tobacco companies of about $1.3 billion over 25 years, but some reductions were expected, said Deputy Attorney General Alex Barrett, who works in the Tobacco Enforcement Unit.

Barrett said he still expects the state will receive more than $1 billion under the settlement.

The state in 1999 passed a law earmarking 40 percent of the tobacco money for a "rainy day" budget, and setting aside 35 percent for the Department of Health for health-related programs. The remaining 25 percent of the money is to go to a tobacco prevention and control trust fund for education programs to prevent smoking and help treat smoking-related diseases.

Any reduction comes equally from those three pots of money.

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