Archive for Monday, October 22, 2001

States turn to tobacco money to balance budgets

October 22, 2001

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— Faced with a ballooning budget deficit, Gov. Bob Taft has proposed borrowing $100 million of the state's share of the national tobacco settlement to balance the books.

Governors and lawmakers around the country have been turning to the tobacco money, part of a $206 billion national settlement in 1998, as budget deficits grow in the face of a downtown in the economy, made worse by the Sept. 11 terrorist attacks.

"The tobacco dollars can be used in any way the states see fit," said Lee Dixon, a Washington analyst with the National Conference on State Legislatures. "The case can be made that the states are using the tobacco money to continue current services, and if they did not use tobacco money, they would have to eliminate some health programs."

At least four other states have used the money in the past year to balance their budgets, and more are considering such a move.

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