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Bill would end growth of tobacco fund

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A proposal to temporarily shore up the state’s lottery-funded college scholarship program would end the flow of tobacco settlement payments into a 12-year-old state trust fund, according to a state analysis.

Senators on Tuesday voted 40-0 for a measure that would use 25 percent of payments from the tobacco settlement to pay for the lottery scholarship program. The measure would use another 25 percent of the settlement payments for early childhood programs run by the Children, Youth and Families Department. The measure awaits consideration by the House.

New Mexico receives about $40 million annually from the tobacco settlement, according to a Legislative Finance Committee analysis. The lottery scholarship and CYFD each would receive an additional $10 million a year under the measure.

A spokeswoman for the American Cancer Society in New Mexico said the measure threatens the viability of the Tobacco Settlement Permanent Fund, which was intended to provide a reliable source of funding for tobacco control and prevention programs, and other health-related programs.

“We don’t think this is the way to spend this money because we’re underspending on tobacco control now,” said Sandra Abondakis, spokeswoman for the American Cancer Society’s Cancer Action Network.

New Mexico will spend $5.9 million for tobacco prevention programs this year and ranks 16th in the nation in per capita funding for those programs, according to the Campaign for Tobacco-Free Kids.

New Mexico’s tobacco settlement funds are governed by a 2000 law signed by then-Gov. Gary Johnson that placed 50 percent of the payments into the Tobacco Settlement Permanent Fund.

Under the law, the other half of settlement payments are placed in a program fund that can be spent on tobacco control and other health-related programs appropriated through the state’s budget process.

But lawmakers routinely find other purposes for tobacco settlement funding intended for the permanent fund, according to a Legislative Finance Committee analysis.

New Mexico has received a total of $532 million in tobacco settlement money since 2000, but less than a fifth that amount has gone into the permanent fund, the LFC found. The fund has received no in-flows since 2008, it found.

The tobacco settlement permanent found today contains about $158 million, the LFC reported.

State law gives the Legislature the authority to transfer money from the tobacco settlement permanent fund to the state’s general fund. To date, state leaders have not spent money from the fund, said Charles Wollmann, a spokesman for the State Investment Council, which oversees the trust fund.
— This article appeared on page A4 of the Albuquerque Journal

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