Lawmakers will raid state's tobacco trust fund
By By Sid Salter
Jan. 2, 2001
It is in the inimitable words of many a Dan Jenkins character a mortal lock. Lead-pipe cinch. Done deal.
Attorney General Mike Moore will scream bloody murder as will child-care advocates, good government crusaders and the press. But the handwriting is on the wall.
Based on the 1997 settlement Moore negotiated between the state and the tobacco industry, the state is projected to receive $3.3 billion unless the tobacco companies dive into bankruptcy. The tobacco fund to date is $650 million. Earnings from the investment of the tobacco fund and a portion of the principal are to be placed annually in the Health Care Expendable Fund. The rest? Trust.
Moore can't salvage it
Another $210 million tobacco fund payment is due this month. Trust? No.
Wave goodbye to the cash, Mike. Buh-bye. "Trust fund" my eye …
Oldtimers will recall the late Gov. Ross Barnett's oft-quoted observation regarding prison inmate "trustys" at the Governor's Mansion who misbehaved: "If you can't trust a trusty,' who can you trust?"
In terms of the tobacco trust fund, it seems that as taxpayers, we can't trust the legislative trustees of the tobacco trust fund much more than Barnett trusted inmate "trustys" which is not much.
Over the next few weeks, we'll all see and hear some pitiful hand-wringing, whining and excuse-making. Wouldn't surprise me if a few lawmakers actually well up a tear or two in the process such will be the depth of their camera's-rolling, reporter's-writing public despair over raiding the state's tobacco trust fund as one major means of dealing with the state's dismal budget woes.
But when the last drop of flop-sweat has been wiped from their upper lips and the last political wah-wah-wah has been uttered for the benefit of the TV cameras, make no mistake the Mississippi Legislature will definitely raid the tobacco fund this session.
No money and no other place to go to get any new money save a tax increase and in this economy, a tax increase isn't happening. Not unless times get worse, mind you, and they very well could.
What's the Legislature going to do with the money? First, bail out the $124.6 million Medicaid shortfall and maybe the $72 million the agency is seeking in additional money for the next fiscal year.
There are other needs the Legislature must meet and if they diverted the entire 2002 tobacco fund payment, it still wouldn't be enough to meet agency demands for increased funding made public during budget hearings in the fall. That's how bad the state's budget crisis really is at this critical juncture.
They will ignore Musgrove
Gov. Ronnie Musgrove wants to divert $100 million from the tobacco payment that he claims he can parlay without providing the first concrete detail of how into $400 million in U.S. Department of Health and Human Services waivers.
Lawmakers were skeptical of Musgrove's plan when he presented it to them, as have been most members of the press who've heard Musgrove's vague, unsubstantiated plan. It's unlikely Musgrove will win diversion of the funds for his purposes, but the Legislature simply has no other option but to tap the tobacco money this session and they will.
The Legislature's only other option is to cut spending. Reduce the state payroll. Eliminate duplication in state agencies and programs. Make hard, painful decisions that will cost some of them re-election in 2003. Anyone want to bet on that?
There's not enough money to fund existing programs without a serious belt-tightening. There's no new money for much of anything. The tobacco money is, in reality, only a large drop in the bucket.
Trustees or "trustys?" Once the tobacco fund is raided the first time, the danger is that they'll do it again and again.