Posted by: audreybenenati | January 7, 2010

$258M from tobacco settlement for Ohio held pending court

Article published January 07, 2010

COLUMBUS – Ohio shouldn’t count just yet on spending $258 million in tobacco settlement funds as the fight over the money heads for the state Supreme Court.

The American Legacy Foundation, a Washington-based anti-smoking organization, said yesterday it will seek an appeal of last week’s court ruling that found the state could spend for other purposes money it had set aside almost a decade ago for smoking treatment and cessation programs.

The decision to appeal means the money will remain frozen until the state’s highest court settles the question. The state is banking on that money to fund county adult and child protective services, optional Medicaid programs such as adult dental care, and expanded health-care coverage for children in the current budget.

"When we were asked to join the fight to safeguard these monies for their intended purpose, we considered it a moral imperative and still do," said Dr. Benjamin K. Chu, chairman of the foundation’s board.

A three-judge panel of the Columbus-based 10th District Court of Appeals unanimously ruled last week that the state had not surrendered its right to change its mind after setting a portion of its settlement with major cigarette manufacturers for the new Ohio Tobacco Prevention Foundation.

The decision overturned last year’s Franklin County Common Pleas Court ruling that found that the foundation endowment was an irrevocable trust that even lawmakers who created it could not now revoke.

In 2008, the state initially announced a $1.57 billion job-creation package that would use $40 million of what was then $230 million in the foundation’s trust to fund biomedical and biotechnical research and product development.

The Ohio foundation’s board balked and voted to immediately transfer $190 million of its fund to the American Legacy Foundation before the state could get its hands on it.

An angry Mr. Strickland and General Assembly responded by dismantling the foundation and confiscating all $230 million. The value of the trust has climbed to $258 million as the court fight continued.


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