NJ Must Repay Tobacco Settlement

Excerpts
Instead of spending millions from a landmark 1998 settlement with the tobacco industry on smoking cessation efforts, New Jersey this year will begin repaying hundreds of millions of dollars to bondholders after converting the settlement money into $90 million to fill a budget hole in 2014.


The Christie administration, in fact, slashed state funding for smoking cessation from around $7 million when he took office to zero dollars since 2013. Spending cuts on the programs over Christie's administration ended all state funding for five quit centers.


At the height of state funding for tobacco control in 2002, New Jersey funded 17 quit centers, but now the state funds none, and the 13 full-time positions at the Rutgers Tobacco Dependence Program that conduct outreach and education programs were eliminated, according to Dr. Michael Steinberg, Rutgers Department of Medicine vice chairman who now volunteers to run the program.


This year, the state begins handing over to bondholders cash that pours into New Jersey's coffers every year thanks to the 1998 Master Settlement Agreement between 46 states and the tobacco industry. New Jersey is expected to pay out about $400 million through 2023 to bondholders to repay the $90 million infusion the Christie administration needed to close the 2014 budget hole.


The 1998 agreement ensured that the tobacco industry would pay states billions of dollars in perpetuity, with the aim of directing cash to programs to stop smoking. New Jersey was a leader in the field in the early 2000's, but that began to change when the administrations of Democrats Jim McGreevey and Jon Corzine began trading settlement cash for money upfront. When the Republican Christie took office in 2010, he ended the state's $7 million spending on tobacco programs. At the time, he cited declining rates of tobacco use.

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