Beech Tree News Network

Since the days when settlers began moving west from Virginia, tobacco has played an intricate role in the economy of Kentucky by providing jobs and income to our farmers, and a boost to supporting state and local government.

But as we learned more about the harmful side effects of tobacco, attention switched to the manufacture and sale of tobacco products.  It led to the historic Master Settlement Agreement in 1998, in which companies like Philip Morris and R.J. Reynolds Tobacco Company agreed to pay out money annually to Kentucky and other states to settle lawsuits filed due to health care expenses related to smoking.

Since that settlement, Kentucky has received more than $1.7 billion in MSA payments.  Those funds have been put to great use across the Commonwealth, from early childhood development and public health programs, to supporting agriculture related programs and local infrastructure.

However, thanks to a ruling by an arbitration board, Kentucky stands to lose up to $45 million dollars early next year.  The panel ruled that the Commonwealth and five other states failed to collect payouts from smaller tobacco companies that are not part of the MSA.

According to a recent examination by the Louisville Courier-Journal, the loss of those funds could have a devastating impact on programs that receive MSA funding.  The biggest impact would be a loss of $30.6 million in debt service for water and sewer projects in tobacco producing counties.

Many health related programs would suffer setbacks if the funds are lost.  Kentucky’s smoking cessation program would lose $2 million, $3.4 million from the Lung Cancer Research Fund, and $14.6 million from Kentucky Access, which is an insurance pool established for high-risk Kentuckians.

Early childhood development programs, which play a major role in preparing children for school, will also suffer if these funds are lost.  According to the Courier-Journal, child care would lose $8.5 million, substance abuse and treatment programs would be short almost $700,000, and the immunization program could lose a quarter of a million dollars unless the ruling can be overturned.

Our federal delegation, along with Kentucky’s Attorney General, are working hard to overturn the panel’s ruling.  But the potential loss of funds couldn’t come at a worse time, as we face what many believe could be the tightest budget in the history of the Commonwealth. We in the General Assembly will do what we can to make sure Kentucky receives the full amount due under the Master Settlement Agreement in 2014.

I welcome your comments and concerns on any issues throughout the year impacting our Commonwealth.  I can be reached through the toll-free message line in Frankfort at 1-800-372-7181, or you can contact me via e-mail at [email protected]. You can keep track of committee meetings and potential legislation through the Kentucky Legislature Home Page at www.lrc.ky.gov.