Guinn says drop in tobacco revenue won’t hurt programs

Tuesday, Dec. 7, 1999 | 10:27 a.m.

CARSON CITY -- Gov. Kenny Guinn said Monday possible reduced payments from the national tobacco settlement should not cripple his Millennium Scholarships program or the health initiatives proposed for next year, many of which are aimed at senior citizens.

Guinn said there should be enough money coming into the state, even with smaller allotments, to take care of the new programs that were created earlier this year.

Senior Deputy Attorney General Anne Cathcart, who is monitoring the Nevada collections, said she has heard rumors that the payments may be reduced anywhere from 8 to 14 percent. But she said those are only rumors.

Nevada was originally scheduled to receive $39.1 million next year. The amount the tobacco companies will pay is based on sales in this calendar year. There have been national reports that cigarette sales have dropped, meaning a decrease in allocations to the states. The cigarette companies have given their sales figures to an independent auditor, but Cathcart said the states haven't had a chance to examine them.

"The states will be taking their own look at their (manufacturers') figures to determine if we agree with them," Cathcart said.

Nevada should receive $14 million around Dec. 14, she said. That money is independent of the yearly payments due the states.

"Our office has consistently encouraged caution in depending on this money or a particular portion," she said.

Guinn and Cathcart said if there is reduced payments, then that is accomplishing one of the goals -- to reduce smoking.

"The rationale is to encourage the tobacco companies to want to reduce consumption or there is no financial incentive to support the goal of cutting back on tobacco use," Cathcart said.

Under the distribution formula approved by the Legislature, the first $2 million will go to the public television stations in Las Vegas and Reno to convert to digital broadcasting. But the stations must put up $3 in matching funds for each dollar received from the tobacco settlement, which means they may not spend all of the $2 million in the first year.

In return, the stations must prepare messages on the hazards of using tobacco that will be broadcast 30,000 times over a 10-year period.

The second $5 million is to be used by the University of Nevada School of Medicine to prepare for a program in Las Vegas to provide health care for the elderly, rural residents and the disadvantaged.

Out of the remaining money, Cathcart said, 40 percent will go into the Millennium Scholarship program. Even if the $39.1 million is reduced by 14 percent, there would still be $13 million for the scholarship program.

After the 40 percent goes for scholarships, 10 percent will be set aside in a trust fund with the interest being used for public health care programs.

Cathcart says the remaining 50 percent will go to the Healthy Nevada program. But off the top of that apportionment comes $5 million for housing for the disabled in Clark County and $1 million to the university system for rural health care and technology.

After that $6 million is allocated, 30 percent of the remaining Healthy Nevada funds must be used to help offset the cost of prescription drugs for senior citizens. Another 30 percent is ticketed to help the elderly with independent living, such as home care and transportation; 20 percent for programs to prevent and reduce tobacco use and to treat those with tobacco related illnesses and 20 percent to improve health services for children and the disabled.