Friday, March 31, 2000
Lawmakers wait to slice Ky.'s tobacco money pie
BY MARK R. CHELLGREN
The Associated Press
FRANKFORT Negotiations over how to divide Kentucky's portion of the national tobacco settlement among farmers, and whether to regulate contract growing of burley, have been put off until after budget talks are over in the General Assembly.
The House and Senate members assigned to work out the tobacco matters agreed Thursday to wait until next Wednesday to resume talks. Rep. Roger Thomas, D-Bowling Green, said many members of the tobacco conference are also on the budget negotiation teams.
We can't resolve anything with these budget things going on, Mr. Thomas said.
The differences between the House and Senate positions on tobacco money are stark.
The Senate, with the backing of Gov. Paul Patton and many of the traditional farm groups, wants a state board to apportion the money with emphasis on broad projects to improve research, markets for all farm products and environmental and financial aid.
The House earmarked two-thirds of the money among individual counties based on their own reliance on tobacco as part of their economies. A state board would apportion the other third.
The stakes are great. The state could get more than $3 billion over the next 25 years from cigarette manufacturers. The money is from a settlement the companies made with the states to compensate them for the health-related costs of smoking.
Kentucky has already earmarked half of the money for agriculture, but the questions are how to divide that segment. The other half, including money already received, will be scattered among health care initiatives, such as creation of a health insurance pool; early childhood development; and endowed chairs at universities.
The Senate and the House have already agreed to use $40 million of the money received this year to augment a second round of settlement funds to growers who have lost income because of declining purchases by manufacturers.
The first distribution was made early this year, but the second round of payments is expected to be lower. The $40 million would get the payments up to the first round levels.
The House, though, would underwrite the payments each year. The Senate would do it only for this year.
Tobacco lobbying groups also want the state to regulate a new approach by cigarette companies to buy burley directly from farmers, bypassing the traditional auction method. Tobacco growers fear the practice of contracting for production would hurt growers with small tobacco allotments.
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