State legislatures are now just beginning to address the question of how to spend the windfall they received from the November 23, 1998, agreement with major tobacco companies. The settlement was intended to cover past Medicaid costs from smoking- related illnesses in exchange for immunity for the tobacco companies from further state- sponsored lawsuits. As states await the first of 25 annual installment payments, competing interests and skepticism over current antismoking programs are causing lawmakers to consider spending the money on programs other than smoking prevention.

"Common sense dictates that because they are receiving this money because of Medicaid costs related to smoking, they would spend the money on reducing smoking," said Peter Fisher, manager of state issues for the Campaign for Tobacco-Free Kids. "But reality doesn't necessarily follow common sense."

Massachusetts Gov. Paul Cellucci refuses to set aside any money from his state's $7.6 billion share for smoking cessation and prevention programs. While Gov. Cellucci supports a plan to use the money for AIDS programs, AIDS testing for the uninsured, and other health programs, he steadfastly resists spending money on the Department of Public Health's tobacco control program. In addition, he has set aside $500,000 to study the program's effectiveness.

Gov. Gray Davis of California has married his state's share, about $1 billion per year over the next 25 years, to the state's general fund. In effect, he will leave it up to state and local politicians to decide how to spend the money. That means local governments can spend the money to build new schools and roads, but there is no requirement for them to spend money on local public health programs, including smoking prevention.

In Hawaii, Gov. Benjamin Cayetano proposed spending half of the state's $1.13 billion share on tobacco prevention programs. He floated the idea of creating a Tobacco Settlement Trust Fund that would pay for antismoking initiatives, education, and children's programs. The remainder would be placed in a "rainy day fund" to be used in times of fiscal crisis.

"The Tobacco Settlement Trust Fund will be used to educate the public in the hazards of smoking, and it will be a symbol of our commitment to promoting good health for the people of Hawaii," said Gov. Cayetano.

Washington Gov. Gary Locke proposed spending $150 million of the state's $323 million initial payment on a tobacco prevention trust fund. Like similar endowment proposals, the fund will be perpetuated by the interest it earns. Locke's plan also calls for the trust fund to be replenished by future payments. In the remaining 24 years, Washington will receive payments averaging $149 million a year, totaling $4.02 billion. "Our goal is to make the current generation of smokers in Washington, the last generation of smokers," Locke said.

The bulk of Washington's share will be used to pay for the state's Basic Health Plan, which provides health insurance to low-income working families who otherwise could not afford health insurance, and to expand health care coverage for children.

In Vermont, Gov. Howard Dean told state lawmakers he also wants to set up a trust fund to pay for antismoking education aimed at young people. "I propose that we set up a special trust fund and that the money be spent to educate Vermonters, particularly young Vermonters, about the extraordinary dangers of smoking," said Dean. "Tobacco is an addictive drug that claims the lives of nearly 1,000 of us in Vermont each year. We need to use this money to make it as difficult as possible, and as unattractive as possible, for Vermonters to get caught in this addiction."

If the Senate bill is approved by the House of Representatives and signed by President Clinton, states would be free to spend all their money on a myriad of issues, such as tax relief, health care coverage for the uninsured, or new schools.

While most anti-tobacco groups support legislation that would give states the entire settlement amount, they hoped Congress would require 20% of the federal portion be used for smoking prevention programs.

US Surgeon General David Satcher has also encouraged states to use the settlement money to help millions of smokers quit and prevent legions of children from ever smoking. "The courts cases were not about money, but about health , the health of generations of Americans, young and old, whose lives are threatened by tobacco addiction," Satcher said during a National Cancer Institute conference in March. "At a time when states are being asked to choose between school construction, tax cuts and health care, I would suggest that there can be no greater priority to public health, community health, or family health than assuring a robust and comprehensive tobacco control program in every state."