Less money on way from tobacco fund

Idaho programs funded by interest from federal tobacco settlement money can expect lean times next year because the state has already used much of the cash to plug holes in its budget.

Money paid into Idaho’s so-called Millennium Fund has gone from $70 million in 2002 to $21.4 million after an economic slump and income tax cuts left Idaho’s budget with a shortfall. With less money left in the fund, it’s earned less interest.

As a result, Idaho’s Joint Millennium Fund Committee, which oversees how the interest money is divvied up every year to an array of tobacco-prevention related programs, has just $681,000 to give out in 2006, much less than the $1.9 million to $3.5 million it has given out every year since 2001.

At least some of the 14 programs that have requested about $2.8 million for that fiscal year could come up empty.

“This year is the first year where the effects showed up,” said Rep. Jim Clark, R-Hayden Lake, a member of the committee.

“We only have about a third of what we would normally have (in interest).”

Of Idaho programs that have requested interest money in 2006, officials say there are several which are almost guaranteed funding.

They include the Health and Welfare tobacco counter-marketing request for $500,000 and the Idaho State Police Youth Tobacco investigations for $94,000 – leaving just less than $100,000 for the rest of the programs that requested funding unless the committee agrees to tap into principal.

Other projects that have been funded in the past, including the statewide effort to promote quitting smoking that’s asked for $500,000, would put the grant requests over the amount of fund interest.

Clark said the committee, which votes next month on the requests, could opt to use principal.

“If we do that, we would probably fund somewhere around $2.3 million,” Clark said. “We won’t fund them all.”

The Millennium Fund comes from annual payments of $20 million to $24 million from the 1998 settlement of a lawsuit against tobacco companies. For fiscal year 2005, the state is expecting about $23.8 million.

It would take several years of banking the tobacco windfall to amass an amount that would earn enough interest to return funding for grant programs to historical levels, said David Hahn, a financial management analyst for the state Division of Financial Management in Boise.

But there’s no guarantee that state legislators won’t again divert tobacco settlement money elsewhere.