10th anniversary of tobacco settlement passed with little fanfare
It didn’t receive a lot of fanfare, but late last month marked the 10th anniversary of the $206 billion dollar settlement between the states and the major tobacco companies.
As many of you may know, Kentucky chose an innovative path for its portion of the money. In 2000, the General Assembly set aside half for agriculture and half for programs to help our youngest and sickest citizens.
Farmers began seeing the fruits of this plan about eight years ago, and according to a University of Kentucky study released this fall on the settlement, the long-term return has more than met expectations.
Proof of that came early this month, when we learned that Kentucky’s farm receipts – expected to reach $4.7 billion in 2008 – will set another record high. It’s a third more than farmers made in 2001.
Farming’s portion of the tobacco settlement has gone to several broad areas: Large projects like Hopkinsville’s ethanol plant; county-level programs that provide cost-sharing money to help farmers with such things as fencing, hay production and cattle; and loan programs for farmers needing financial capital to strengthen their business.
According to the UK study, 64 projects received at least $100,000 between 2001 and 2006, and the return on investment was nearly two-to-one. The county cost-sharing programs, meanwhile, provided nearly $100 million to more than 72,000 farmers during that time.
The study found that more than 500 new products have been created by agricultural entrepreneurs, ranging from industrial glue to private-label food products. Many of those undoubtedly qualify for the “Kentucky Proud” program, which lets consumers know what products are made entirely in the Commonwealth. The study called it “one of the most successful” state-branding initiatives in the country.
Last month, the Kentucky Agricultural Development Board gave the program $3.3 million to build on its success. An agricultural leadership program got $1 million, and $5 million went to the loan program for farmers. Altogether, the board has given $279 million in tobacco settlement money to nearly 3,400 proposals since 2001.
Under the rules of the settlement, the money from the tobacco companies will continue for at least another 15 years, and possibly even longer if both sides reach an agreement. While other states have used their settlement money to cover short-term financial problems, Kentucky stands out for investing in programs that will truly last for the long run.
Speaking of financial problems, Governor Steve Beshear unveiled his proposal last Thursday to tackle the nearly half-billion dollar deficit that state government must resolve by the end of June. It will now be up to the General Assembly to weigh his plan’s merits during the 2009 Regular Session and see what course of action we should take.
Your input in this process is critical to what we ultimately do. If you have any suggestions, or any comments about the governor’s plan, please let me know. My address is Room 351C, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601.
You can also leave a message for me or for any legislator at 800-372-7181. For the deaf or hard of hearing, the number is 800-896-0305.
I hope to hear from you soon.
Representative Rick Rand