At Signing Ceremony, Gov. Johanns Says Historic Tobacco Fund Distribution Will Impact Countless Nebraskans

Governor Mike Johanns re-enacted the signing of legislative bill (LB)

692 on Thursday morning at the Durham Outpatient Center at the University

of Nebraska Medical Center in Omaha.  Nebraskans representing each

of the designated beneficiaries of the states proceeds from the national

tobacco settlement participated in the event.  LB 692 authorizes the

distribution of approximately $50 million annually for health related programs

and services across Nebraska.

This legislation is of historic importance for the entire State of

Nebraska, said Governor Johanns.  Never before have we had an opportunity

to do something so meaningful and so sweeping in scope that will have such

a real and lasting impact on the health of so many Nebraskans for so many

years to come.

Under LB 692, the tobacco settlement proceeds will be allocated to behavioral

health services including mental health and substance abuse treatment,

juvenile services, minority health, developmental disabilities, respite

care, biomedical research, and public health.  Representatives of

each of the seven areas spoke at the signing ceremony.

Nebraska was among a group of 46 states that agreed to a $246 billion

dollar settlement with the tobacco industry.  The 1998 settlement

was a result of the states efforts to recoup money spent to care for ill

smokers.  Nebraskas share of the settlement is about $1.2 billion

over a 25-year period.

In 1998, the state Legislature approved a plan distributing Nebraskas

tobacco settlement funds to health care needs through a competitive grant

process.  The Legislature amended its plans for distributing the

funds in 2000 by allocating $21 million over three years for tobacco use

prevention and cessation efforts.  However, in 2001, Governor Johanns

and legislative leaders including the Speaker of the Legislature, Sen.

Doug Kristensen of Minden, proposed a dramatically different approach.

Instead of spending the funds as the state received them or spending

only the interest on those funds, a plan to allocate $50 million annually

to designated health care needs was developed.  The $50 million would

be a combination of principal and interest from Nebraskas share of the

tobacco settlement.  As payments from the settlement were received,

they would be deposited in a Health Care Trust Fund.  The principal

of the fund would grow over time causing an increasingly larger share of

the annual distribution of proceeds to be interest.

The question was how would the $50 million be distributed.  Many

senators were involved in crafting the eventual compromise with the Governor

including Speaker Kristensen, Sen. Jim Jensen of Omaha chairman of the

Health and Human Services Committee, Sen. Roger Wehrbein of Plattsmouth

chairman of the Appropriations Committee, the vice chairs of the two

committees, Sen. Dennis Byars of Beatrice and Sen. Don Pederson of North

Platte, respectively, and other members of these two key committees as

well as other legislators.

The allocation of funds for the current fiscal year (FY 2002):

$10 million for biomedical research at UNMC, Creighton, UNL, and Boys

Town National Research Hospital (increasing to $14 million annually by

FY 2006)

$2.8 million for minority public health services

$9.9 million in FY 02 and $10.1 million in FY 03 for behavioral health

provider rate increases

$1.5 million for emergency protective care

$7.5 million for mental health and substance abuse capacity, including

$1 million each of the next two years for children served by the Office

of Juvenile Services

$5.7 million for county health departments for public health services,

planning infrastructure and development

$3 million in FY 02 and $5 million in FY 03 for individuals with developmental

disabilities on the waiting list for services

$1,060,000 for the respite care program

$5 million for health care grants awarded by the Nebraska Health Care

Council including $700,000 designated for grants to improve racial and

minority health

 

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