Nevada gets $15 million in tobacco settlement funds

CARSON CITY - Nevada got a $15 million downpayment Tuesday on what's supposed to be nearly $1.2 billion due over 25 years as a result of a national settlement with tobacco companies.

But it's unclear whether future payments, including $39.1 million next year, will come through as expected. Attorney General Frankie Sue Del Papa says payments in 2000 could shrink as much as 14 percent.

The amount the tobacco companies will pay is based on sales. There have been national reports that cigarette sales have dropped, meaning a decrease in allocations to the states.

Gov. Kenny Guinn says any reductions shouldn't harm his Millennium Scholarships program or health initiatives. He said there should be enough money coming into the state, even with smaller allotments, to take care of the new programs that were created earlier this year.

Del Papa adds that any reductions could be offset by money coming in from cigarette companies that signed the agreement after it was first announced.

Del Papa also said lower sales mean less smoking, and that could save money because it may not cost the state as much in Medicaid funds to treat people with tobacco-related diseases.

Under a distribution formula approved by the 1999 Legislature, the first $2 million in settlement funds goes to public television stations in Las Vegas and Reno to convert to digital broadcasting. But the stations must put up $3 in matching funds for each $1 received from the tobacco settlement.

In return, the stations must prepare messages on the hazards of using tobacco that will be broadcast thousands of times over a 10-year period.

The second $5 million is to be used by the University of Nevada School of Medicine for a program in Las Vegas to provide health care for the elderly, rural residents and the disadvantaged.

Out of the remaining money, 40 percent goes to Guinn's Millennium Scholarships program. Even if the $39.1 million is reduced by 14 percent, there would still be $13 million for scholarships.

Another 10 percent goes into a trust fund, with the interest being used for public health care programs.

The remaining 50 percent will go to the Healthy Nevada program. But off the top, $5 million is for housing for the disabled in Clark County and $1 million to the university system for rural health care and technology.

The Healthy Nevada funds must be used to help offset the cost of prescription drugs for senior citizens and help the elderly with independent living, such as home care and transportation.

Also, the funds will go to programs to prevent and reduce tobacco use and to treat those with tobacco-related illnesses; and to improve health services for children and the disabled.