SMOKING IRONY
Once celebrated tobacco money is now a problem
BY LEWIS WHITTEN

A drop in cigarette smoking could be bad for the livelihood of elderly Nevadans. Cigarette sales have hit a 55-year low. And with Nevada funding so many programs on cigarette money, those programs are about to see a drop in funding thanks to tougher laws that have succeeded in reducing smoking rates. 

Nevada may be out $7 million in expected tobacco settlement dollars. If that happens, many welfare programs for the elderly and disabled will be clamoring for cash. 

One such program, called Helping Hands, gets 99 percent of its budget from tobacco settlement money. This organization could be shut down and the elderly and disabled folks they cater to would be forced to rely on the charity of friends, family and neighbors to take them to their day-to-day appointments.

The state's Division of Aging Services is another government branch that would suffer. One-third of their budget comes from the tobacco-settlement fund.

Back in 2001 when the state was allocated tobacco settlement money, officials were aware that funding levels might fluctuate, but created the programs anyway. They even informed those organizations that funding might go away.

Now lawmakers are trying to come up with quick-fix measures to keep those programs funded, at least until the next legislative session in 2007. Sen. Bob Beers, R-Las Vegas, suggested transferring funds from other budget-rich government branches. Sen. Dina Titus, D-Las Vegas, believes the $7 million could come from a state reserve. 

Using the Rainy Day Fund though, is not an option. Nevada's Department of Administration keeps an eye on the budget. The department's director, Andrew Clinger, told the Las Vegas Business Press that Nevada's Rainy Day Fund cannot be used for this situation. That fund is there to supplement the budget when taxes are low. Currently, tax collections are at an all-time high.

"Sales tax, as of February, was up $32 million above what was projected in the May economic forum," Clinger said. "The main gaming tax was about $24 million ahead and real property transfers taxes were about $18 million ahead."

The Millennium Trust Fund scholarships receive 40 percent of the tobacco money. That program is also experiencing shortfalls in funding, but currently is not in jeopardy. The 2005 legislative session kept that program afloat with $35 million from the state's general fund. However, if the amount of tobacco settlement money Nevada receives continues to decline, the Millennium Trust Fund will experience even larger shortfalls.

In the short term, it's Nevada's elderly and disabled programs that are at risk of experiencing huge budget cuts. Ironically, the celebrated tobacco settlement money is now a monkey on the back of Nevada. LW