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State Targets Small Cigarette Companies as Source for Cash

Facing a daunting deficit, some lawmakers plan to again target the smaller cigarette companies that didn't participate in Florida's settlement with the tobacco industry about a decade ago.

Back in 1997, Florida reached a settlement with large tobacco companies that the state contended were costing Florida money by making people sick. The settlement included companies that made most of those cigarettes – but left out a few companies with barely enough market share to be noticed. Those companies, though, particularly Miami-based Dosal, have greatly increased their share of the market since then.

And with Florida facing a deficit of some $2.7 billion, adding Dosal and other small companies to the settlement could bring in $70 million or so new dollars that when matched by Medicaid money from Washington could mean about $200 million for Florida health care programs.

“It's almost like the state of Florida is appropriating $150 million to $200 million a year to cigarette companies and in this environment it's unconscionable,” said Senate Finance and Tax Chairman Thad Altman, R-Melbourne. “We've got to fix that problem.”

A move in the Senate last year to try to add the non-settling tobacco companies to the settlement, requiring them to pay into state coffers, got bogged down in discussions over a broader tobacco surcharge that was eventually passed.

The proposal also ran into opposition from Dosal, which would be hit hard by being saddled with the same requirement as the bigger companies. Dosal argues that only the courts could add other companies to a legal settlement – not lawmakers – and that it shouldn't be forced to pay for historical bad behavior by the tobacco giants, anyway.

The reason they were left out of the settlement agreement depends on who you ask. Those who want to add the smaller companies say it was simply because their market share was too small. Dosal says that's not true at all - it didn't settle with Florida because, unlike the big tobacco companies, it wasn't accused of wrongdoing in the original lawsuit.

Regardless, Altman and a few others in the Legislature now want small companies like Dosal – which have dramatically increased their market share in the last decade – to pay into Florida's health care coffers.

“It's also a fairness issue for me,” said Altman, who said he will likely file a bill this year to try to force the companies that weren't in the settlement to begin paying. “It's fundamentally unfair to have what is now 20 percent of the market having some sort of advantage. And it undermines the entire effort of what was most important under the settlement – to curb smoking.”

Backers of the idea last year included former Attorney General Bob Butterworth – who was in office when the settlement was reached.

The move is also being pushed by the companies who did settle with Florida – who now are competing with the smaller non-settling companies.

They're no longer insignificant competitors, either.

“Today, 12 years later, you're talking about almost 20 percent of the market,” for the non-settling companies said David Sutton, a spokesman for Philip Morris USA's parent company Altria, which is lobbying for adding its competitors to Florida's settlement. “If one of the main things was to reimburse the state for health care costs related to smoking, some people are enjoying the opportunity to decide whether they're going to pay into that stream based on the brand they buy....The fee would just sort of level that paying field – to the state's benefit.”

That argument infuriates officials of Dosal, which shut down for a day last spring so its employees could trek to Tallahassee to remind lawmakers that the company's workers are voters in this state and that the company provides jobs in Miami – not unimportant when unemployment hovers above 10 percent.

“Those guys in the settlement agreement, they are paying for past wrongdoing,” said Sarah Bascom, a spokeswoman for Dosal. “It was for a host of acts of wrongdoing, it has nothing to do with the effects of smoking, it had nothing to do with the size of the market.....They're paying for things like lying to Congress, advertising to minors.... We weren't a part of that.”

2 Responses »

  1. Cigarette companies, like any other corporations, do not pay taxes. Only the consumer pays the tax, included in the cost of the product. Thus any taxing efforts are merely for revenue, the health issue is "bully pulpit" stuff and meaningless. As long as cigarettes are legal, why should they be singled out for punishment? After all the consumer makes the decision to smoke or not . If they don't understand the potential dangers, after nearly fifty years of warning, is there any possible hope of "ever"? I think not!

    Use of cigarettes, beer, big Macs or whatever should and must be the responsibility of the consumer. "Big brother" stuff is worse then the problem, assuming one exists.

    Me, in case you are wondering, never smoked the first cigarette (even as a kid) however on the other hand feel smokers or any other consumers of legal products have the "privilege" (no rights involved) to make their own decisions and of course take responsibility for the results good or bad.

  2. SECOND HAND SMOKE IS A JOKE. Ask the anti-tobacco folks to tell you what truly is in second hand smoke...when it burns from the coal its oxygenated and everything is burned and turned into water vapor..................thats right water..........you ever burned leaves in the fall...know how the heavy smoke bellows off.......thats the organic material releasing the moisture in the leaves the greener the leaves/organic material the more smoke thats made......thats why second hand smoke is classified as a class 3 irritant by osha and epa as of 2006........after that time EPA decided to change the listing of shs as a carcinogen for political reasons.......because it contained a trace amount of 6 chemicals so small even sophisticated scientific equipment can hardly detect it ........they didnt however use the normal dose makes the poison computation when they made this political decision. However osha still maintains shs/ets as an irritant only and maintains the dose makes the poison position.......as osha is in charge of indoor air quality its decisions are based on science not political agendas as epa's is. We can see this is true after a federal judge threw out the epa's study on shs as junk science......... Wednesday, March 12, 2008 British Medical Journal & WHO conclude secondhand smoke "health hazard" claims are greatly exaggerated The BMJ published report at:

    http://www.bmj.com/cgi/content/full/326/7398/1057

    concludes that "The results do not support a causal relation between environmental tobacco smoke and tobacco related mortality. The association between exposure to environmental tobacco smoke and coronary heart disease and lung cancer are considerably weaker than generally believed." What makes this study so significant is that it took place over a 39 year period, and studied the results of non-smokers who lived with smokers.....

    meaning these non-smokers were exposed to secondhand smoke up to 24 hours per day; 365 days per year for 39 years. And there was still no relation between environmental tobacco smoke and tobacco related mortality. In light of the damage to business, jobs, and the economy from smoking bans the BMJ report should be revisited by lawmakers as a reference tool and justification to repeal the now unnecessary and very damaging smoking ban laws. Also significant is the World Health Organization (WHO) study:

    Passive smoking doesn't cause cancer-official By Victoria Macdonald, Health Correspondent " The results are consistent with their being no additional risk for a person living or working with a smoker and could be consistent with passive smoke having a protective effect against lung cancer. The summary, seen by The Telegraph, also states: 'There was no association between lung cancer risk and ETS exposure during childhood.' " And if lawmakers need additional real world data to further highlight the need to eliminate these onerous and arbitrary laws, air quality testing by Johns Hopkins University proves that secondhand smoke is up to 25,000 times SAFER than occupational (OSHA) workplace regulations.

    The Chemistry of Secondary Smoke About 94% of secondary smoke is composed of water vapor and ordinary air with a slight excess of carbon dioxide. Another 3 % is carbon monoxide. The last 3 % contains the rest of the 4,000 or so chemicals supposedly to be found in smoke… but found, obviously, in very small quantities if at all.This is because most of the assumed chemicals have never actually been found in secondhand smoke. (1989 Report of the Surgeon General p. 80). Most of these chemicals can only be found in quantities measured in nanograms, picograms and femtograms. Many cannot even be detected in these amounts: their presence is simply theorized rather than measured. To bring those quantities into a real world perspective, take a saltshaker and shake out a few grains of salt. A single grain of that salt will weigh in the ballpark of 100 million picograms! (Allen Blackman. Chemistry Magazine 10/08/01). - (Excerpted from "Dissecting Antismokers' Brains" with permission of the author.)

    The Myth of the Smoking Ban ‘Miracle’ Restrictions on smoking around the world are claimed to have had a dramatic effect on heart attack rates. It's not true. http://www.spiked-online.com/index.php/site/article/7451/

    As for secondhand smoke in the air, OSHA has stated outright that: "Field studies of environmental tobacco smoke indicate that under normal conditions, the components in tobacco smoke are diluted below existing Permissible Exposure Levels (PELS.) as referenced in the Air Contaminant Standard (29 CFR 1910.1000)...It would be very rare to find a workplace with so much smoking that any individual PEL would be exceeded." -Letter From Greg Watchman, Acting Sec'y, OSHA, To Leroy J Pletten, PHD, July 8, 1997
    -harleyrider1978