Colorado Treasurer Calls 1998 Tobacco Settlement Unconstitutional
By Matt Green
Published on September 28, 2005
In a recent column in the Wall Street Journal, Hillman calls the agreement unconstitutional because it set up a system to collect taxes without legislative authority.
His viewpoint clashes with Colorado government officials, who say the agreement helps the state pay for rising health care costs.
The settlement requires major tobacco companies to pay $206 billion to 46 states. In return, the states dropped lawsuits seeking reimbursement for smoking-related health costs.
Hillman said he agrees with lawsuits trying to dismantle the agreement. In these lawsuits, business groups and small tobacco companies argue that the agreement makes it more difficult for smaller companies to compete and keeps cigarette prices artificially high. Lawsuits have been filed in:
- Arkansas
- Kentucky
- Louisiana
- New York
- Oklahoma
- Tennessee
Many state government officials, including those in Colorado, contend losing tobacco money would leave huge gaps in the state budget. They've said the settlement helps cover the high cost of treating smoking-related illnesses and running quit-smoking programs.
Since 1998, Colorado has collected $572 million under the settlement, including $87 million this year. Colorado has used its share for Medicaid and other programs.
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