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American Legacy Foundation® Encouraged by Decision to Free-Up $10 Million in Tobacco Funds, Continue Life-Saving Programs

6/24/2008

Washington, D.C. – Judge David Fais of the Franklin County Court of Common Pleas today signed an order allowing $10 million of the frozen funds previously earmarked for tobacco prevention and cessation services in the state to continue being spent throughout 2008 and 2009.

This order comes as a result of a joint motion filed by the American Legacy Foundation and the Ohio Department of Health (ODH) as well as the other state defendants, asking that the funds be freed up to maintain basic tobacco control programs in Ohio. Four million dollars would be spent to satisfy obligations incurred through June 30 and $6 million would be spent for tobacco control in the fiscal year beginning on July 1.

“ODH’s decision to seek permission to spend these funds is a step in the right direction, as the agency recognizes the critical need for continued funding of these life-saving services,” said Dr. Cheryl Healton, president and CEO of the American Legacy Foundation. “If we prevail in our legal claims, we will assure that far more funds are spent on life-saving tobacco control programs in Ohio.”

Ohio recently passed legislation seeking to eliminate the Ohio Tobacco Prevention Foundation (OTPF) and liquidate its endowment fund. As a result of a legal challenge brought by the OTPF, in which the American Legacy Foundation has intervened, the court has frozen the endowment funds. ODH sent notices to grant recipients about two weeks ago informing them that their grants would be cancelled as of July 1, 2008, claiming that it was taking this action because of the freeze. Legacy immediately notified ODH that Legacy had joined with OTPF in late April to successfully ask the court for permission to spend $5 million to satisfy outstanding obligations and would like to join now with ODH to seek permission to spend additional funds on tobacco control in Ohio.

As soon as executives at the American Legacy Foundation learned that the state had notified grantees that their funding would cease effective June 30, Foundation representatives contacted the ODH to discuss a plan to present to the court to continue funding state tobacco control programs until a decision is made in the case. While the $6 million designated for the fiscal year beginning on July 1 is not nearly enough to continue these programs at their current level, $2 million is designated for grants for prevention and cessation services and another $2 million has been earmarked for the state telephone Quitline.

The American Legacy Foundation intervened in this litigation to ask the court to declare valid the $190 million contract the Ohio Tobacco Prevention Foundation courageously entered into with Legacy to assure that the work of tobacco control in Ohio would continue. After three days of testimony on Legacy’s motion for a preliminary injunction, the court asked the parties to make written submissions by June 27, 2008. The court also ruled that the freeze currently in effect will continue until a ruling on the preliminary injunction.

While Legacy did not ask for these funds, the Foundation is proud to fight to secure them in order to continue doing life saving work in the state. If this legal claim is successful, the Foundation has committed to use these funds in Ohio for the benefit of Ohioans.

During its existence, the OTPF made great strides in reducing tobacco use in the state. In 2001, Ohio’s adult smoking rate was 27.6 percent, significantly above the national average of 22.8 percent at the time. The Ohio smoking rate has now dropped to 22.4%, much closer to the national average of 20.8 percent. It is no coincidence that OTPF’s comprehensive prevention and cessation programs were fully engaged during those years. Public education efforts have been shown to markedly reduce smoking prevalence. Smoking rates rise when campaigns stop.

The American Legacy Foundation^® is dedicated to building a world where young people reject tobacco and anyone can quit. Located in Washington, D.C., the foundation develops programs that address the health effects of tobacco use, especially among vulnerable populations disproportionately affected by the toll of tobacco, through grants, technical assistance and training, partnerships, youth activism, and counter-marketing and grassroots marketing campaigns. The foundation’s programs include truth^®, a national youth smoking prevention campaign that has been cited as contributing to significant declines in youth smoking; EX^®, an innovative public health program designed to speak to smokers in their own language and change the way they approach quitting; research initiatives exploring the causes, consequences and approaches to reducing tobacco use; and a nationally-renowned program of outreach to priority populations. The American Legacy Foundation was created as a result of the November 1998 Master Settlement Agreement (MSA) reached between attorneys general from 46 states, five U.S. territories and the tobacco industry. Visit http://www.americanlegacy.org/.

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Contact: Kim Collins - GolinHarris for The American Legacy Foundation, 904-280-2773, kcollins@golinharris.com