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Post date: February 4 1999

Spitzer Blasts Washington's Attempt To Take Part Of Tobacco Money From State And Local Governments

Saying that the federal government "should keep its hands out of the pockets of New York State, its local governments and its taxpayers," Attorney General Spitzer is condemning a plan by Washington to claim a share of the state's tobacco settlement monies.

As part of a $206 billion national settlement with the tobacco companies negotiated by Attorneys General representing 46 states, New York is to receive approximately $25 billion over the next 25 years.

Under the Consent Decree in the New York State lawsuit, the state will receive approximately 51% of the money, New York City is to receive about 27%, and the remaining 22% is to be divided among the 57 other counties across the state. New York City, Westchester County and Erie County have filed appeals objecting to the settlement agreement.

The President's proposed 2000 budget would withhold $16 billion from federal Medicaid payments to states over the next five years.

"Washington should keep its hands out of the pockets of New York state, its local governments and its taxpayers," said Spitzer.

"We sued on behalf of the states and its local governments. The State undertook all the expense and risk of this litigation, and achieved a settlement without any assistance from the federal government. Washington played no role in our lawsuit against the tobacco industry, and I'm outraged that it is now trying to take a significant portion of the funds that we've recovered on our own on behalf of our taxpayers."

Spitzer expressed strong support for legislation pending in Congress that would prevent the federal government from recouping any portion of the tobacco settlement payments that are scheduled to be made to the states.

Senator Bob Graham (D-Florida) and Senator Kay Bailey Hutchinson (R-Texas) are introducing a bill on the issue in the Senate, and Congressman Michael Bilirakis (R-Florida) has similar legislation pending in the House.

"My office has been in touch with the New York House delegation, as well as the offices of Senator Moynihan and Senator Schumer on this important issue," said Spitzer. "This is a national issue that will affect payments scheduled to be made to states throughout the country, and the best way to resolve it is through national legislation. I am urging New York's congressional delegation to support these bills and protect state taxpayers."

In his State of the Union address, the President announced that the federal government would sue the tobacco industry to recover the federal government's smoking-related costs. "I fully support the President's initiative and stand ready to provide any assistance that he needs in that litigation," said Spitzer.

"In addition, I support the President's health care-related initiatives, such as giving the FDA authority over tobacco-related products. But I cannot, and will not support the federal government's efforts to confiscate a portion of the funds that the state worked so hard to obtain from the tobacco companies. If need be, I will challenge Washington's efforts in court. I am going to do all I can to prevent this attempted money grab by the federal government."

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