Most tobacco funds filtered into economy

By Sarah Arkin

Published: November 29, 2008

Since its inception a decade ago, money from the federal tobacco settlement has been funneled into more than a thousand grants throughout the commonwealth, and state officials agree it’s been well spent.

When the settlement was reached in 1998, the main intent was to channel the money into smoking prevention and cessation campaigns, particularly targeted at children.

As important as health issues were to address, legislators in the Virginia General Assembly agreed that stepping in to help cultivate new models of economic development was equally crucial. The General Assembly created two subcommittees to split the money: one to focus on health initiatives and one to focus on the public health side.

The settlement outlined a plan that would provide more than $206 billion over 25 years. Virginia gets between $130 and 135 million per year, based on the cigarette sales of tobacco companies participating in the settlement.

Half of that money goes to the Virginia Tobacco Indemnification and Community Revitalization Commission, 10 percent goes to the Tobacco Settlement Foundation and 40 percent goes to the state’s general fund for health care.

Some of the money has gone directly into smoking prevention campaigns, Kay Crane, director of Piedmont Access to Health Services, said, including student education projects done in conjunction with the American Cancer Society.

Good health care and economic development are inextricably linked, Tim Pfau, director of the grants program for the Tobacco Commission, said. A number of grants the commission has awarded help blend the two, he said.

“It’s a subset of economic revitalization strategies for the region,” Pfau said of increasing access to “If you’re trying to help bring companies that create jobs,” he said, there has to be a way of maintaining a healthy work force.

One project has been “telemedicine,” which aims to “increase the availability of state-of-the-art care and diagnostics in the tobacco region,” Pfau said.

Someone can have X-rays taken at a local clinic and have them examined by technicians at the University of Virginia or Virginia Commonwealth University.

Pfau said two projects in the past six months have partnered with the National Cancer Institutes in Virginia — one at U.Va. and one at VCU.

The Tobacco Commission awarded $1 million to each of those institutions to extend their reach into the tobacco region.

Tobacco region residents will be eligible to participate in clinical trials and “take part in some really cutting edge cancer treatments,” Pfau said.

The Virginia Tobacco Settlement Foundation, focused directly on smoking education, also has been hard at work. This year, it has spent $3.6 million on community programs targeting smoking prevention in youth, according to its Web site.

Locally, Danville-Pittsylvania Community Services received a three-year grant of close to $165,000 for its tobacco youth prevention campaign.

However, the vast majority of tobacco settlement funds have been spent on economic development.

Recent projects that have at least been partially funded by money from the Tobacco Commission include the U.S. 58 waterline project, Luna Technologies and the Institute for Advanced Learning & Research.

“We did ours right,” former state Sen. Charles Hawkins, chairman of the Tobacco Commission, said.

“All of our base industries all but disappeared overnight,” he said, “from tobacco to furniture to textiles … tobacco was a cash asset that just disappeared.”

Hawkins said telecommunications initiatives and the Institute have been the backbone of economic development initiatives in the area.

“With the almost total collapse of our economies, if we hadn’t had access to capital to rebuild, we would have never gotten out,” he said.

Contact Sarah Arkin at or (434) 791-7983.