Tobacco Buyout May Find its Way to Maine

Source from:  By BART JANSEN, Portland Press Herald Writer 06/23/2004

Maine may not be a tobacco-growing state, but 36 people or groups statewide stand to gain nearly $290,000 from a federal tobacco buyout the House has approved, according to a study released today by an environmental advocacy group. The buyout, which was added to tax legislation to increase support for the unrelated bill, must still be considered by the Senate. The Senate legislation has some opponents because it proposes coupling a tobacco buyout with a plan to have the federal Food and Drug Administration regulate tobacco products. The House's tobacco provision would pay $9.6 billion nationwide over five years to 443,000 recipients, according to an analysis by the Environmental Working Group, which opposes the legislation. The idea is to wean growers, who hold federal licenses that carry federal subsidies, from the crop. But the provision would create 462 millionaires, as the top 10 percent of recipients collect two-thirds of the money, according to the group. The calculation was made by analyzing the federal Department of Agriculture's list of tobacco quota holders. "I think it's unfair. I don't think taxpayers are obligated to buy out this entitlement program," said Ken Cook, the group's president. "I think we should make cigarette companies pay for it, if we're going to do it at all." Predictably, states with the most recipients are North Carolina, Kentucky and Tennessee. But because the quotas, which were begun during the Depression, have been sold, leased or handed down through generations, the Environmental Working Group found that Mainers would receive $289,155 over five years, beginning in 2005. Erla Shocklee of Turner said she wasn't familiar with the buyout proposal because she leases out her quota for 150 acres in Kentucky. Her share of the buyout would be $16,369 over five years, according to Environmental Working Group. "We always leased it out - somebody did it for us," said Shocklee, whose late husband was from Kentucky. "You have a tobacco quota when you live down there." But she said she would consider a buyout, if approved, because of the difficulties farming tobacco. "That's what everybody's doing," she said. "They're trying to take it away from you anyway - might as well pay you for it." Robert Shelton of Winthrop also was unfamiliar with the buyout because he hires an overseer to farm the Virginia land that has been in his family for five generations. Shelton, his brother Tieche and a trust for their late father would collectively receive $40,364, according to Environmental Working Group. "I don't know anything about it," Shelton said. "We don't grow it here in Maine and we don't approve what it does and we've got a guy who does it." House leaders added the tobacco-buyout to a bill that aims to change the tax on exporters to remedy a complaint from the European Union that the government unfairly favors its manufacturers. The bill was approved Thursday on a vote of 251-178. Opponents included Maine's two Democrats, Reps. Tom Allen and Mike Michaud. Critics complained about numerous provisions added to the legislation, causing its price to balloon from $50 billion to $155 billion. Critics contend the tobacco buyout was added to attract votes of Democrats from tobacco-growing states. Because the money would come from the federal excise tax on tobacco, which is 39 cents for each pack of cigarettes, critics contend it will drain the federal treasury and add to the deficit. "It's hard for me to believe that subsidies for tobacco farmers should be a priority," Allen said. "It seems like $10 billion we could avoid spending." Attention now shifts to the conference between the House and Senate that must reconcile differences between the tax bills. The Senate earlier approved a tax bill without a tobacco provision, and continue to argue that a buyout should be considered separately. In fact, bipartisan legislation from Sens. Mike DeWine, R-Ohio, and Edward Kennedy, D-Mass., calls for FDA regulation in exchange for a buyout. Philip Morris USA, a leading cigarette maker, supports FDA regulation as a way to provide greater consistency in federal policy and more predictability for the industry. A spokeswoman for Sen. Susan Collins, R-Maine and a cosponsor of the tobacco bill, said she would voice concerns about the House version to Senate leadership. "She believes that any legislation addressing tobacco buyouts should also address expansion of FDA authority to regulate tobacco," said spokeswoman Jen Burita. Enditem