In 1998 Texas settled a lawsuit with the four largest tobacco companies and came away with $15 billion to be paid out over 25 years and another $2.3 billion for counties and hospital districts. Harris County receives yearly payouts between $4 million and $18 million a year. All of the money goes to the Harris County Hospital District. King Hillier with the HCHD says the amount fluctuates based on a formula that factors in market rates and uncompensated healthcare costs.
HCHD has an annual budget of $760 million, so Hillier says the tobacco settlement funds are quite important to their operations. The county money is going directly to public health care and some anti-tobacco programs. But the state's settlement money is spent on various efforts and most of it sits in permanent trust accounts and can't be touched.
There's no law for how the money has to be used. But Bill Corr the Executive Director of the Campaign for Tobacco-Free Kids says a 1999 law designated $200 million toward a tobacco prevention pilot program, but through the course of the legislative session that money was put into a permanent endowment which permits only the interest generated to be spent.
Corr says Texas ranks 40th in dollars spent on tobacco prevention. Efforts were made to confirm these numbers. The Texas Attorney General's office refused to comment on the story. The Texas Comptroller also was unavailable for comment and the governor's office did not return calls requesting information.