Alarge and looming loophole in Florida’s tobacco policy is a goose that’s laying golden eggs for the newest member of the Big Tobacco club: Dosal Tobacco. And while Dosal plays politics to protect its golden goose, Florida’s taxpayers are paying the bill for Big Tobacco’s free lunch.
In 1994, Florida sued under the state’s Medicaid Third-Party Liability Act to recoup billions of dollars in healthcare costs imposed on state taxpayers by the business practices of Big Tobacco. In its 1997 settlement victory, Florida forced tobacco manufacturers to make payments of about 45 cents a pack to reimburse taxpayers for the Medicaid costs caused by tobacco.
This settlement has produced billions of dollars that have helped reduce the tax burden on Floridians for paying tobacco-related healthcare costs. During the past 13 years, however, cigarette companies that were left out of the tobacco settlement because of their small size have grown very big indeed and now sell 22 percent of Florida’s cigarettes. As a result, payments to Florida’s tobacco settlement fund last year were $58.5 million lower than expected.
Aided by the loophole that leaves it exempt from healthcare payments, Dosal Tobacco sells its cigarettes for as little as $3.50 a pack, compared to more than $5 for most other cigarette manufacturers. This loophole has provided Dosal with a huge competitive advantage, vaulting Dosal to become Florida’s No. 3 tobacco company.
The growth in the company’s Florida political contributions reflects its sales growth. Since 2000, Dosal has paid more than $1 million to thwart attempts to take away its loophole. Moreover, during the 2009 legislative session, Dosal hired 34 of Tallahassee’s top lobbyists to defeat an effort to force the company to pay its share for treating sick smokers.
There’s nothing “mom and pop” about making $1 million in campaign contributions, no “small business” has 34 Tallahassee lobbyists working for it and there’s nothing family-friendly about denying state taxpayers tens of millions of dollars in healthcare costs.
I helped beat Big Tobacco to win justice for Florida taxpayers. Dosal Tobacco is Big Tobacco. Tobacco-related illness is responsible for an estimated 28,607 Florida deaths each year, according to the American Lung Association. The economic cost because of smoking in Florida is more than $12.5 billion.
Clearly, the Florida Legislature must take action to close the loophole on Big Tobacco and deliver justice for Florida taxpayers. Other states have required nonparticipating manufacturers to either participate in their tobacco settlement or to pay money into an escrow account in case of future claims. Florida should consider making Dosal pay an equity fee or pay into a similar escrow arrangement.
Or the state can take the company to court as it did the other faces of Big Tobacco. Dosal markets the same product, creating the same health risks as other cigarette companies, and Florida should hold it to the same standards.
BY BOB BUTTERWORTH, Miamiherald