How the 46 states use money from the Master Settlement Agreement is as varied as the states themselves. Nevada is using part of its settlement to help public television stations upgrade equipment. Michigan is funding scholarships, long-term care and bio-medical research and in Oregon, tobacco money will be used for several purposes, among them low-income housing and shelter for victims of domestic violence.

For all of the states, the $206 billion settlement is a true oddity – a once-in-a-lifetime bonanza that can be spent as they wish. Though the settlement is meant as reimbursement for the cash state governments dished out for smoking-related illnesses over the years, the payments come with no strings attached.

But in the 14 tobacco states, pleas for health care money and smoking prevention funds are tempered by the needs of tobacco farming families and the wrenching economic changes facing their communities. Those states dependent upon the golden leaf need to start programs that will transition their economies to other industries. John-Mark Hack, the president of the Kentucky Tobacco Settlement Trust Corp and the Director of the Governor’s Office of Agriculture Policy says, "We have not been historically engaged in moving Kentucky’s agriculture forward. That is unfortunate because all of us have heard the surgeon general’s warnings since 1965."

Virginia’s neighbor to the south and the country’s number one tobacco producing state, North Carolina, has created a public non-profit called the Golden Leaf Foundation. That foundation will handle 50 percent of the Tar Heel State’s settlement payments. Last year, it distributed about $5 million in grants to 39 programs in North Carolina. Many recipients were research and pilot programs of community colleges and local non-profits to advance alternative cash crops in the state. Others include retraining middle management in the tobacco industry and extending mental health outreach to North Carolina farm families in crisis.

North Carolina’s remaining money will be divided into two trusts, each receiving 25 percent of the phase one settlement payments. The Health Trust Fund will be dedicated to funding health programs including addressing the health needs of vulnerable and underserved populations. The Tobacco Trust Fund will provide funds to help tobacco farmers, quota holders and tobacco-related businesses.

Maryland’s program goes to the heart of weaning farmers off tobacco. It is paying growers to phase out tobacco and choose alternative crops. Maryland has spent the majority of its 2000 payments on smoking prevention, cancer research, substance abuse programs, teacher salaries, Medicaid and Internet access for schools. Tobacco in Maryland is a regional anomaly. There are less than 1,000 tobacco farmers in the state, the majority of them centered in three southern counties.

A buyout "would be a tough sell" in a tobacco-laden state like Virginia or North Carolina, says Maryland Del. John F. Wood Jr., who represents St. Mary’s County and is steeped in the traditions of tobacco. "The average age for a tobacco farmer in Maryland is about 62 years old. It is a labor-intensive operation, and we don’t have much labor available. At 62, 65, or 70 years old, how much longer can they do this? It’s losing part of your heritage; it’s a bittersweet thing."

In Kentucky, $140 million, or about half of Phase One payments the state will receive through 2001, is earmarked for more general agriculture development. All but two of Kentucky’s 120 counties will receive a share of the funds to distribute to state-approved development projects. In addition to disbursements for soil and water conservation efforts and debt service on various bonds, Kentucky has also set aside $1.65 million to create the Kentucky Center for Agricultural Development and Entrepreneurship, which will help with ag-related start-up businesses.

The other half of Kentucky’s funds is split between early childhood programs and health care initiatives. The commonwealth also took $40 million of Phase One cash to supplement its Phase Two reserves. Kentucky plans to keep the Phase Two fund at about $114 million a year for the life of the 12-year trust. "Writing checks to individuals is much easier than writing the processes and laws through which we hope to change a 275-year culture," says Kentucky’s John-Mark Hack. "Tobacco culture penetrates not only the lives of the tobacco grower, but all levels of government in the commonwealth."