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the Tobacco Institute 950000 Proposed Budget

Date: 11 Oct 1994
Length: 89 pages
91082676-91082764
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Type
BUDG, BUDGET/BUDGET REVIEW
CHAR, CHART/GRAPH/MAPS
Alias
91082676/91082764
Site
N89
Area
PETERSON,AL/FINANCE
Characteristic
OVER, OVER SIZE DOCUMENT
Litigation
Nyag/Produced
Date Loaded
28 Apr 1999
Named Organization
A Philip Randolph Education Fund
Aclu
Ada
Alec
Alexis De Tocqueville Inst
American Agricultural Movement
American Agriculture Movement
American Civil Liberties Union
American Legislative Exchange Council
Assn of Wa Businesses
Assn or Industries
Bc+T
Business Council on Indoor Air
Bw, Brown & Williamson
C+B
Ca Congress
Cdc
Citizen Action
Citizens for Tax Justice
Coalition of Labor Union Women
Comm of Council
Congressional Fire Services Inst
Coordinating Comm
Council of State Govt
Csg
Ctj
Economic Policy Inst
Epa, Environmental Protection Agency
Epi Ca
Ets
FDA, Food and Drug Administration
Federation of Southern Cooperatives
Finance Comm
Fl Council
Freedom to Advertise Coalition
Gary Peterson Economic Studies
Greater Nd Assn
Iaq
Initiative Campaign
Labor Council for Latin American Adv
Labor Management Comm
Madison Chamber of Commerce
Management Comm
Md OSHA
Mn Wholesaler Assn
Natl Assn of State Fire Marshals
Natl Conference of State Legislature
Natl Council of Senior Citizens
Natl Tobacco Council
Natl Volunteer Fire Council
NC Business + Industry Assn
NC Farm Bureau
NC Free
NC Retail Merchants Assn
Nd Grocers Assn
Nemi
Nfib
No New Tax Coalition
Ny Assn
Ny Business Council
Ny Convenience Store Assn
Ny Restaurant Assn
Ny Tavern Assn
Oh Retail Assn
Ok Assn of Tobacco + Candy
Ok Assn of Vendors
or Food Industry
or Hotel Assn
or Restaurant Assn
OSHA, Occupational Safety & Health Administration
Pa Food Merchants Assn
Pa Tobacco Farmers
Pension Comm
PM, Philip Morris
Price Waterhouse
Ri Convenience Store Assn
Ripley Tobacco Festival
RJR, R.J.Reynolds
Sad
Savarese + Associates
SC Chamber of Commerce
SC Convenience Store Assn
SC Retail Merchants Assn
Sd Innkeepers Assn
Sd Retail Merchants Assn
Senter + Associates
Sioux Falls Chamber of Commerce
Sparber + Associates
TI, Tobacco Inst
Tico, Comm of Counsel(TI)
Tiec, Executive Comm(TI)
Tn Assn of Businesses
Tn Restaurant Assn
Tn Wholesale Grocers Assn
Tob Growers Info Center
Tobacco Growers Information Comm
Tobacco Industry Labor Management Comm
Tri Data
Tx Assn of Businesses
Tx Oil Marketers Assn
Tx Restaurant Assn
Tx Retailers Assn
Ut Food Industry Assn
Ut Hotel + Motel Assn
Ut Taxpayers Assn
Va Assn of Counties
Va Chamber of Commerce
Va Farm Bureau
Va Free
Va Retail Merchants Assn
Vt Grocers Assn
Wa Legal Foundation
Wa Restaurant Assn
Wa Retailers Assn
Wa State Hotel Assn
Wa State Tavern Assn
Wi Mfg + Commerce
Wi Petroleum Marketers Assn
Wi Retail Merchants Assn
Wi Tobacco Farmers
Wv Chamber of Commerce
Wv Retailers Assn
Wy Hotel + Motel Assn
Wy Taxpayers Assn
Xcsl
Named Person
Adams, W.
Avedon, D.
Caputo, N.
Carter, A.
Chilcote, S.
Cronan, S.
Daniels, J.
Dawson, B.
Dieman, G.
Donahue, T.
Donoho, P.
Evans, S.
Featherstonhaugh, J.
Fitzpatrick, E.
Forscey, M.
Freeland, G.
Goelling, L.
Hilderley, D.
Holayter, W.
Hrycaj, C.
J, C.T.
Jarvis, J.
Junkins, L.
Kaiser, H.
Kaiser, L.
Lauria, T.
Mansinne, S.
Merryman, W.
Michel, L.
Mickens, W.
Mihas, T.
Miller, R.
Moore, A.
Morris, R.A.
Morris, R.O.
Oconnor, J.
Ortis, F.
Orzechowski, W.
Pruett, R.
Radell, M.
Rita, M.
Senter, D.
Shofe, A.
Surgeon General
Thomas, D.
Wahby, D.
Waxman
Weiland, D.
Wolper, R.
Woodson, W.
Yoe, C.
Master ID
91082633a/2764

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arp00e00

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Page 81: arp00e00
GOALS & OBJECTIVES FOR 1995 Public Affairs Division The Tobacco Institute v w The Public Affairs Division (PAD) of The Tobacco Institute is designed to manage several broad areas of legislative support and support to allied groups and independent consultant experts to help TI and its member companies meet the goals and objectives of the industry. The basic day-to-day activity of PAD's involvement includes the following: A. Provide legislative support for Institute and industry programs on all federal, state and local legislative issues of concern to the industry. This includes, but is not limited to, the following: hearing coordination and assistance, including preparation of expert witnesses and materials relating to their presentations; outreach to potential allies; preparation of issue materials for general public and specific audiences; on-line computer searches and data retrieval for TI, member company staff, lawmakers, allies and others; regular collection and dissemination of information on legislation; review and dissemination of literature on tobacco-related matters of interest to the industry; work with outside consultants and legal counsel on appropriate matters relating to PAD programs and projects. B. Provide similar support for TI and the industry on federal regulatory matters, including OSHA, FDA and other agencies. C. Develop and implement TI/member company strategies and tactics for work with tobacco-specific, as well as broad-based, agricultural groups. Much of this activity is supported by TI through the National Tobacco Council, the Tobacco Growers' Information Committee and support to liberal elements in the farm community. D. Through membership in the Tobacco Industry Labor Management Committee (LMC) work closely with tobacco-specific and broad-based segments of organized labor on issues of mutual concern. This also includes work with liberal groups that are affiliated, at least in spirit, with the organized labor movement. Thus, PAD participation in TI/industry activities is delivered in three ways: through (1) TI- specific programs, (2) work with agriculture allies and (3) cooperation with liberal/labor groups. In these areas PAD develops and disseminates materials on important tobacco issues. PAD also develops and implements programs associated with those materials and/or issues.
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Legislative Support The PAD role in supplying elemental legislative support for TI and the industry has basic costs associated with it (A & B). These costs represent about 30% of the Public Affairs budget. They include the following: staff compensation and benefits; travel; clearance work on materials with legal counsel; work with consultant on issues; subscriptions and books; on-line service charges; postage and delivery; reproduction and printing; meeting preparation; telephone; business taxes; computer services; data processing allocations; occupancy costs; and other "administrative charges." The estimated administrative costs in 1994 and proposed costs for 1995 (including administrative support to the NTC) are listed below. In the case of a few items such as "books & subscriptions" and "reproduction & printing," the percentage,increase requested is significant. The reason is simple. In these cases, TI either eliminated funding for or cut back severely in these areas in 1994. For 1995 we view as essential the reproduction of outdated issue brochures and other materials and the renewal of certain publications and research services. 1994 1995 ($000) ($000) Legalexpenses -- Tl legal expenses ........................ 125 ..... 150 - OSHA-related legal expenses ................ 625 ..... 250 Travel .............................. 30 ...... 50 Tax/public smoking consultant expense ........... 55 ...... 60 Books & subscriptions ......................... 12 ...... 30 Postage & delivery .......................... 48 ...... 25 Reproduction & printing ....................... 43 ..... 145 Telephone/fees/taxes/dues/misc./etc ............. 15 ...... 24 Staff compensation .................. ...... 608 ..... 642 Employee benefits .......................... 164 ..... 174 Employee recruitment ........................ 26 ...... 10 Occupancy allocation ....................... 303 ..... 303 Data processing allocation ..................... 69 ...... 70 On-line research services ...................... 48 ...... 85 2171 2018 For 1995 these necessary administrative costs that enable our staff to perform basic functions should actually e rease. This is due in large measure to the possible drop in legal costs associated with federal OSHA. It should be noted, however, that OSHA legal fees will still be substantial and could be higher than predicted once the extent of rebuttal comments and other needs become clear at the first of next year. 2
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We recommend important adjustments in two budget categories for 1995: "professional fees" and "support for tobacco and other organizations." Both are related to TI-specific programs and projects. The items listed below either call for new funding or sianificant~ increased funding. The issues in question and the rationale for the activities are as follows: Tobacco Taxes General . Update the economic data upon which the industry bases its models and projections. The data were last updated in 1992 using 1990 figures. With Management Committee approval on September 13, 1994, we are moving to provide 1994 data for industry use. The information will be ready, at least in preliminary fashion, by winter 1995. The cost is 30K (new funding). . Government officials and anti-tobacco advocates will be citing new "social cost" figures from the CDC and elsewhere to try to bolster their case for increased tobacco taxes., Rebuttal of those "studies" is very important. The cost is 75K (new funding). . TI's chief economist works closely with leading figures at the Alexis de Tocqueville Institution (AdTI). Some member companies support the organization. Opinions expressed and promoted by AdTl frequently support industry arguments on economic and other matters. We recommend a grant in 1995 of 20K (new funding) from TI to AdTI. State-specific . State tax increase proposals in the range of one dollar or more will not be uncommon in 1995. State Activities envisions an increased need for cross border studies and on-the-scene testimony and one-on-one meetings with lawmakers. Staff at PM and RJR who work on these issues agree that TI should be prepared in this area. They do not have duplicative programs in existence at their companies. The cost is about 75K (new funding) for 1995 for studies and a modest increase for witness appearance costs (increase 15 to 40K). 3
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Public Smokina General • The industry must continue to seek the support of independent experts in the areas of ETS and IAQ. No "recruitment" work has been done in more than a year, as is becoming all too evident. The current group of independent scientists available as expert witnesses has shrunk and many of those who remain are stale. * We must add new, independent witnesses on ETS and IAQ. Even a modest search and educational program will cost a minimum of 300K (new funding) for 1995. This is a time-consuming and difficult task. In addition, it will be more difficult in the mid-90's than it was in the mid-80's to find scientists willing to speak frankly and publicly on this very controversial issue. Federal & State . In 1994 we expect to disburse 565K in consultant fees for preparation and participation in OSHA hearings. The first round of hearings is scheduled to end in December, according to OSHA. This estimation is, at best, extremely optimistic. In addition federal OSHA will continue to receive significant attention and require rebuttal of anti-tobacco witness statements and other work that will carry through all of 1995. We see a budget of 200K (a decrease of 365K from 1994) as the absolute basic minimum to continue to be OSHA participants. . With continuing federal OSHA activity, the inevitable anti-smoking bills from Waxman and others, the likely increase in state OSHA smoking regulations, as well as the expected large number of state and key local public smoking battles, testimony by ETS and IAQ experts remains essential for 1995. We recommend a slight increase in ventilation consultant fees (130 to 150K). We hope we can have a slight decrease in our comment and testimony budget line item on ETS (110 to 100K). . In addition, scientific consultants are going to have to begin to participate more fully in appropriate scientific forums in 1995. TI slashed this activity to zero in 1994, but we eventually spent 20K on such meetings at the direct request of our member companies. We recommend a realistic budget for this activity in 1995: an increase from 20 to 60K. 4
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• Although member companies (and TI in the past) have programs to help enlist the assistance of the business community on IAQ and ETS, a frank accounting makes it clear that the business community needs further education on these matters and needs it immediately. TI proposes two modest programs to help achieve some business understanding and cooperation: 1. Support for the Business Council on Indoor Air (BCIA). BCIA is one of the few business groups that has and can continue to express the position that a general systems approach to IAQ is sensible, not necessarily cost prohibitive and preferable to smoking bans. BCIA will say this in its federal OSHA testimony. TI dropped support for the group in 1994. We recommend support of 50K (new funding) for 1995. 2. Many within the business community are either ill-informed or have been misled regarding federal, state and local smoking laws and regulations. There also is confusion concerning issues of privacy, how the ADA may relate to smoking concerns, etc. We recommend retaining a labor law expert to help us determine more effective ways to reach key elements of the business community (50K in new funding). Advertising & Promotion . Pressure will continue with regard to advertising, point-of-sale materials and other promotional concerns. We foresee a need for state and federal testimony and comments in these areas for 1995. We recommend a budget of 35K (new funding), an amount that will allow for expert testimony/comments in up to five instances. . Much is made of antis' claims that tobacco advertising somehow encourages children to smoke. A study looking into this claim by an independent group, such as FAC (Freedom to Advertise Coalition) would help educate lawmakers and the public if promoted properly. FAC might consider expanding the study to include advertising for other products deemed suitable for use only by adults. The cost of such a study and promotion would be about 50K (new funding). . Although some member companies offer support to the ACLU and Washington Legal Foundation, we recommend that TI offer these groups modest support on behalf of the entire industry. This was done effectively 5
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in past years; TI still has some of the best, most direct contacts within both groups. We recommend 25K to the ACLU (new funding) and 35K to the WLF (new funding) for 1995. Fire Safety . TI's fire safety consultants participate in functions with members of the fire community, prepare and disseminate reports and work diligently to keep the lines of communication open. Those lines must be kept open in 1995. We had two sets of fire consultants in the first half of 1994. We recommend one group in 1995 at a cost of 150K versus the total 165K in 1994 (decrease of 15K in funding). To assist our consultants in their work we recommend modest increases in our contributions to state fire marshals, and volunteer firefighters (8 to 17K). . We also recommend a pilot smoke detector maintenance program for volunteer firefighters. Early indications from member companies with fire programs suggest that such a program would complement their own activities. The cost is approximately 160K (new funding). Support to Agricultural Organizations The agricultural community forces the public to look at the human face behind the tobacco industry. The growers' efforts in 1994 against unfair tobacco excise tax increase were absolutely essential in helping us reach our goals on that core objective. The agricultural community also is vital in public smoking issues, including EPA activities; and other matters as well, primarily at the federal level, but to a degree at the state/local level. The farm groups meet with lawmakers and the media, and through various farm groups we are able to share information with their memberships. In addition, our tobacco agricultural allies bring other farm/ag voices to the table, voices we could not attract without the support of the NTC, TGIC and others. These groups are also willing to work with independent groups and TI to support studies and other educational materials. TI supports agricultural work through the National Tobacco Council, the Tobacco Growers' Information Committee, minority/liberal farm groups (Senter & Associates, Federation of Southern Cooperatives) and related avenues. 6
Page 87: arp00e00
Much of TI's general budget assets are used to assist farm groups in that we share TI- prepared materials with them, help them edit and distribute documents, work with them on press needs and in a myriad of other ways. That support will again be vital in 1995. The NTC budget was included under the general TI budget on page two. It is noted again here to provide an idea of all the specific grants for farm groups. item 1994 1995 ($000) ($000) National Tobacco Council (NTC) ................ 50 ...... 70 Tob. Growers' Info Center ..................... 40 ...... 38 Senter & Associates ......................... 60 ....... 72 Federation of Southern Cooperatives ............. 20 ...... 20 American Agriculture Movement .................. 0 ...... 15 170 215 We see a need for only minor changes in our agricultural programs. We recommend a more aggressive program to attract support from liberal and minority agricultural voices. That is best achieved through work with Senter & Associates, the AAM and the Federation of Southern Cooperatives. Support to the Tobacco Industry Labor Management Committee (LMC) Support from organized labor and liberal groups associated with organized labor will be essential in 1995 on a number of matters --both federal and state -- in legislative, as well as regulatory, forums. As with the agricultural community, work by the LMC puts a human face on the tobacco industry. The LMC also channels the natural energies of a politically astute labor constituency in directions of mutual concern. It is appropriate to work with organized labor through the formal LMC structure. That is a major reason why one sees such a dramatic difference in the percentage of the budget given over to support for, say, agriculture groups versus support for the separate LMC entity. This formal committee structure must be maintained. For 1995, we are recommending to the LMC that it continue its support at the same level for most of the groups it supported in 1994. Additionally, we recommend essentially the same staff/ consultant structure as in 1994, with possible inclusion of one additional consultant. A complete LMC 1994-95 budget comparison is attached. What follows is a discussion of the significantly altered or new items recommended for the LMC in 1995. 7
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General . There may be an opportunity for the LMC to retain the services of one additional prominent consultant for 1995. This consultant would add significant stature to the LMC. The costs associated with this potential slot is approximately 110K (new funding). Federal • Even if health care reform is put to bed early in 1995, there remains a serious chance that Congress will attempt to earmark tobacco tax increases to deficit reduction or other programs. It seems prudent, therefore, to support a study through Citizens for Tax Justice that points out the regressive nature of excise taxes, specifically tobacco excises. The charge to the CTJ will be to attempt to explore and promote its study in a new and compelling manner. Such a program is expected to cost the LMC approximately 60K (new funding). . With talk of FDA regulation and other draconian matters, the BC&T would like support from the LMC to conduct a study of the effects of such drastic possibilities on tobacco's workforce. The study and its promotion would cost approximately 75K (new funding). State . Among the industry's state legislative experts there is unanimous agreement that anti-tobacco efforts will be significantly increased in the states in 1995 over 1994. States will be scrambling to meet their own health care needs (Medicaid, indigent care, etc.); some will face deficits and still others will try to earmark tobacco taxes for specific programs, including tobacco control. . For organized labor to raise a credible voice against regressive tobacco taxes, it must have in hand a progressive alternative to offer liberal/mainstream lawmakers. A progressive plan, researched by CTJ and/or the Economic Policy Institute and promoted by state Citizen Action chapters, could be adopted to fit labor's needs in most states with a large organized labor presence. A study of this sort, coupled with promotion in several states, would require a grant from the LMC of approximately 115K (new funding). co 1 M~ W N 8 v 0) w
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• State activities experts recommend an increase in the number of state- specific LMC representatives. Specifically, the LMC is being asked to bring on consultants for the following states or areas, in addition to those already in place: California, Iowa, New York, Texas, New England and Minnesota. Two states in which the LMC offered support in past years, Virginia and Michigan, could be dropped in the view of state experts. That nets out to a cost for state LMC consultants of 533K for 1995 versus 400K in 1994 (133K In additional funding). 9

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