Friday, January 14, 2005

Hogan Is Tapped For Key GA Role
Halifax County Delegate Named To House Appropriations Committee

BY Keith Strange
G-V STAFF WRITER

In what could be a key assignment for economic development efforts in Southside, two-term Del. Clarke Hogan, R-Halifax, has been appointed to the budget-writing House Appropriations Committee.

House Speaker William J. Howell made the appointment Wednesday when the General Assembly convened for its 45-day winter session.

“It’s both an honor and great responsibility to be placed on the Appropriations Committee,Ó Hogan said yesterday. “I look forward to working on the state budget and I’m humbled but very appreciative to be able to serve in this capacity.

“While this session may not be as difficult as the last one, we still have many pressing needs in Southside and the Commonwealth that need to be addressed,” he added. “I have a lot to learn about the appropriations process in state government, but look forward to hearing from my constituents about their needs and concerns as far as the state budget.”

Many community leaders feel the appointment will mean Halifax County and rural Virginia will have a strong voice during the budget process.

“Any money the state spends originates there,” said Rick Harrell, chairman of the Halifax County Economic Development Authority. “Appropriations decides what money to spend and where.

“It is, without question, the most powerful committee in the state,” he added. “With Hogan on that committee, it’s obvious it will be easier for us to attain state appropriations, especially those that relate to economic development and education.”

Harrell said the appointment also illustrates Hogan’s position in state politics.
“It shows that Clarke is well-respected in Richmond and has influence in the General Assembly,” he said.

“It’s a leadership role in the legislature and that’s important,Ó South Boston Town Manager Ted Daniel said. “Any time our delegate gets put in a key leadership position, it’s not only a reflection on his qualities and intellect, it reflects the esteem in which he is held by his peers and puts him into yet another position to clearly articulate the needs of Southside Virginia."

At 35, Hogan is the second-youngest delegate to be appointed to the appropriations committee. Only Lynchburg Del. Preston Bryant Jr., R-Lynchburg, who was 34 when he was appointed to the committee, was younger.

Bryant, who broke Republican Party ranks and came out in favor of tax increases during last year’s contentious budget session, was reassigned from Appropriations to the Agriculture, Chesapeake Bay and Natural Resources Committee.

Hogan’s appointment fills Bryant’s seat.

In addition to Appropriations, Hogan serves on the Agriculture, Militia, and Health, Welfare and Institutions (HWI) committees.

 

Big vs Little Tobacco
Small Manufacturers Fight For Survival

BY Stephanie Stoughton
THE ASSOCIATED PRESS

RICHMOND, Va. –Little Tobacco is preparing to fight Big Tobacco in Virginia and other states considering legislation that could sap the small manufacturers’ sales.

The dispute emerged from a landmark national settlement that required Philip Morris USA and other industry giants to pay $206 billion to settle lawsuits by the states over health care costs.

Major tobacco companies and the National Association of Attorneys General say a loophole gives an unfair price advantage to smaller manufacturers operating outside the 1998 agreement. But the smaller companies counter that the states are unfairly seeking to punish them for the larger companies’ past behavior –and perhaps snuff them out for good.

“The attorneys general are supposed to be representing all of us,” said Everett Gee, general counsel for S&M Brands Inc., the Keysville, Va., maker of Bailey’s cigarettes. “But clearly, the states are in bed with Big Tobacco.”

In recent years, Little Tobacco’s squeaks of protests barely registered as statehouse after statehouse passed legislation to close the loophole –an amendment that has forced many small cigarette makers to bump up their prices.

Lobbyists for the companies quickly realized it was almost impossible to match the combined clout of the industry giants and the attorneys general group, which had urged the states to deal with Little Tobacco’s growth.

In Delaware, for example, lobbyists for the small manufacturers thought they had defeated the measure. But, “it reappeared the last day of the session, four minutes past 12 at night, when our lobbyist was in bed,” said Ron Tully, chairman of the Council of Independent Tobacco Manufacturers of America.

Many people are familiar with the basics of the Master Settlement Agreement, which required industry giants Philip Morris, R.J. Reynolds, Brown & Williamson (which has since merged with RJR to form Reynolds American Inc.) and Lorillard Tobacco Co. to make large payments to the states. The companies passed on the costs to smokers by raising cigarette prices.

Lesser known are the settlement’s complex rules.

Philip Morris and the other companies, for instance, make payments that are allocated to the states based on a formula. Virginia, for example, receives about 2 percent of the funds, while states like New York and California each receive about 13 percent.

To keep smaller manufacturers from getting a price advantage, the states passed statutes requiring that they deposit money into escrow –currently about $3.90 per carton –in each state where they did business. The money would be returned in 25 years, providing there were no liabilities from tobacco-related claims.

But the statutes also allowed the little guys to quickly recover a portion of their escrowed money if the amount they paid to a particular state exceeded what they would have paid had they joined the settlement. That meant that companies that concentrated their sales in states like Wyoming and Idaho –which receive tiny shares of MSA payments –could recoup much of their escrow funds and then outprice the major tobacco firms.

The nonparticipating manufacturers were able to grow their market share from less than 1 percent before the settlement to more than 8 percent in 2003, according to a report by PricewaterhouseCoopers.

Alarmed by the trend, the national attorneys association in the fall of 2003 warned the states to expect a large decline in settlement payments. It also urged the states to target nonparticipating manufacturers’ sales by adopting several measures, including the amendment that closed the so-called loophole in the escrow statute.

So far, the amendment has passed in 37 states.

But the nonparticipating manufacturers have made some progress by filing suits against states and by lobbying heavily in other states that have yet to pass the legislation.

In December, Xcaliber International Ltd. and KT&G Corp. filed a complaint in Oklahoma, seeking to block that state from enforcing an amendment they say violates antitrust law. A federal judge agreed to a temporary restraining order until a hearing later this month.

In New York, U.S. District Judge Alvin Hellerstein in the fall issued a preliminary injunction against the state’s enforcement of the measure –part of an ongoing, multifaceted case challenging the national settlement.

In his opinion, Hellerstein said the resulting escrow payments put up barriers to competition.

Court documents in the New York case show that CigTec Tobacco LLC of Charles City, Va., was forced to increase the price of a carton of cigarettes from $7.50 to $10.60, leading to a 69 percent decline in sales in Louisiana and a 39 percent decrease in Alabama after those states passed the amendment.

The company folded last year.

The small tobacco firms hope the court cases will make politicians in Virginia and elsewhere more cautious about supporting the amendment. The other states that haven’t passed the measure are North Carolina, South Carolina, Arkansas, Kansas, Missouri, Nevada, New Jersey and North Dakota.

Last year, the small companies helped stave off the legislation in Virginia, despite backing from Gov. Mark R. Warner and Richmond-based Philip Morris, the nation’s largest cigarette maker. And though the national organization has thrown its support behind the bill, Attorney General Jerry Kilgore has taken no public position on the bill. (In a letter to one legislator, however, he says the amendment “appears to be a viable course for the Commonwealth to take.”)

After the bill didn’t come up for a vote in the last General Assembly session, Philip Morris expressed its disappointment. “Without this legislation, the integrity of Virginia’s escrow statute, and the important financial benefits that it brings to the Commonwealth are threatened,” it said.

The small tobacco companies say they have come up with an alternative provision that would force all tobacco manufacturers to pay the same fees and adhere to the same rules.

They contend they are paying more than much larger firms in part because their contributions, unlike the Master Settlement Agreement payments, are not tax deductible. Another problem is that a certain set of companies in the agreement –which includes Vector Tobacco and Liggett Group –managed to get more favorable terms with the states, which resulted in lopsided payments.

Jamie Drogan, a spokeswoman for Philip Morris, says there is no room for compromise on the amendment. She says small manufacturers have received an unfair pricing advantage for years, which has hurt state funding and the public health goals of the national settlement.

“We believe there is no other solution,” she said.

 

Obituaries

Earl Warren Adams

Earl Warren Adams, 50, of Nathalie, died January 10 in South Boston.

His survivors include his mother: Audrey Adams of Nathalie; sister: Eloise Adams of Nathalie; and four brothers: Curtis Adams of Nathalie, William and Larry Adams of Alexandria, and Preston Adams of Newport News.

A funeral service will be held tomorrow, Jan. 15, at 1 p.m., at the Millstone Baptist Church, Nathalie, with Rev. Chester Spruill officiating. Burial will follow in the church cemetery.

Mary Jo Tucker Lawson

Mary Jo Tucker Lawson, age 77, of Washington Harbour, Washington, N.C., and formerly of South Boston, died January 7 at her home.

Mrs. Lawson was born in Durham County, N.C., on June 18, 1927, the daughter of the late Edwin Warfield and Rebecca Francis Bacon Duncan Tucker. She was married to the late John Craddock Lawson Jr.

Her survivors include two daughters: Rebecca Leach and husband, Dick, of Washington and Nancy Holcomb and husband, Harry ,of Franktown; son: John C. Lawson III and wife, Linda, of New Bern N.C.; five grandchildren: Elizabeth L. Johnson of New York, N.Y., Nancy C. Leach of Ocracoke, N.C., Paul G. Watson IV of Eastville, Tucker L. Watson of Arlington and John D. Watson of Charlottesville; and four great-grandchildren.

A funeral service will be held Sat., Jan. 15, at 2 p.m., at St. Peter’s Episcopal Church in Washington with Rev. William Bradbury officiating. Interment will follow in the chapel garden. The family will receive friends at the home on Jan. 15.

In lieu of flowers, memorials may be made to Pamlico-Tar River Foundation, P.O. Box 1854, Washington, NC 27889 or the charity of your choice.

Louis Andrew Powell

Louis Andrew Powell, 69, of 5227 Chatham Rd., Halifax, died January 9 at Halifax Regional Hospital.

Mr. Powell was born in Halifax County on January 13, 1935, son of the late Fulton and Gertrude Anderson Powell. He was a member of New Zion Baptist Church.

His survivors include two daughters: Betsy Powell of Queens, N.Y. and Joanne Powell of Coral Springs, Fla.; four sisters: France Womack and Janie Walker of Brooklyn, N.Y., Rachael Edmonds and Maple Palmer of Halifax; and five grandchildren.

A funeral service will be held today, Jan. 14, at 1 p.m., at the New Zion Baptist Church, with the Rev. Willie Yancey officiating. Burial will follow in the church cemetery.

August Pearl Cornitcher Reynolds

August Pearl Cornitcher Reynolds, 77, of 1026 Memorial Drive, South Boston, died January 9 at Halifax Regional Hospital.

Mrs. Reynolds was born in Philadelphia, Pa., on February 19, 1927, son of the late Nathaniel and Iola Chappell Cornitcher. She was married to the late Thomas Reynolds and was a member of Memorial Baptist Church.

Her survivors include two sisters: Quintella Burney of Philadelphia and Iola Dawkins of South Boston; two brothers; Herbert Cornitcher of Camden, N.J., and Nathaniel Cornitcher of Philadelphia.

A funeral service will be held tomorrow, Jan. 15, at 1 p.m., at Memorial Baptist Church with the Rev. Richard Terry officiating. Burial will follow in the church cemetery.

Cory Aaron Wilkerson

Cory Aaron Wilkerson, infant son of Whitney Lynn Martin and Chad Ryan Wilkerson of South Boston, died January 12. He was born in Halifax County on January 12.

His survivors include his mother and father; brother: Cody Dean Wilkerson of South Boston; maternal great-grandmother: Annie Hackney of South Boston; paternal grandparents: Eddie and Lunnie Wilkerson of Scottsburg; maternal grandfather: Raleigh Dean Martin; maternal great-grandmother: Dorothy Howerton of South Boston; paternal great-grandparents: Robert and Lou Wall of South Boston; paternal great-great-grandmother: Etta Wall of Virgilina. He was preceded in death by his maternal grandmother: Marion Hackney Martin.

A graveside service will be held tomorrow, Jan. 15, at 2 p.m., at Dan River Baptist Church cemetery with the Rev. Doug Gibson and Rev. Raymond Bucklew officiating.