Justices agreed that the Legislature was within its legal rights when it moved the money in 2008, even though it had been placed in a protected fund.
Lawmakers diverted the money first to an economic stimulus package and later for health programs unrelated to smoking. In the process, it liquidated the state's Tobacco [image-nocss] Use Prevention and Control Foundation.
The cash was part of Ohio's $10.1 billion settlement with big tobacco companies in 1998, a national deal aimed at paying states back for tobacco-related health-care costs.
The high court's ruling came in a case filed by trustees of the Tobacco Use foundation and the anti-smoking American Legacy Foundation, a national group to which they transferred a portion of the money after lawmakers voted to divert it.
Writing for the court, Justice Paul Pfeifer said parties in the case debated whether the money would be better spent on tobacco cessation than on creating jobs.
"The question whether it is wise to enact legislation is not the same question as whether the legislation is constitutional," he wrote, according to Bloomberg.
Visiting Justice Sean Gallagher said he believes lawmakers intended to create a safe trust fund for the money but failed, stymieing legal protections trustees argued they had.
"In my view, the General Assembly arguably intended to create a trust and to irrevocably appropriate funds to that trust for antitobacco efforts," Gallagher wrote. "Though the purpose was noble, the efforts were ultimately unsuccessful."
In an opinion joined by Justice Evelyn Lundberg Stratton, Gallagher concluded, "There is no doubt that many Ohioans stood to benefit from the antitobacco programs that were funded by the endowed fund. Though the result may seem unfair to some, the acts of the legislature were permissible and are not constitutionally infirm."
Since the Master Settlement Agreement was signed with tobacco companies, several states have passed constitutional amendments to protect their anti-smoking programs, the ruling noted. They include Florida, Idaho, Louisiana, Montana, and Oklahoma. Ohio did not.
Justices said the foundations' arguments that the tobacco-use fund was similar to a state pension fund were not viable.
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