The annual diversion of $20 million of tobacco settlement funds to a smoking cessation program was wrong, the Mississippi Supreme Court ruled Thursday.

The Supreme Court upheld a December 2006 order from a Jackson County chancery judge, who said only the Legislature could appropriate money to tobacco cessation programs.

The Partnership for a Healthy Mississippi, which went out of business last month when money dried up, had appealed.

Gov. Haley Barbour, the Medicaid program and the Health Care Trust Fund argued the money was illegally diverted to the Partnership.

Barbour said the Supreme Court’s decision “emphatically confirms what has always been obvious — only the Mississippi Legislature can appropriate the state’s money.”

“It’s a shame it look a long, drawn-out lawsuit to stop this illegal and unconstitutional diversion of taxpayer money,” Barbour said in a statement.

Mississippi in 1997 settled its lawsuit against the tobacco industry, which was filed to recover public costs of treating sick smokers. The Partnership was created later as a pilot program using separate payments from cigarette makers.

When the money for the program ran out, then-Attorney General Mike Moore — who filed the tobacco lawsuit — obtained a December 2000 court order from Chancery Judge Jaye Bradley that directed $20 million a year of Mississippi’s annual settlement payments to the Partnership.

Moore said the decision was a sad day for Mississippi.

“We go from a state who led the nation in the tobacco fight and had the No. 1 tobacco prevention program in America … we go from first place to last place,” Moore said in a telephone interview.

Moore, whose father recently died of a smoking related illness, said the Partnership was a program that could have “prevented thousands of kids from ever getting addicted to tobacco and dying from cancer or heart disease.”

“It is terrible to see such a wonderful program destroyed,” he said.

The Supreme Court, in its 6-1 ruling, said Thursday that Bradley had no authority to bypass the Legislature when she first ordered funds diverted to the Partnership in 2000.

“The $20 million given annually to the Partnership has never been appropriated,” Justice George E. Carlson Jr. wrote for the majority. “The tobacco installment payments are monies that unquestionably belong to the state of Mississippi, and all of these payments, including the annual payments which were diverted to the Partnership, should have been placed in the Health Care Trust Fund until properly appropriated by the Legislature.”

Bradley reversed herself in 2006 when the Partnership agreement was challenged by Barbour.

Mississippi is collecting about $4 billion over 25 years in its tobacco lawsuit settlement, with most of the money going to the Health Care Trust Fund, which was established by the Legislature and pays for a variety of programs.

State Treasurer Tate Reeves, chairman of the board of the Health Care Trust Fund, said Thursday that the ruling confirmed that the proceeds from the tobacco settlement should never have gone to the Partnership.

“I fully support the need to educate Mississippi children on the devastating impact that is caused by tobacco use, but we must do that in a manner that is constitutional and ensures accountability and oversight for the distribution of those funds,” Reeves said.

The Partnership has sponsored a wide range of activities, including smoking-cessation programs and anti-tobacco ad campaigns. The group also hires school nurses and funds groups such as 4-H clubs.

Carlson said while the Supreme Court agreed the tobacco settlement mentioned a $61.8 million anti-smoking cessation pilot program, the state nor the tobacco companies agreed to continued funding for it after two years.

Carlson said since the diversion of the money to the Partnership had been illegal dating back to Dec. 22, 2000, the Partnership must repay any remaining money.

Moore said the Partnership is operating off interest money with five or six employees. He said the Partnership had turned over settlement money to state since Bradley’s ruling in 2004.