The Times had an article about the big tobacco company settlement that was passed almost a decade ago.
Each year, the country’s biggest tobacco companies have provided a bonanza to the states under a $246 billion legal settlement struck nine years ago, and each year a chorus of health care experts, nonprofit groups and policy makers, and even a major tobacco company, question where all the money went.
In the early 1990s, a bunch of states (Massachusetts included, I believe) sued the tobacco companies for reimbursement for expenditures on health care for smoking-related illnesses.
The idea was, at least at first, that states would take the settlement money and put it toward tobacco prevention and smoking-cessation programs, or, at the very least, toward healthcare, improving the lives of many of, if not all, their citizens.
Unfortunately, as you cynics might have guessed, the vast majority of states (all?) ended up using most of the settlement money to pad their states’ budgets.
How’d Massachusetts do?
The Commonwealth has collected an estimated $1,874,666,483 in settlement money since 1998.
In 2006, the state collected an estimated $233.4 million from the tobacco companies.
In 2007, the state, meanwhile, spent $8.3 million on tobacco prevention. In 2008, the state is on track to spend $12.8 million.
Instead, the majority of this money (around 95%) was collected and rolled into the state’s general budget.
In addition to the money collected due to the settlement, the state charges an excise tax and a sales tax on each box of cigarettes sold in the Commonwealth.
The state collected an estimated $711.5 million in taxes and settlement money, last year, meaning the state collected taxes of approximately $426 million from the sales of cigarettes.
Which is great, if you, like me, hate cigarettes.
We were doing so well. Then things took a turn for the worse.
According to an industry watch group:
Overall cigarette consumption in Massachusetts declined by 36 percent between 1992 and 2000, compared to a decrease of just 16 percent in the rest of the country, excluding California. Smoking rates among Massachusetts’ high school students declined by 27 percent between 1995 and 2001 (from 35.7 percent to 26 percent).
Then what happened?
I dunno. Apparently, our governors gutted the program.
But, our current governor isn’t doing so well, either, even though the state’s budget increases the amount set aside, by 50%.
The Centers for Disease Control suggests that states on average contribute about one-fifth of the money they receive on anti-tobacco programs, with the portions varying by state.
Based on this calculation, the Commonwealth is spending less than a third of what it should on tobacco prevention and smoking cessation programs.
At least the state is doing a couple of things right.
According to the watch group:
The [Commonwealth’s] health care reform bill that passed in 2006 also included $14 million for a two-year pilot program that expands Medicaid services to include the following smoking cessation services – all FDA approved pharmacotherapy (including but not limited to nicotine replacement therapies) and individual and group counseling sessions.
But, that money isn’t from the settlement – it’s from Medicaid, which is paid for by the state and federal governments.
More: Tobacco State Settlement, Massachusetts – The Campaign for Tobacco-Free Kids
Also: Tobacco Taxes and Payments for Massachusetts – R.J. Reynolds (I know, right?)
And: Connecticut Is Criticized on Spending on Smoking – By Allison Leigh Cowan, The New York Times