State Tobacco Revenues Compared with Tobacco Control Appropriations—United States, 1998–2010
May 25, 2012 / Vol. 61 / No. 20
In 1998, 46 states and DC reached a settlement agreement with the tobacco industry known as the Master Settlement Agreement (MSA). Its terms included payments by the industry to these states of approximately $206 billion over 25 years. While the intent of the MSA was to reimburse states for Medicaid costs related to tobacco use and to prevent youth initiation of smoking, the agreement did not stipulate that settlement revenues be dedicated to tobacco prevention or cessation efforts. From 1998 through 2010, states collected a combined total of $243.8 billion in MSA and cigarette excise tax revenues, but invested only $8.1 billion in state tobacco control programs. The Centers for Disease Control and Prevention has published Best Practices for Comprehensive Tobacco Control Programs, an evidence-based guide to help states plan and establish effective tobacco control programs. Had states followed its recommendations, they would have invested $29.2 billion over that period.
Evidence-based, statewide tobacco control programs that are comprehensive, sustained and accountable have been shown to reduce smoking rates, tobacco-related deaths, and diseases caused by smoking. States that have made larger investments in comprehensive tobacco control programs have seen cigarette sales drop at more than twice the rate as in the United States as a whole. For example, when California increased the state excise tax by $0.25 per pack in 1988, approximately $0.05 per pack was dedicated to tobacco prevention programs. In the initial years, California came close to reaching 1999 Best Practices recommendations, and has maintained relatively stable funding throughout the years. As a result, adult smoking rates in California declined from 22.7% in 1988 to 13.1% in 2009, and are associated with saving $86 billion in personal health-care expenditures.
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