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U.S. State and Local Issues

Broken Promises to Our Children

The 1998 State Tobacco Settlement 14 Years Later

December 6, 2012

Since the states settled their lawsuits against the tobacco companies in November 1998, we have issued annual reports assessing whether the states are keeping their promise to use settlement funds — estimated at $246 billion over the first 25 years — to attack the enormous public health problems posed by tobacco use in the United States.

The states also collect billions more in tobacco taxes.

Our latest report, issued December 6, 2012, finds that states are spending only a miniscule portion of their tobacco revenues to fight tobacco use.  The states have failed to reverse deep cuts to tobacco prevention and cessation programs that have undermined the nation’s efforts to reduce tobacco use.

In Fiscal Year 2013, the states will collect $25.7 billion in revenue from the tobacco settlement and tobacco taxes, but will spend only 1.8 percent of it – $459.5 million – on programs to prevent kids from smoking and help smokers quit.  This means the states are spending less than two cents of every dollar in tobacco revenue to fight tobacco use.

This report is issued by the Campaign for Tobacco-Free Kids, American Heart Association, American Cancer Society Cancer Action Network, American Lung Association, Robert Wood Johnson Foundation and Americans for Nonsmokers’ Rights.

Other key finds include:

• States have failed to reverse deep cuts that reduced tobacco prevention funding by 36 percent, or $260.5 million, from FY 2008 to FY 2012. Funding this year is essentially flat with the $456.7 million budgeted last year.

• Most states are falling short of funding levels for tobacco prevention recommended by the Centers for Disease Control and Prevention (CDC).  The $459.5 million the states have budgeted amounts to just 12.4 percent of the $3.7 billion the CDC recommends for all the states combined.

• Only two states — Alaska and North Dakota — currently fund tobacco prevention programs at the CDC-recommended level.  Only three other states – Delaware, Wyoming and Hawaii — provide even half the CDC-recommended funding

As the nation implements health care reform, the states are missing a golden opportunity to reduce tobacco-related health care costs, which total $96 billion a year in the U.S.  There is growing evidence that tobacco prevention programs save lives and save money by reducing health care costs.  One recent study found that Washington state saved more than $5 in tobacco-related hospitalization costs for every $1 spent during the first 10 years of its program.

Given such a strong return on investment, states are being truly penny-wise and pound-foolish in shortchanging tobacco prevention and cessation programs.

 

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