Jul. 22 2002
Washington, DC — Faced with their first major budget shortfalls since the November 1998 state tobacco settlement, states are cutting already underfunded tobacco prevention programs by $102.3 million, or 13.3 percent, in Fiscal Year 2003, according to a report issued today the American Lung Association, American Cancer Society, American Heart Association and Campaign for Tobacco-Free Kids. Some of the deepest cuts are occurring in states with the nation’s oldest and most successful tobacco prevention programs – Arizona, which cut prevention funding in half, and California and Massachusetts, which are in the process of enacting cuts amounting to 45 percent and 35 percent of their respective tobacco prevention budgets.
July 2002 Mid Year Update
Complete Report (468k .pdf)
Table: History of State Settlement Spending for Tobacco Prevention (33K .pdf)
Table: Rankings of State Funding for Tobacco Prevention (19K .pdf)
Use the dropdown to see state-specific settlement information:
On the positive side, the report identified several states, including Indiana, Maine, Maryland, and New Jersey, that have emerged as "the nation’s new leaders in tobacco prevention" by maintaining and even increasing funding for tobacco prevention despite the current budget crisis.
"It is bad enough that even before the current budget crisis few states were keeping their promise to use tobacco settlement dollars to reduce death and disease caused by smoking. It is tragic that states are further reducing their commitment just as we have developed conclusive evidence that tobacco prevention works," said John L. Kirkwood, CEO of the American Lung Association. "Tobacco prevention will help smokers quit and protect young people from lung cancer and other devastating health problems in the future. Now is the time to act."
"We are turning into a nation of haves and have-nots with regard to tobacco prevention programs and the health and fiscal benefits they deliver," said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids. "Those states that are choosing wisely to invest in tobacco prevention despite tight budgets will reap the benefits of reduced smoking among kids, lives saved and taxpayer dollars saved by reducing smoking-caused health care costs. Those states that make shortsighted decisions today to cut funding for prevention will pay a steep price tomorrow in lives lost and dollars spent."
The new report’s key findings are as follows:
Based on their latest budgets, the states will spend a total of $666.1 million on tobacco prevention in FY2003, down from $768.4 million in FY2002. This amounts to a cut of $102.3 million, or 13.3 percent. (California, Kentucky and Massachusetts are still finalizing their budgets – the estimates in the report are based on tobacco prevention funding contained in their latest budget proposals.)
Fifteen states are cutting their tobacco prevention programs. These cuts total $167.6 million.
Eighteen states have increased funding for tobacco prevention, but the increases are much smaller than the cuts that other states have made and total $65.3 million. In several of these states, deepening budget woes are threatening the promised increases in prevention spending.
At least 15 states and the District of Columbia have sold ("securitized") all or part of their future tobacco settlement payments to investors in return for a much smaller lump-sum payment up front, or have passed laws to enable the state to do so. Selling off future settlement funds reduces or eliminates the amount of settlement money available to fund tobacco prevention.
Only four states – Maine, Minnesota, Mississippi and Maryland – currently fund tobacco prevention programs at the minimum levels recommended by the U.S. Centers for Disease Control and Prevention (CDC) – usually 20 to 25 percent of a state’s settlement proceeds. Twelve more states have committed at least 50 percent of the CDC minimum (substantial funding); 17 states have committed 25 to 50 percent of the CDC minimum (modest funding); 14 states have committed less than 25 percent of the CDC minimum (minimal funding); and three states – Michigan, Missouri, and Tennessee – and the District of Columbia have committed none of their settlement money or other major funding source for tobacco prevention.
"It's robbing Peter to pay Paul," said John R. Seffrin, PhD, chief executive officer of the American Cancer Society. "Tobacco prevention and cessation programs can cut tobacco use and cut health care costs. More
importantly, they can save lives, but these programs can't work if they aren't given a chance to succeed. In the long run, states are only hurting themselves."
The states are scheduled to receive $246 billion in tobacco settlement payments over 25 years. The payments this year alone are expected to total $8.9 billion.
The report lists eight states as the "Most Disappointing of 2002" for significantly cutting funding for tobacco prevention: Arizona, California, Massachusetts, Illinois, Iowa, Missouri, Nebraska and Oregon.
The report praises several states as "the nation’s new leaders in tobacco prevention" including:
Maine, which increased funding for tobacco prevention this year and ranks first in the nation in its funding of tobacco prevention based on the CDC guidelines
New Jersey, which increased its cigarette tax by 70 cents – the largest increase among 17 states that have increased cigarette taxes this year – and committed to using some of the new revenue to boost prevention spending to the CDC minimum level
Indiana, which resisted tremendous budgetary pressures and did not cut funding for its newly launched prevention program. Indiana also increased its cigarette tax by 40 cents a pack.
Maryland, which restored funding for tobacco prevention to $30 million, the CDC minimum, after settling a dispute over attorneys’ fees related to its settlement. Maryland also increased its cigarette tax by 34 cents.
The report details the powerful evidence that comprehensive tobacco prevention programs work to reduce smoking, save lives and save money for taxpayers. This evidence includes Florida, which cut smoking by 47 percent among high school students and 30 percent among middle school students between 1998 and 2001; Oregon, which cut smoking by 41 percent among eight graders between 1996 and 2000; Maine, which cut high school smoking by 36 percent from 1997 to 2001; and Mississippi, which cut public high school smoking by 25 percent from 1999 to 2001. Studies show that California, which started the nation’s oldest tobacco prevention program in 1990, has saved tens of thousands of lives by reducing smoking-caused birth complications, heart disease, strokes and lung cancer. Massachusetts and California are saving up to $3 in tobacco-caused health care costs for every dollar spent on prevention.
"Even in these difficult budget times, tobacco prevention is one of the smartest and most fiscally responsible investments that states can make," the report concludes.
Tobacco use is the leading cause of preventable death in the United States, killing more than 400,000 people every year. The annual cost of treating smoking-caused disease exceeds $75 billion. Every day, another 2,000 kids become regular, daily smokers, one-third of whom will die prematurely as a result.