Tobacco Companies Spend $23 to Market Products For Every $1 States Spend on Tobacco Prevention, Report Finds

States Fail To Adequately Fund Prevention Despite Collecting Record Tobacco Revenues

Dec. 2 2004

 

Washington, DC — Tobacco companies spend more than $23 to market cigarettes and other tobacco products in the United States for every dollar the states spend on programs to protect kids from tobacco, according to a report released today by a coalition of public health organizations.

The annual report, which assesses whether states are keeping their promise to use proceeds from the 1998 state tobacco settlement to fund tobacco prevention and cessation programs, found that only three states – Maine, Delaware and Mississippi – currently fund tobacco prevention programs at minimum levels recommended by the U.S. Centers for Disease Control and Prevention (CDC). Thirty-seven states and the District of Columbia fund such programs at less than half the CDC’s minimum level or provide no state funding at all.

The states have cut funding for tobacco prevention programs by 28 percent over the last three years and collectively have budgeted $538 million for tobacco prevention this year, which is only a third of what the CDC recommends. In contrast, tobacco companies have increased their annual marketing expenditures to a record $12.7 billion a year, according to the Federal Trade Commission’s most recent reports on tobacco marketing. This amounts to more than 23 times what the states spend on tobacco prevention.

The tobacco companies spend more on marketing in a single day – at least $34 million – than 46 states and the District of Columbia spend in an entire year on tobacco prevention. Tobacco companies spend more in a single hour – $1.4 million – than nine states and DC spend on tobacco prevention annually.

States have cut funding for tobacco prevention despite collecting a record $20 billion this year in tobacco-generated revenue from the tobacco settlement and tobacco taxes, according to the report. State tobacco revenues have skyrocketed because 38 states and DC have increased tobacco taxes in the past three years, some more than once. It would take just eight percent of the states’ total tobacco revenue to fund tobacco prevention programs in every state at CDC-recommended levels.

The report, “A Broken Promise to Our Children: The 1998 State Tobacco Settlement Six Years Later,” was released by the Campaign for Tobacco-Free Kids, American Heart Association, American Cancer Society and American Lung Association.

“This report shows that the states’ efforts to protect our kids from tobacco have failed to keep up with the record growth in the tobacco industry’s marketing of its deadly and addictive products,” said William V. Corr, Executive Director of the Campaign for Tobacco-Free Kids. “It’s simply shameful that the tobacco companies spend more in a single day to market their products than 46 states and DC spend in an entire year on tobacco prevention. The states lack excuses for their failure to do more because they have more tobacco revenue than ever to do the job and more evidence than ever that tobacco prevention programs work to reduce smoking, save lives and save money by reducing smoking-caused health care costs.”

“The flu vaccine shortage has been in the headlines, but there’s also a shortage of another vaccine, that being the dollars the states have invested in tobacco prevention programs that can break the cycle of addiction,” said M. Cass Wheeler, CEO of the American Heart Association. “Tobacco is the single greatest cause of preventable deaths in the United States each year. It’s time that the states kept their promises and vaccinated against tobacco use.”

“This report shows a missed opportunity for states to save money and, more importantly, lives,” said John R. Seffrin, PhD, Chief Executive Officer of the American Cancer Society. “Studies show that comprehensive tobacco prevention and control programs work, but only if they are adequately funded. It is a long-term investment to prevent death and disease and reduce billions of dollars spent treating tobacco related illnesses. The states can and must do better.”

"Despite growing evidence that successful tobacco prevention programs reduce both youth and adult smoking rates, it is appalling that so many states continue to cut or severely under-fund those programs. Such action is shortsighted. Tobacco control is a sound investment for the future and one of the surest ways to protect health and cut health care costs. Funding prevention programs makes both good health sense and good fiscal policy," said John L. Kirkwood, President and CEO of the American Lung Association.

While giving most states a failing grade, the report praises several states for maintaining and even increasing funding for tobacco prevention. Maine and Mississippi are funding prevention programs at CDC-recommended levels for the sixth year in a row, Delaware is doing so for the second year in a row, and North Carolina and Ohio have significantly increased funding for tobacco prevention in the past year. Voters in Colorado and Oklahoma approved cigarette tax increases and dedicated some of the revenue to tobacco prevention, while Governor Frank Murkowski and the Legislature did the same in Alaska.

In contrast, several states that once had some of the nation’s most successful tobacco prevention programs, including Florida, Massachusetts and Oregon, have yet to restore funding after budget cuts decimated their programs. Even California, the nation’s tobacco prevention pioneer, has cut funding for its program to less than half the CDC’s recommended level.

States that have properly funded tobacco prevention programs have produced dramatic declines in tobacco use. Maine reduced smoking by 48 percent among high school students and 59 percent among middle school students between 1997, when it launched its tobacco prevention program, and 2003. Mississippi reduced smoking by 48 percent among public middle school students and 29 percent among public high school students between 1999 and 2002. Studies show California’s program, started in 1990, has helped save tens of thousands of lives by reducing smoking-caused heart disease, lung cancer and other diseases. Studies show California and Massachusetts, before recent cuts in their programs, were saving as much as $3 in smoking-caused health costs for every dollar spent on tobacco prevention.

The multi-state tobacco settlement, signed by 46 states and the major tobacco companies on November 23, 1998, requires the tobacco companies to make annual payments to the states in perpetuity as reimbursements for health care costs related to tobacco use. Four states – Mississippi, Texas, Florida and Minnesota – reached earlier, individual settlements. Payments under the settlements were estimated to total $246 billion over the first 25 years.

The settlement also banned or restricted some forms of tobacco marketing, including billboard and transit advertising, the use of cartoon characters, and event sponsorships. However, these restrictions affected less than 20 percent of tobacco marketing at the time of the settlement, and the tobacco companies since have increased marketing expenditures by 84 percent to more than $12.7 billion a year, according to the FTC. More than two-thirds of cigarette marketing is spent on price discounts, which have the greatest impact on kids, who are the most price-sensitive customers. Other recent tobacco marketing campaigns also show a continued effort to target children, including a proliferation of candy-flavored cigarettes such as flavors of R.J. Reynolds’ Camels with names like Winter Toffee, Winter MochaMint and Twista Lime.

Tobacco use is the nation’s leading preventable cause of death, killing more than 400,000 people and costing more than $75 billion in smoking-caused health care bills every year. Nearly 90 percent of all smokers start at or before age 18. Every day in the U.S., another 2,000 kids become regular smokers, one-third of whom will die prematurely as a result. While we have made progress in reducing youth smoking in recent years, 21.9 percent of high school students still smoke, according to the CDC.

The full report, including state-specific information, is at www.tobaccofreekids.org/reports/settlements. A chart ranking the states based on their funding for tobacco prevention is attached.

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December 2004 Report

State Summaries

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