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New Report: States Cut Funding for Tobacco Prevention Programs Despite Receiving Record Amounts of Tobacco Revenue

December 10, 2009

Washington, D.C. — The states are collecting record amounts of revenue from the 1998 tobacco settlement and tobacco taxes, but have cut funding for programs to reduce tobacco use by more than 15 percent in the past year, according to a report released today by a coalition of public health organizations.

With the nation's adult smoking rate stalled after decades of decline, the report warns that continued progress is at risk unless states significantly increase funding for programs to prevent kids from smoking and help smokers quit. The report also calls on Congress to ensure that health care reform legislation includes adequate funding for disease prevention initiatives, including tobacco prevention and cessation, and mandates coverage in Medicaid and other health insurance programs for smoking cessation medication and counseling.

The report, titled 'A Broken Promise to Our Children: The 1998 State Tobacco Settlement 11 Years Later,' was released by the Campaign for Tobacco-Free Kids, American Heart Association, American Cancer Society Cancer Action Network, American Lung Association and Robert Wood Johnson Foundation. These organizations have issued annual reports assessing whether the states have kept their promise to use funds from the state tobacco settlements — estimated to total $246 billion over the first 25 years — to fight tobacco use. The states also collect billions more each year from tobacco taxes.

Key findings of this year's report include:

  • The states this year (Fiscal Year 2010) will collect $25.1 billion in revenue from the tobacco settlement and tobacco taxes, but are spending just 2.3 percent of it — $567.5 million — on tobacco prevention and cessation programs (the states also receive $62 million in federal grants for tobacco prevention, for total funding of $629.5 million). With more states expected to increase tobacco taxes in the coming year, that revenue figure is certain to increase.
  • In the past year, states have cut funding for tobacco prevention by $103.4 million, or 15.4 percent. Including cuts approved just last week, New York made the largest cut — $25.2 million, or 31 percent — despite having a successful program that has reduced smoking to well below national rates. Other states with large cuts include Colorado, Maryland, Pennsylvania and Washington.
  • Only one state — North Dakota — currently funds a tobacco prevention program at the level recommended by the U.S. Centers for Disease Control and Prevention (CDC). Only nine other states fund tobacco prevention at even half the CDC-recommended level, while 31 states and DC provide less than a quarter of the recommended funding.
  • Tobacco companies spend $20 to market tobacco products for every one dollar the states spend to fight tobacco use. According to the latest data from the Federal Trade Commission, tobacco companies spend $12.8 billion a year on marketing.

The report comes as recent surveys have found that smoking declines in the United States have slowed and even stalled. The CDC in November reported that the adult smoking rate in 2008 was 20.6 percent — essentially unchanged since 2004 when 20.9 percent smoked. While smoking among high school students has declined by 45 percent from a high of 36.4 percent in 1997, 20 percent of high schoolers still smoke and declines have slowed in recent years.

'To continue reducing tobacco use, elected officials at all levels must resist complacency and redouble efforts to implement proven strategies,' said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids. 'Despite their current budget challenges, the states lack excuses for failing to do more. They are collecting record amounts of tobacco money, more of which should be used to fight the tobacco problem. And there is overwhelming evidence that tobacco prevention programs not only reduce smoking and save lives, they also save money by reducing tobacco-related health care costs. Those states that make short-sighted decisions to cut tobacco prevention will pay a steep price in lives and dollars.'

'The inadequate funding of tobacco prevention and cessation programs is a powerful example of misplaced priorities in our nation's health care system,' said Risa Lavizzo-Mourey, M.D., M.B.A., President and CEO of the Robert Wood Johnson Foundation. 'We spend too much on treating people after they get sick and too little on keeping them healthy in the first place. Investing more in proven tobacco prevention programs and policies, like smoke-free restaurants and workplaces, will help people lead healthier lives and reduce health care costs.'

'There is absolutely no question that the devastating toll and financial burden of tobacco use is a huge drain on our nation's economy and contributor to spiraling health care costs,' said Nancy Brown, CEO of the American Heart Association. 'It's a travesty that only a small fraction of tobacco settlement funds is actually being used to support tobacco prevention programs in states. If we allow this to continue, how can we expect to ever realize the true potential of settlement dollars to save lives and improve the physical and economic health of this country.'

'Fully funded tobacco prevention and cessation programs stop addiction before it starts and improve the health of our nation's communities,' said John R. Seffrin, PhD, chief executive officer of the American Cancer Society Cancer Action Network (ACS CAN), the advocacy affiliate of the American Cancer Society. 'States must do better at funding programs that help reduce tobacco use and protect the health of children, 3,500 of whom try their first cigarette every day.'

'As more states are turning to tobacco taxes to help during these difficult economic times, states need to spend a portion of the revenue on tobacco prevention and control programs — especially those programs to help smokers quit,' said Charles D. Connor, American Lung Association President and CEO. 'Increasing tobacco taxes is a proven and effective way to reduce the number of adults and youth who smoke, but as they make tobacco products more expensive states also have a responsibility to ensure that the nearly 46 million smokers in this country have the help they need to quit.'

The report cites conclusive evidence that tobacco prevention and cessation programs work to reduce smoking, save lives and save money. Maine, which has long had one of the best-funded programs, has reduced smoking by 71 percent among middle school students and by 64 percent among high school students since 1997. Washington state, before cutting its program by 42 percent this year, reduced adult smoking by 30 percent and youth smoking by 50. An August 2008 study found that California's tobacco control program, the nation's longest-running, saved $86 billion in health care costs in its first 15 years, compared to $1.8 billion spent on the program, for a return on investment of nearly 50:1.

Tobacco use is the leading preventable cause of death in the U.S., killing more than 400,000 people and costing $96 billion in health care bills each year. Every day, another 1,000 kids become regular smokers — one-third of them will die prematurely as a result.