According to an article in the Scranton Times-Tribune, declines in smoking are resulting in health insurance cuts for low-income Pennsylvanians, due to reduced tobacco settlement payments to the state as a result of the lower cigarette consumption.
According to the article: "Pennsylvania received a significantly smaller payment from tobacco companies this year, and that has led to funding cuts for some state programs dependent upon tobacco money. The state Tobacco Settlement Fund received nearly $66 million less than in 2009. Activists attribute this to a marked decline in public smoking, while state officials say part of the drop is attributable to the absence of a one-time payment that temporarily boosted the total payment in 2009. The result of the mix of factors at work is that a half-dozen state programs designated to receive tobacco money have less funding under the new state budget just when finances are especially tight because of the recession. For example, the adult Basic program for low-income adults who lack health insurance receives $10.8 million in tobacco money this year, down two-thirds from $36.6 million in 2009-10, according to the House Appropriations Committee and governor's budget office."
Thus, the health insurance program for low-income adults who lack health insurance is suffering about a $26 million cut this year due to the decreased tobacco settlement payment.
This problem is not unique to Pennsylvania. According to an article at Stateline.org, the states as a whole will see their tobacco settlement payments reduced by a whopping 16% this year, largely due to the decline in cigarette consumption attributable to the large federal cigarette tax increase.
The Rest of the Story
This is exactly what I warned about in numerous commentaries criticizing the unqualified support of anti-smoking groups for cigarette tax increases, regardless of how the revenues are spent. It is thanks to these groups that the low-income population of Pennsylvania (and many other states) are going to suffer from dramatic budget cuts, affecting everything from health care to human services programs.
It is one thing when cigarette tax revenues are allocated toward anti-tobacco programs. As smoking declines, so do the revenues, but that is appropriate as fewer people are smoking so fewer people need to be reached by the programs. As Bill Godshall points out in the Times-Tribune article: "It's one of the few government programs set up to put itself out of business if the problem goes away."
This is not true, however, of other programs such as health care and human services. These problems do not go away as smoking declines and people reliant upon such programs are truly going to be hurt because of the anti-smoking groups' support for the idea of depending upon cigarette consumption to fund critical government programs.
A related problem is that these same policies have resulted in states becoming dependent upon maintaining current levels of cigarette consumption. The incentive to take any action that would seriously threaten cigarette sales is gone, as it would result in decreased payments to the states, and therefore, in funding cuts for critical programs. Perhaps this is why so many states are jumping at the opportunity to outlaw electronic cigarettes, as they threaten to take away sales from the cigarette companies. Apparently, it is better that smokers continue to use the most dangerous nicotine-delivering product - but in a way which funds the state - rather than quit smoking and substitute a much safer product, but one from whose sale the state loses financially.