Rather than spend the money on tobacco-related programs, as it was originally intended, most states have been diverting money from the Master Settlement Agreement to fund other essential government programs, plugging budget shortfalls and avoiding having to find other sources of revenue. As a result, I have been arguing that the Master Settlement Agreement was a public health disaster because it tied state fiscal solvency to continued high levels of cigarette consumption. If cigarette consumption falls substantially, then funding for essential government programs evaporates.
Yesterday, the Kansas City Star reported that the bulk of funding for early childhood programs in Kansas may go up in smoke because of an expected decrease in cigarette company revenues from the Master Settlement Agreement.
According to the article: "The Kansas Children's Cabinet and Trust Fund, which promotes
early-childhood programs in the state, has been warned that it could
lose up to 75 percent of its budget next year because of a drop in money
from a national lawsuit against tobacco companies. Amanda Adkins,
chairwoman of the cabinet, told the board Wednesday to prepare two
recommendations — one that would assume the group would continue to
receive $56 million in tobacco funds, with a second assuming it would
receive only $12 million, The Topeka Capital-Journal reported. "That is just the hard reality in which we find ourselves," Adkins said. Kansas
and 30 other states are currently in arbitration over provisions in the
tobacco case settlement, leading to speculation that funding for the
trust will be cut." ...
"The cabinet receives its funding from a 1998
settlement with major tobacco companies. One of the provisions of that
settlement required states to force smaller cigarette manufacturers to
pay a $6 per carton fee to keep them from undercutting the bigger
companies. The major manufacturers contend the states haven't enforced
that agreement."
The Rest of the Story
This story illustrates the brilliance of the Master Settlement Agreement
(from the perspective of the cigarette companies). The states are now
fiscally dependent on a steady stream of cigarette revenues. Any
substantial drop in cigarette smoking threatens the state's fiscal
situation. Thus, there is no incentive to take any action that will
substantially reduce cigarette sales. Perhaps this is why we haven't
seen many major anti-tobacco initiatives at the state level since the
Master Settlement Agreement was signed. We've seen mostly minor
initiatives that dilly dally around the margins, but very few which
actually aim to put a major dent in cigarette sales.
Big Tobacco could not have scripted a happier (more favorable) ending to
the Master Settlement Agreement saga. If they had sat down and tried to
figure out a way to institutionalize tobacco consumption and to find a
way to make the states become dependent upon tobacco sales for their
economic survival, they could not have come up with a better scheme than
this.
Out of their greed for political and economic gain, the Attorneys
General have done a tremendous service for the tobacco companies. They
have created a financial partnership between their states and Big
Tobacco, by which the fiscal solvency of the states depends on continued
high levels of cigarette consumption. They have destroyed the incentive
for states to take any action that might substantially reduce cigarette
use.
This explains why so few states are running effective tobacco control
programs, why so few states are allocating their MSA money to
anti-tobacco programs, and why Congress (aiming to protect the states
they represent) crafted tobacco legislation that does very little to
actually make a dent in cigarette consumption
In direct
contrast to what the Attorneys General predicted, the Marlboro Man isn't
riding into the sunset on Joe Camel. Instead, they're both having a
beer and a good laugh together as they enjoy their trip to the bank.
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