Monday, March 13, 2006

Utah's Budget Director Admits States are Addicted to Tobacco Money Due to Master Settlement Agreement

In a rare display of telling it like it is, the budget director for the state of Utah admitted that the states are addicted to tobacco money because of the Master Settlement Agreement (MSA), which is providing states with payments based on the volume of tobacco sales, and therefore provides an incentive for them not to reduce cigarette consumption too much. The statement was made in the context of discussion over the threatened loss of tobacco company payments to the states under the MSA because of the non-participating manufacturer adjustment provision.

According to an article in the Deseret News: "Record-low cigarette sales in the United States could mean less money coming to the states through payments from big tobacco manufacturers, although how much and when the states would take the hit remains uncertain. ... The states' lawsuit against tobacco makers originally sought to stop deceitful advertising practices and the marketing of tobacco products to children. And while many Americans may have kicked the tobacco habit, Ellis [Utah's budget director] said, many states have not. 'We've become addicted to the tobacco money,' he said."

The Rest of the Story

For the first time in a long time, there is no rest of the story. The Utah budget director has told it like it is and called a spade a spade. It is refreshing to see a government official tell it like it is. The truth is that the states have become addicted to tobacco money, through the ingenious scheme that is the MSA. And that addiction is going to be harder to break than quitting smoking itself.

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