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Cigarette Taxes and State Spending

A plan to raise state cigarette taxes in California to pay for preschools raises questions: Do states really want to depend on tobacco taxes to raise money for critical ongoing needs?

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SCOTT SIMON, host:

Have the state governments that received huge cash settlements from US tobacco companies developed a habit almost as addictive as smoking? In 1998, tobacco companies agreed to pay 35 states and the District of Columbia $206 billion, and the representation that the money would be spent to care for those who had been hurt by smoking and on educational programs to prevent more people from harming themselves. Many states went further, adding new taxes on tobacco. The amount of money available to the states this year alone is $21.3 billion. But a study issued this week by groups that include the American Cancer, Heart and Lung Association says the states have spent only a fraction of that money, $500 million, on caring for the lung cancer and heart patients or anti-smoking campaigns. Michigan, Missouri, New Hampshire, South Carolina, Tennessee and the District of Columbia have spent nothing on anti-smoking efforts.

How have the states spent those billions? To cover deficits in their budgets, on things like road construction, bridge repair and other items they don't want to pay for by raising taxes. There is no clear party line on this pattern of spending. Some of the states have Democratic governors or legislatures. Some are Republican. All politicians like to claim they balance the budget. All politicians like to spend money on roads, bridges and the people who build them. No politician likes to raise taxes.

There's a proposal in California to raise the tax on cigarettes to $1.50 a pack. Even as the petitions to place the proposal on a ballot circulated, debate has broken out over how the money raised will be spent. One group wants to use it to supplement treatment in hospital emergency rooms. Another wants to use it to provide care to children who do not have health coverage. Still, others warn that if cigarettes cost too much more money the state will just get less revenue because fewer people will buy them. Wasn't that the original idea of cigarette taxes, to discourage smoking? Does any state really want to make emergency room treatment or the health care of poor children depend on people buying more cigarettes?

Any adult who smokes in 2005 must know the damage he risks to his own health. There are big blaring warnings on each pack. Most everyone knows someone who's developed cancer from smoking. But I have never known a smoker who recommends smoking cigarettes to others or who wants his or her children to smoke. On the contrary. But the states who are enriched by the tobacco settlement of 1998 and pledged to protect their citizens from the damage of cigarettes now have an investment in people buying cigarettes. Maybe smokers can tell them how hard bad habits are to kick.

And it's 18 minutes past the hour.

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Simon SaysSimon Says NPR's Scott Simon Shares His Take On Events Large And Small
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