Ten Years up in Smoke

The Robert Wood Johnson foundation reminds us of the tenth anniversary this week of the Master Settlement Agreement in which state attorneys general (including Iowa's) agreed to settle pending lawsuits with the tobacco companies in exchange for significant payments into perpetuity.

Most of those payments were securitized, meaning the state took a "lump sum" up front to represent the future value of payments from the MSA.

Check out the results:

In the last 10 years, the states have spent just 3.2 percent of their total tobacco-generated revenue on tobacco prevention and cessation programs. From Fiscal Year 2000 to the current Fiscal Year 2009, the states have received $203.5 billion in tobacco revenue – $79.2 billion from the tobacco settlement and $124.3 billion from tobacco taxes. During this time, the states have allocated $6.5 billion to tobacco prevention and cessation programs (states have utilized both tobacco settlement and tobacco tax revenues to fund tobacco prevention programs, and this report includes both sources of funding).

Kinda makes you wonder who won in this deal. Its still a huge amount of money paid out by the tobacco companies, but the vast majority are still in business, and the states are finding themselves with no money left and still having an obligation to treat sick smokers.

Policymakers in Iowa made the decision to securitize with open eyes in a tough budget cycle in the early part of this decade. It was a conservative Republican legislature that made the decision. For those new to politics, those used to be the ones who would watch taxpayer dollars closely. I wonder if anyone will have the guts now to tell people all the money's gone and we need more for cessation and treatment.