Blair Horner: NY State Shortchanges Tobacco Control | WAMC

Blair Horner: NY State Shortchanges Tobacco Control

Aug 10, 2020

It is well established that tobacco use addicts and kills.  For decades, the power of the tobacco industry blocked measures that would have protected the public’s health and saved lives.  That power ebbed in the late 1990s as states’ attorneys general brought legal actions.  At the heart of the litigation was the charge that the tobacco companies deliberately misled the general public, and specifically smokers, about the dangers of their products.  As a result, more people smoked, more people got sick, and the states had to pick up additional – and significantly higher – health care costs, particularly through the Medicaid program.  Medicaid offers health insurance for the poor and states’ pick up much of the tab. 

As the evidence piled up, the legal strategies of Big Tobacco weakened and the industry’s concern over losing a gigantic legal verdict forced the tobacco companies to cut a deal.

That deal, known as the Master Settlement Agreement, resulted in the states dropping their legal claims if the industry made marketing changes and paid the states hundreds of billions of dollars over the next few decades to compensate them for the health care costs resulting from the misery of sick smokers.

New York was a party to that agreement and at that time heralded the MSA as a way for the state to have new resources for health care and financing to keep children from starting to smoke and to help smokers to quit.

A report released this week examined the financial impact of the MSA on New York and concluded that the state shortchanges its programs to keep children from using tobacco products and to help smokers to quit.  According to the New York Public Interest Research Group (NYPIRG), the state has collected over $40 billion from tobacco taxes and revenues from the MSA.  As part of that agreement, the tobacco industry has paid the state over $16 billion over the past twenty years. 

Despite promises to use a significant portion of the revenues for tobacco control programs, the state spends far less than recommended by the federal government and, when accounting for inflation, spends less today than it did two decades ago on the program.

The report, Falling Short, reviewed the revenues collected by New York State and its spending on tobacco control.  The report found:

  • New York State has received over $16 billion in tobacco revenues from the MSA since it went into effect in 1999.
  • New York has collected over $24 billion in tobacco taxes and fees since the MSA went into effect. Combined with tobacco revenues from the MSA, New York has collected over $40 billion.
  • Despite this windfall, New York spends less today (adjusted for inflation) on its state tobacco control program than ever. During the years of the Cuomo Administration, the program has suffered significant budget cuts and is now spending less than half of what it did ten years ago.
  • While the state has added responsibilities to monitor vaping use, it has failed to provide additional resources for these activities. This is true despite the availability of millions of dollars in new revenues generated by a tax on vaping products.
  • Flavored tobacco products, like their vaping cousins, are designed to entice youth to a deadly addiction.  A loophole in federal law allows the sale of menthol flavored cigarettes and the current federal restriction does not cover flavored cigarillos, chewing, and cigar tobacco products. While New York now prohibits the sale of flavored vaping products, it has not banned the sale of flavored tobacco.

Time has eroded the health and financial benefits of the state’s tobacco tax rates due to inflation. The state’s cigarette tax (and little cigar tax) has remained unchanged over the past decade. Other tobacco taxes have not changed and are lower than those found on cigarettes. /p>

In the report, NYPIRG recommended:

  • New York should increase its commitment to tobacco control efforts by following the recommendations of the U.S. Centers for Disease Control and Prevention’s (CDC) guidelines; it recommends the state spend at least $140 million annually.
  • Given its added responsibilities, additional resources (beyond the amount recommended by the CDC), should be added to ensure adequacy in tackling the vaping epidemic.
  • For the same reasons that the state banned the sale of flavored vapes, it should prohibit the sale of flavored tobacco products.
  • The state’s cigarette and little cigar tax should be raised $1 and other tobacco products should be taxed at equivalent rates. The state should embrace new tax stamp technologies and bolster tax enforcement efforts to crack down on illegal untaxed sales.

As New York State grapples with a new public health crisis and the devastating financial impact that the COVID-19 pandemic has inflicted, it is critical that it devote resources to successful public health programs.  Boosting the state’s tobacco taxes and earmarking more for the biggest cancer killer – tobacco – are decisions that should be included when lawmakers return to balance the state’s budget.

Blair Horner is executive director of the New York Public Interest Research Group.

The views expressed by commentators are solely those of the authors.They do not necessarily reflect the views of this station or its management.