Tobacco Settlement Perennially Validates the Wisdom of General Harshbarger

Friday, January 29, 2016

Back in the early-Nineties, 46 attorneys general brought a massive lawsuit against the largest U.S. tobacco companies to recover costs incurred by states in caring for persons afflicted with smoking-related illnesses over a period of many decades.  We the taxpayers are fortunate they did. 

Under the terms of the 1998 “Master Settlement Agreement” of that suit, the states collectively have since received in excess of two hundred billion dollars: $200,000,000,000!
That money continues to flow at astonishing levels:  during the current fiscal year, the states will derive approximately $7 billion from the settlement.  Massachusetts alone will get over $200 million. 

What continues to astonish, as well, is the harm caused by tobacco: smoking will kill more than 480,000 Americans and smoking-related illnesses will necessitate health care spending of approximately $170 billion this year.  
In Massachusetts, 16.6% of adults still indulge in the nicotine habit.  That number ties us with New York as the states with the 11th lowest smoking rate in the U.S.  Utah has the lowest rate, 10.3%, and Kentucky the highest, 26.5%

Here’s something we chin-rubbers of the political persuasion seldom consider: the debt all Massachusetts taxpayers owe to Scott Harshbarger, our attorney general from 1991 through 1998.
Harshbarger was in the coterie of attorneys general who conceived of and organized the suit versus the tobacco companies and helped to turn the case into a juggernaut by bringing so many other AGs on board.    

As discussed in a previous post, we at Preti Strategies once had a client, Dr. Robert Berger, who wanted to use a relatively small portion of the state’s tobacco settlement dollars, one time only, on a clinical trial of the effectiveness of lung volume reduction surgery.  See:

That proposal failed due mainly to the opposition of those wanting to spend the lion’s share of those dollars on smoking prevention and cessation programs.  We had no choice but to drop the idea and move on.  
The overall debate on how best to use the settlement in Massachusetts, however, has never ended.

One on side have been the governor and a majority of legislators, who each year have favored putting most of the money in the state’s general fund, where it can help defray the enormous and ever-growing costs of running the Medicaid program. 
On the other side have been the Centers for Disease Control (CDC), the Tobacco Free Kids organization, and an assortment of well-grounded, passionate health advocacy groups, who want tens of millions taken from the settlement every year and spent directly on smoking prevention and cessation.

The CDC says Massachusetts should be spending roughly $67 million a year on prevention/cessation.  Advocates use the CDC number as a rallying point every budget season (February through June) on Beacon Hill.
In the current state budget, $3.9 million is set aside for prevention/cessation, only 5.8% of what the CDC says is required to protect the citizens of Massachusetts, especially children, from cigarettes and other tobacco products.

Over the years, Massachusetts has spent as much as $50 million on prevention/cessation (FY 2001) and as little as $2.5 million (FY 2004).
When Governor Charlie Baker filed his proposed FY 17 state budget this week, he level funded prevention/cessation at $3,866,096.  Neither the House nor the Senate, I predict, will change that figure much when they take their turns at bat in the budget formation contest.

Here’s a concluding bit of relevant data:  in Gov. Baker’s FY 17 budget, total spending on MassHealth, the name we give to Medicaid hereabouts, is pegged at $15.4 billion, which is nearly 40% --and by far the largest single spending category -- of his $39.6 billion budget



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