Don't raid tobacco fund
POSTED: Friday, April 24, 2009
Despite overwhelming opposition in testimony, Hawaii legislators appear set on diverting money from states' 1998 national settlement with tobacco companies in order to help balance the budget. The factually based warning that such a diversion would be penny-wise and pound-foolish — costing more in health care than that saved from reduced smoking — appears to have fallen on deaf ears.
“;During these difficult times and considering the grave fiscal condition we are facing, all options must be kept open,”; Georgina K. Kawamura, the state budget and finance director, explained to a House committee regarding the prospect of shifting $7 million in tobacco-settlement money to other uses.
The state receives more than $53 million a year from Big Tobacco and nearly three-fourths of it has been going to quit-smoking activities, the state Department of Health and the University of Hawaii's School of Medicine, while 24.5 percent goes to the state's rainy-day fund. Under the proposal headed for legislative approval, 54 percent would go to the rainy-day fund or state activities unrelated to smoking.
Other states have taken similar action in recent years and have suffered the consequences:
» After California's anti-tobacco program launched in 1999 had reduced smoking, funding cuts in 2003 were followed by an increase in high-school smoking rates. Every dollar California spent on anti-smoking programs has reduced smoking-caused costs by $3.60, according to the American Heart Association.
» Smoking rates in Indiana increased after funding of tobacco-prevention programs were cut by 70 percent in 2006, according to the Coalition for a Tobacco-Free Hawaii.
» In Massachusetts, a 2000 report by a Massachusetts Institute of Technology economist estimated that the state's anti-smoking program has reducing smoking-caused health-care costs by at least $2 for every dollar spent.
Some of the negative effects of such a diversion of funds may be offset by increased taxes on cigarettes. The federal tax on cigarettes rose to $1.01 a pack last month, and the Hawaii Legislature appears headed toward approval of state tax hikes on cigarettes scheduled through 2011. Yearly increases pegged at 20 cents a pack — totaling 60 cents — would amount to a total increase of $1 by July 2011, bringing the tax to $3 a pack.
The tax increases could help offset the reduction in funding for the anti-tobacco campaign. The Centers for Disease Control and Prevention estimates that a 10 percent increase in cigarette prices reduces consumption by 3 percent to 5 percent and discourages young people from becoming addicted.
Of course, the tax increases combined with an active campaign against smoking would be even more effective.