Smokers- ? Heroes that balance the budget

[Donna G]

Here in Minnesota we have a strong organization called MPAAT, Minnesota Partnership against Tobacco, that are organized to stop smoking in this state. They put ads on TV , dramas, that picture the a father's smoke going down the hall and strangeling his baby in the crib etc.

We also have a governor who promised not to raise taxes.

So he put a "fee" of $.75 per pack on cigarettes.

We also won a huge suit against the tobacco companies (which they use to build state highways and the rest goes into the general fund). I hear part of that suit said Minnesota could not collect more at the expense of the tobacco companies. Well they are taking the state to court because of this "fee".

The cry this morning on the TV was "We will loose $401 Billion dollars in revenue and will not be able to balance the budget!"

To me that means they are counting on selling at least 534,666,666 packs of cigarettes. If they smoke a pack of cigarettes a day , 1,464,821 people , smokers in Minnesota are responsible to light up and balance our state Budget!

[SDianneB]

That never makes much sense to me either. It used to be called "sin taxes" -- beer, alcohol, cigarettes, etc. Seems to me that if the objective is a smoke-free society, then adding taxes to it and then counting on that money is counterproductive.

Also, taking these things to court - especially federal court - more or less pulled them outside the jurisdiction of the states in many cases.

I don't oppose the taxes, but the objective should be to try and stop people from smoking, not sell more cigarettes in order to raise more $$.

Oh well. A financial wizard I am not!

Di

[Donna G]

The above "fee" is in addition to the $.48 per pack "tax" which raises about $171,132,000 per year.

and this is a summary of the money they get from the tobacco settlement.

HOUSE RESEARCH Short Subjects

Elisabeth Loehrke October 2002

Minnesota’s Tobacco Settlement

What is

Minnesota’s

tobacco

settlement?

In 1998 the state of Minnesota and Blue Cross and Blue Shield of Minnesota settled

their lawsuit against several tobacco companies and related organizations. According to

the settlement, the state receives payments from tobacco companies that began in 1998

and will continue into perpetuity. Blue Cross and Blue Shield of Minnesota has a

separate settlement agreement. The settlement establishes three types of settlement

payments.

• Annual payments are deposited in the state’s general fund and are used for the

general operation of state government.

• One-time payments are deposited in endowments and are used for tobacco use

prevention, other public health, and medical education activities, and for cash

flow.

• Court-administered payments are used to fund the activities of the Minnesota

Partnership for Action Against Tobacco (MPAAT).

The annual and one-time payments receive annual inflation adjustments and volume

adjustments (based on changes in the volume of tobacco products sold in the United

States, and changes in tobacco company profitability). The court-administered

payments do not receive inflation or volume adjustments. The settlement also restricts

tobacco companies and related organizations from engaging in certain marketing and

advertising activities, requires dissolution of the Council for Tobacco Research, ensures

public access to court documents and files, and requires disclosure of certain payments

to lobbyists.

How much are

the annual

payments, and

how are they

used?

On December 31, 1999, and each year thereafter into perpetuity, the tobacco companies

must make annual payments to the state. These annual payments are deposited in the

state’s general fund and are used for the general operation of state government. There

are no restrictions on how these payments may be used. The following table specifies

the payment amounts received to date and projected payment amounts for future fiscal

years.

Fiscal Year

Payment Amount

2000 $110.7 million

2001 $124.4

2002 $155.9

2003 $151.5

2004 $188.7

2005 $190.8

[SDianneB]

My state uses most of their settlement money to balance their pathetic budget! Go figure.

Di

[SDianneB]

So, as long as there are tobacco products out there, the states will profit in terms of extra money that they do not have to use on smoking cessation programs.

Hmmm ... lemme see which route I'd go if my objective were to line my pockets.

More taxes, higher revenue, means we need MORE smokers to keep that pipeline going!

It just makes no sense to me.

Di

[teresag]

The one aspect that DOES make sense is that the more costly a pack of cigarettes becomes, the fewer young people who will buy them. Most people who are addicted to tobacco start in their teens. And the research suggests that teenagers will spend their money on other things if cigarettes are too expensive. Once they become adults, and their brains are fully developed, they can choose whether or not to smoke with more wisdom.

[SDianneB]

I don't know about everywhere, but in this city, there are at least 3 places within walking distance of where I work where you can get cigarettes if you have cash -- cheap, no ID check, and illegal. Just like drugs, these people will give them to kids just to get them addicted, and then make sure they have a steady supply. That started here and in other places when the prices started going up.

It's like abortion, alcohol, drugs, etc. -- you don't get rid of it by normal means, because an addict will go anywhere and do anything to get his/her drug of choice.

To a politician, it can be made to sound like a warm fuzzy effort to keep these substances out of the hands of young people, but the truth is that they will get them any way they can. Just watch your local news -- see how many times 7-11 type stores are broken into, and most of what is stolen is the cigarettes. That's because they have a good street value -- a little less than what the stores charge, but very cheap or "free" (stolen) to the dealer.

The states have more incentive to keep people smoking than to get them to quit, IMO. The whole thing just seems rather convoluted to me.

Many years ago, I went to work in a brand spanking new hospital where, believe it or not, the CFO had decided to put a cigarette machine in the lobby with the coke and candy machines. The Nursing Director had a fit, of course, and then the CEO said we should put it there with a sign -- "Free cigarettes - help yourself. We need the business." THUD! The CFO - financial person that he was, saw the profit in selling them.

Di

[Donna G]

We have a law here that stores can not sell to minors. The police have volunteer minors that go into stores and ask for cigarettes, if they sell them they are to loose there license to sell cigarettes, one year for first offense etc.

Well the local Supra America Gas station ( which has a small convienence store) sold cigarettes to a minor and was caught and their license was suspended . They appealed this stating if they could not sell cigarettes they would go out of business! They got their license back!

Donna G

[Larry]

Well i guess i will be today's flame thrower. I thought cigaretts were a legal substance and since they the tobacco companies got rich the politician's and lawyer's found a loop hole and like when Willie Sutton the bank robber was asked why he robbed bank's," his answer was because that's where the money is. Now do not get me wrong as i do not support smoking but yet i still believe in the freedom's(which were rapidly loosing)and right's of all people as long as they do not force there will on me or vice versa.

Does smoking create health problem's and we all here know that answer, but how many people were murdered over cigaretts or robbed a bank or killed people in auto accident's? Well guess what" alcohol is guilty of all that and more. So why are not the lawyer's and politician's going after the Alcohol industry? As some one said higher taxes prevent children from buying cigaretts but guess what smoking is on the rise among young people and i hear the underground black market for Cigaretts is exploding and many drug dealer's have switched over to tobacco or added it to there drug sale's. The problem as i see it is we as a nation have lost our reasoning and common sense and depend intirely too much on what the new's people say and what politician's say and we all know the new's lies and exaggerate's to create a reason to watch them and politician's do the same to get re- elected. I guess the America Jefferson warned us about has happened. Here in kansas the tobacco money was suppose to go to the school's and educate children about smoking but the State got the money and has already spent it on pet project's and a very ridiculous small amount went to the designated area's. And they want us to trust them!!! I'll end this by saying that once they the tax and spend folk's find out there is no more to get from the Golden Goose *(tobacco companies) they will go after the fast food industry (which is already beginning to happen)and probly the candy people next. In other word's they want your money and will go to any extreme to find a company or product to make into the next bad guy so you'll support the excessive taxing of them........

[Darlene]

I sure don't get the cause-effect in taxing ciggarett buyers then using the money for other projects. (highways, etc) As I see it the nation is in major financial trouble for Medicare issues. It seems many of the major health problems can be attributed to smoking; heart problems, high blood pressure, lung cancer, etc. I know because my husband has them all and they are all contributed to his smoking. If the taxed dollars went to pay for Medicare/Medicaid then we might come out a little in the green, but lining the pockets of our politicians is not an incinitive for them to put no smoking education programs in place.

And the notion of raising the prices (taxing) to get people not to smoke is naive. I have seen many, many families put ciggaretts in their pockets before they purchase food for their children! Nicotine is addictive, very addictive, I had a doctor once say that it is THE most addictive drug and extremely hard to quit. So to all those who have been able to quit I have a deep respect for you will power!

When ciggaretts were first on the market no one was told of their dangerous effects, in this day in time EVERYONE knows! When we have a rise in smoking in our youth we have a major breakdown in communication and education. Education should begin in the home, however this is not a perfect country so we then must look to this education in schools. Seeing the effects of smoking and not just being told with illustration and cartoons will make a much better, more permanent impact. I have five kids who will never smoke!