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M a r k e t Watc h States’ Allocations Of Funds From The Tobacco Master Settlement Agreement Health spending from settlement proceeds declined more in the case-study states compared with national trends. by Frank A. Sloan, Jennifer S. Allsbrook, Leanne K. Madre, Leah E. Masselink, and Carrie A. Mathews ABSTRACT: This study assesses six states’ allocation decisions for funds from tobacco settlement agreements, using information from newspaper articles and other public sources. State allocation decisions were diverse; substantial shares were allocated to areas other than tobacco control and health, including capital projects and budget shortfalls. The allocations did not reflect the stated goals of the lawsuits leading to the settlements. This outcome reflects a lack of strong advocacy from public health interest groups, an unreliable public constituency for tobacco control, and inconsistent support from state executive and legislative branches, all combined with sizable budget deficits that provided competing uses for settlement funds.

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n n o v e m b e r 19 9 8 four major tobacco companies signed the Master Settlement Agreement (MSA) with forty-six state attorneys general to resolve lawsuits brought on behalf of state Medicaid programs. 1 Florida, Minnesota, Mississippi, and Texas settled separately. Providing $206 billion in payments to states over twenty-five years, the MSA also imposed restrictions on advertising and lobbying. In providing unrestricted monies from the MSA, the state attorneys general sought to give flexibility to their legislatures.2 In effect, the MSA provided unrestricted grants to states. How states have allocated funds from the settlements has been described elsewhere.3

Using information from six states—California, Florida, Massachusetts, Michigan, North Carolina, and North Dakota—this study evaluates alternative explanations of why states made the allocation decisions they did. The six were selected for geographic diversity and varied approaches to tobacco control and public health. Together the states contained 27 percent of the U.S. population in 2001.4 Attorneys general from four of the states represented the forty-six participating states in negotiating the settlements.5 Case-study states were slightly below the national mean for health and tobacco control spending from settlement funds. The change in tobacco spending from settlement funds during fiscal

Frank Sloan ([email protected]) is the J. Alexander McMahon Professor of Health Policy and Management and a professor of economics at Duke University, in Durham, North Carolina. Jennifer Allsbrook is a project coordinator at the Center for Clinical and Genetic Economics, Duke Clinical Research Institute. Leanne Madre is a project leader at the Duke Clinical Research Institute—Outcomes. Leah Masselink is a graduate student in the Department of Health Policy and Administration, School of Public Health, University of North Carolina at Chapel Hill. Carrie Mathews is member services manager at CXO Media in Framingham, Massachusetts.

220 DOI 10.1377/hlthaff.24.1.220 ©2005 Project HOPE–The People-to-People Health Foundation, Inc.

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years 2001–2004 in the case-study states mirrored national trends. The decline in health spending from settlement proceeds was greater in the case-study states compared with national trends, which show a decline from FY 2002–2004 in total dollars spent and in terms of the amount spent as a percentage of the Centers for Disease Control and Prevention recommended minimum levels.

Research Methods n Conceptual framework. Several alternative, non–mutually exclusive theories may explain how states allocate settlement monies: voters’ preferences as depicted by the median voter model; elite factors, including political party control and special-interest groups; and effects of prior spending. In the median voter model, citizens’ preferences in the middle of the spectrum on an issue affect political outcomes. When an issue does not command much public attention, this model is deficient in that voters’ preferences are not likely to be well formed. Given the high costs of being informed on all issues, voters delegate responsibility for decision making to elected officials. Particularly on less visible decisions, such as how unrestricted funds from an external source are to be allocated by the state, elected officials can exercise considerable discretion. Nationally, of the two major parties, the Democratic Party has been more supportive of a government role in curbing tobacco use and in other forms of public health and prevention.6 Many decisions, including those concerning allocation of funds from the tobacco settlements, involve concentrated benefits for a few well-defined groups, with the costs being widely shared among the population at large. Under these circumstances, the incentives to influence policy design are much greater for the direct beneficiaries than for the public more generally.7 In the context of the tobacco settlements, such beneficiaries consist of groups that advocate on behalf of tobacco control, public health, tobacco growers, tobaccodependent communities, and other special interests, such as education lobbies, which may

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view the settlement dollars as a new source of funding. Prior spending patterns may be important in that new money may “crowd out” existing spending on public programs. However, states with historical commitments to particular programs may use new funds to support existing programs to the extent that such support reflects voters’ preferences, commitments of public officials, or views of strong interest groups, or some combination. n Information sources. Our main information source was newspaper articles from 1 January 1997 through 30 September 2003. Newspaper selection was based on name recognition, population of circulation area, and location. Since California allocated part of its MSA monies to the four largest cities and to each county, we also studied a California city, San Jose, and two counties, Orange and Imperial. Party platforms in each state (Democratic and Republican) were also reviewed for 1998, 2000, and 2002. We also searched Web sites of state health departments and interest groups actively involved in smoking issues.

Case-Study Findings n California. California’s allocation of MSA funds has been largely controlled by the governor’s priorities, which were influenced by the state’s massive budget deficit. The legislature has had little influence on this issue, and health interest groups at the state level have been reactive rather than proactive. Gov. Gray Davis (D) dominated California’s initial allocation process for MSA funds; only after placing FY 2000 and FY 2001 MSA payments in the general fund did Davis designate $20 million from the MSA for California’s tobacco control program in FY 2002.8 He cut tobacco control funding while securitizing MSA funds for budget deficit reduction in FY 2003.9 California continued to use tobacco tax revenues to support tobacco control (funded by a 1988 $0.25 increase in the tobacco excise tax), which was considered a national model.10 Although Davis’s budget proposal reduced the tobacco control program budget for FY 2003, the program remained the highest-funded in

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the United States. During the budget crisis of 2002–03, Davis proposed a cigarette excise tax increase.11 Although the tax increase was not enacted, Davis’s proposal had political value in demonstrating his commitment to budget deficit reduction and to tobacco control. Several California cities and counties sued the tobacco companies along with the states. California later established a Memorandum of Understanding with its counties and largest cities, giving 50 percent of state MSA funds to the state, 45 percent to the counties, and 5 percent to the four largest cities.12 The use of local MSA funds for health care programs garnered intense public interest in Orange County and San Jose. Both allocated MSA funds to health care and have maintained these allocations. In Orange County an alliance of health care and labor groups proposed allocating 80 percent of the county’s MSA funds to health care.13 The measure passed with 65 percent of the vote in November 2000.14 In San Jose a coalition including religious congregations, educators, and labor groups lobbied the city council to allocate MSA funds to children’s health insurance. The program was approved in late 2000.15 By contrast, the MSA received virtually no public attention in Imperial County. The only newspaper coverage was discussion of using MSA funds to close the county’s budget deficit in 2002. n Massachusetts. Influence over MSA fund allocation in Massachusetts has shifted between the legislative and executive branches. Interest groups were occasionally visible but have had a minimal impact, while spending on tobacco control has decreased. Immediately after the MSA was signed, the legislature took the lead in allocation decisions. Gov. Jane Swift (R) and Gov. Mitt Romney (R) later intervened to divert funds to other priorities. Swift and Romney had little prior involvement with tobacco control and cited fiscal concerns to justify cutting tobacco control funding. Massachusetts’s FY 2000 MSA funds were divided between a trust fund and healthrelated spending, including tobacco control. The state’s FY 2001 budget included $43.1 mil-

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lion for tobacco control ($12.4 million from the MSA).16 The FY 2002 budget allocated $48 million to tobacco control—$16 million from MSA funds—but Swift reduced the total to $31 million, citing anticipated revenue shortfalls.17 The FY 2003 tobacco control budget was $10 million, later reduced to $4.8 million.18 Massachusetts’ FY 2003 MSA funds were used for current expenditures with no allocation to the trust fund. Despite campaign promises to restore such funding, Romney’s FY 2004 budget allocated only $1.7 million to tobacco control, citing the fiscal crisis.19 The legislature overrode his decision, restoring tobacco control spending to $2.5 million.20 n Michigan. In Michigan the governor for much of the post-MSA period advocated spending MSA funds on an initiative other than tobacco control and public health. In 1999 Gov. John Engler (R) proposed using MSA funds to finance a merit scholarship program (available to high school students who passed a proficiency exam) at $2,500 per student for tuition at any community college or university in Michigan. Only when challenged did the administration attempt to frame this higher education program as a public health measure. Officials argued that the state had spent enough on tobacco control and that the public was sufficiently aware of smoking’s harms. No MSA funds were added to Michigan’s FY 2000 tobacco control budget of $7.5 million.21 The state has spent no MSA funds on tobacco control subsequently. The scholarship program was strongly supported by the legislature. In 2002 voters affirmed support of the program, rejecting a health interest group initiative by a two-toone margin. 22 The initiative would have amended the state’s constitution to redirect 90 percent of MSA funds to health services and tobacco control.23 The initiative failed because of the popularity of a program providing direct benefits to many constituents and voters’ reluctance to amend the constitution. Conflict between the legislature and newly elected Gov. Jennifer Granholm (D) over a proposal to redirect FY 2004 scholarship funds to health programs

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showed that the legislature was strongly motivated to protect the scholarship program. n Florida. Florida was chosen for this study because it did not participate in the MSA. Its settlement designated funds for tobacco control for an initial three-year period. Pursuant to its agreement, the state received $200 million for a youth antismoking pilot program.24 Interest-group support for this allocation was mixed. The American Cancer Society (ACS) supported the settlement, arguing that it would save a million or more children’s lives.25 However, the American Lung Association, historically aligned with the ACS on tobacco control, criticized the settlement on the grounds that it forfeited numerous legal rights (for example, it banned class-action suits and punitive damages).26 The Florida Pilot Program on Tobacco Control (FPPTC), which began in March 1998 with the “Truth” advertising campaign, focused on decreasing teen smoking. Five months later, 90 percent or more of Florida’s youth were aware of the campaign.27 By 2003 the smoking rate among middle and high school students had declined by 35 percent and 50 percent, respectively; however, the greatest improvement was realized during 1998–99.28 Nevertheless, a combination of change in composition of the legislature, a new governor, budget deficits, and the end of the program’s three-year pilot led to sizable cuts in program funding. The program began with $70 million in 1998 but over time was reduced to $1 million for operations in 2003.29 Gov. Lawton Chiles (D) had been an advocate for tobacco control. By contrast, his successor, Jeb Bush (R), proposed $39 million for tobacco control in FY 2004; the Florida House and Senate proposed much smaller sums ($10 million and none, respectively), arguing that other state agencies or programs had also received major budget reductions. There has been some voter support for tobacco control. In November 2002, 71 percent of voters approved the Smoke-Free for Health Amendment, the first statewide voter referendum in the country to approve an initiative for smoke-free workplaces.30

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n North Carolina. Considering the interests of many voters and the well-organized advocacy groups representing tobacco agricultural and manufacturing interests, there has been formidable opposition to tobacco control in North Carolina. In 1998, then Attorney General Mike Easley (D) argued that the proposed MSA would provide funding for tobacco growers and other industry-dependent workers. When MSA funds were first received, the state allocated more than half of the funds to tobacco growers and communities negatively affected by the MSA. Eventually, funds were also spent on health programs. The ACS and American Lung and Heart Associations requested 10 percent of MSA dollars for tobacco control in 1999, initiating the state’s first public spending on tobacco control.31 In 2002 Senior Care, which subsidized prescription drugs for seniors, received MSA funds. Facing a FY 2003 budget deficit, Easley (now governor) proposed diverting $65 million from MSA trust funds to reduce the deficit.32 He argued that even after taking money from the trust funds, the state could continue funding tobacco control program operations over the next three years. The programs survived; by FY 2003, funds had been allocated to tobacco control from the Health and Wellness Trust Fund to sponsor a teen-smoking prevention campaign at $6.2 million a year (for the next three years).33 Also, $3 million was allocated to an obesity prevention program for children.34 North Carolina has not increased its cigarette excise tax (currently five cents per pack) since 1991. Proposals to increase the excise tax were rejected in 2004, although a recent poll showed that 62 percent of North Carolina voters support an increase of fifty cents.35 And some advocacy groups, including teachers and state employees, have supported raising the cigarette excise tax, perhaps because of the added funds that would be generated. n North Dakota. In North Dakota a major share of MSA funds has been used for infrastructure development. The state had no existing tobacco control programs as of MSA im-

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plementation. Although Attorney General Discussion Heidi Heitkamp (D) advocated funding toSpending patterns among the six states bacco control at the time, the legislature did have been diverse, reflecting patterns among not allocate funds for this purpose. the states more generally, in that far less is beA 1998 poll indicated that 89 percent of re- ing spent on tobacco control and health prospondents supported using MSA funds for to- grams than would have been anticipated in bacco control.36 However, post-MSA, the state view of the states’ tort claims against the comlegislature approved allocating all MSA funds panies. Yet some states with no prior tobacco for 1999–2001 to water projects and bond pay- control programs did initiate programs with ments—and specifying that 45 percent of all MSA support. funds would be spent on water project develIn effect, the MSA has provided an unreopment in future years. Then stricted grant-in-aid to the Governor Ed Schaefer (R) and states, funded by increased “Using funds from his successor, John Hoeven cigarette prices.39 Given the smokers to pay for (R), supported this decision, inelasticity of demand for cigprograms of general listing clean water as a top arettes, the cost of the MSA benefit raises issues public health priority. has been borne mainly by Interest groups supportive of horizontal and smokers. 40 Revenue from of tobacco control did not or vertical equity.” smokers, through increased perhaps could not influence cigarette prices and substanMSA fund allocations. In 1999 tial increases in state cigarette North Dakota’s House Natural Resources excise taxes since 1998, has been used to reCommittee voted not to limit the amount of duce burgeoning state deficits and initiate MSA funds used for water projects. The Amer- other state programs such as water projects ican Heart and Lung Associations supported and tuition subsidies. an amendment to limit funding to only critical n Public policy issues. Patterns of MSA water projects and to prevent allocating all revenues and spending raise important issues trust fund monies. The amendment never of public policy. It is clear that smoking is repassed. sponsible for much mortality and morbidity However, in 2000, citing a U.S. Centers for and that tobacco manufacturers misled the Disease Control and Prevention (CDC) report public about smoking’s harms, which implies showing that the state held one of the lowest that tort litigation could perform an important ratings for tobacco control efforts, Governor role in deterring smoking. The evidence that Schaefer proposed a tobacco control plan for smoking imposed a burden on state budgets in the 2001–03 biennium. With this initiative, the the amount of the MSA payments to states is legislature created the Community Health much less compelling.41 To the extent that it Grant Program, funded by $4.7 million from increased the retail price of cigarettes, which the MSA.37 One of the most successful projects in turn has reduced the smoking rate, the MSA funded by this program was a school and com- has had a deterrent effect.42 However, using munity curriculum plan to teach about the funds from smokers to pay for programs of harms of smoking. For the 2003–05 biennium, general benefit raises issues of horizontal and $6 million was appropriated to tobacco con- vertical equity (the latter reflecting the relatrol and prevention. Community Health Grant tively low incomes of smokers), especially Program funding has been steady, and other since the MSA is probably overpaying states.43 grants are being allocated statewide.38 North When the MSA was reached, various Dakota has not directly allocated MSA funds health interest groups were critical of the lack to deficit reduction, although it has done so in- of constraints on state spending it contained.44 directly by funding water projects with MSA But it is questionable whether such restricmonies. tions would have been effective for long. After

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the initial commitment in Florida to allocate monies to tobacco control for three years, tobacco control funding was severely reduced during a budget crisis. Even a successful program was insufficient to guarantee ongoing funding. Although beliefs about the effectiveness of tobacco control programs differ, empirical evidence on effectiveness is encouraging.45 Thus, some factors other than objective evidence must explain the apparent lack of support for the use of MSA monies for tobacco control and, to a lesser extent, other health programs. One explanation is that states faced a trade-off between spending on programs yielding nearterm versus deferred benefits. It is unlikely that pressure from voters alone is sufficient to cause states to be oriented toward the long term. Especially in states with term-limited legislatures, such as in Michigan, legislators may not take a long-term perspective, either. Another explanation is that tobacco control lacks a strong constituency among voters and among interest groups, which leaves considerable latitude for elected officials to exercise their own preferences. The failure of Michigan’s statewide referendum suggests a lack of public support. Another manifestation of lack of public support for tobacco control and health programs is the broad concept of “health” used in MSA policy discussions—water (North Dakota) and education (Michigan). However, the case-study states provide some counterexamples, as do results of polls. State affiliates of national health organizations interested in tobacco control have publicly criticized the allocations—and even unsuccessfully sued some states (for example, Massachusetts)—but typically have not affected allocations. The lack of interest-group influence may reflect deliberate choices. The interest groups may have had higher priorities. Or, lacking a broad base of public support, such groups may have attached low probabilities of success to intense lobbying efforts. We searched for party platforms in the six case-study states for 1998, 2000, and 2002. Of the four platforms we located, all were Demo-

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cratic. Only one (Massachusetts) specifically mentioned use of MSA funds for tobacco control or health. This inattention to tobacco control suggests that MSA fund allocations were indeed not a major political issue. Of the two major parties, the Democrats have been more committed to tobacco control, although Democratic officeholders have often been reluctant to commit to tobacco control from MSA funds. However, among the six case-study states, Florida was the only state in which a change in the governor’s party from Democratic to Republican was associated with a change in how MSA monies were allocated. Tobacco manufacturers do not appear to have greatly influenced the allocations. However, the companies may have worked behind the scenes to influence such allocations, especially in states with substantial pro-tobacco constituencies (such as North Carolina). Especially when public support for a program is lacking, executive and legislative branches (such as in Massachusetts) have had considerable latitude in the allocations. Although plausibly favoring their own programs, state departments of health have been forced to abide by the decisions of their superiors. If the governors generally have not supported funding for tobacco control, the larger question arises: Why did so many states file lawsuits against the companies? Among the reasons are structural features of state government: U.S. attorneys general are often elected and may use involvement in litigation against companies engaged in conduct that appears contrary to the public interest as a platform to pursue higher public office. For governors, who have more general fiscal responsibility, the availability of unrestricted money for use in solving short-term problems is very tempting. One criterion by which states were selected for this case study was a history of public funding for tobacco control prior to the MSA.46 In the case-study states, spending from settlement proceeds was largely independent of prior spending patterns, a result consistent with a multivariate analysis of spending patterns in all fifty states.47 Our study included three localities in Cali-

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fornia, one of the few states sharing MSA monies directly with counties. In two of the three localities, patterns of spending on tobacco control and health were established early and have been maintained. In the third, a rural county, use of MSA funds has attracted virtually no attention. Tobacco control programs may have a greater likelihood of success at the local than at the state levels because tobacco companies cannot organize opposition to such programs as efficiently at local levels.48 Our case-study evidence for the counties, which in part contrasts with allocations at the state level, is consistent with this view. n Study limitations. We acknowledge several study limitations. Findings from six states may not generalize to others or to the country as a whole. However, another six states would probably have differed on particulars, but the overall findings likely would have been similar. A second limitation relates to peculiarities of the first five years after the MSA, especially the recession and the large budget deficits that most states experienced. The real switch in state spending from particular programs to broad-scale deficit relief occurred at the height of budget crises in 2003. If the states had not experienced revenue shocks, allocations might have differed. Third, although the media often serve the role of “devil’s advocate,” many aspects of behind-the-scenes negotiating are not available from newspaper accounts or public records. Thus, using a combination of publicly available evidence on process and the observed outcomes, we have had to fill in some blanks.

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h e s u c c e s s e s o f tobacco litigation, much of which involves parties other than the states, are ongoing and have elicited interest in using litigation to achieve public health objectives in other areas—from fast food to guns. The experience with the MSA offers the prediction that absent pressures from specific constituencies and without leadership from states’ executive and legislative branches, states spend the proceeds on a diverse range of priorities.

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This study was supported in part by a grant from the Robert Wood Johnson Foundation administered by the Substance Abuse Policy Research Program, based at Wake Forest University. NOTES 1.

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National Association of Attorneys General, “Master Settlement Agreement,” 1998, www. tobacco.neu.edu/tobacco_control/resources/msa/ multistate_settlement.htm (15 November 2004). M.A. Derthick, Up in Smoke: From Legislation to Litigation in Tobacco Politics (Washington: CQ Press, 2002), 182. U.S. Government Accountability Office, Tobacco Settlement: States’ Allocations of Fiscal Years 2002 and 2003 Master Settlement Agreement Payments, Pub. no. GAO-03-407 (Washington: GAO, February 2003). U.S. Department of Commerce, Statistical Abstract of the United States, 2002 (Washington: U.S. Government Printing Office, 2002), Tables 18 and 19. Derthick, Up in Smoke, 172. See E. Carlisle et al., “Determinants of States’ Allocations of the Master Settlement Agreement Payments” (Unpublished manuscript, Duke University, May 2004). T. Persson and G. Tabellini, “Political Economics and Public Finance,” in Handbook of Public Economics, vol. 3, ed. A.J. Auerbach and M. Feldstein (Amsterdam: Elsevier Science B.V., 2002), 1549– 1659. L. Gledhill, “Law Requires Insurers to Cover Clinical Trials,” San Francisco Chronicle, 10 August 2001. Campaign for Tobacco-Free Kids, American Lung Association, American Cancer Society, and American Heart Association, Show Us the Money: A Mid-Year Update on the States’ Allocations of the Tobacco Settlement Dollars, 22 July 2002, www.tobaccofree kids.org/reports/settlements/2002mid/2002mid report.pdf (27 October 2004). Campaign for Tobacco-Free Kids, “Comprehensive Statewide Tobacco Prevention Programs Effectively Reduce Tobacco Use,” 2 November 2004, www.tobaccofreekids.org/research/ factsheets/pdf/0045.pdf (16 November 2004). D. Morain, “Burning the Tobacco Windfall,” Los Angeles Times, 24 July 2002. E.G. Hill, “The Tobacco Settlement, What Will It Mean for California?” (Sacramento: Legislative Analyst’s Office, 14 January 1999). C. Enders, “Health Advocates Aim for Settlement Funds,” Orange County Register, 25 February 2000. C. Reed, “Court: Health Initiative Legal,” Orange

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County Register, 15 February 2001. 15. M. Guido, “Kids’ Insurance Program Proves a Healthy Success,” San Jose Mercury News, 31 July 2001. 16. Campaign for Tobacco-Free Kids et al., Show Us the Money. 17. J. Crittenden, “Protesters Blast Gov’s $17M Cut to Tobacco Program,” Boston Herald, 25 January 2002. 18. Campaign for Tobacco-Free Kids et al., Show Us the Money. 19. C. Paige, “Loss of Aid Halts Tobacco Program,” Boston Globe, 16 March 2003. 20. R. Klein, “Tug of War Looms on Hill over Use of Anti-Tobacco Funds,” Boston Globe, 15 July 2003. 21. G. Weeks, “Anti-Smoking Message Right on Target,” Detroit News, 24 June 1999. 22. Michigan Secretary of State, “2002 Official Michigan General Election Results,” 17 December 2002, miboecfr.nicusa.com/election/results/ 02GEN/90000004.html (21 October 2004). 23. R. Snell, “Spend Tobacco Money on Health, Group Urges,” Lansing State Journal, 8 February 2002. 24. Florida Settlement Agreement, 25 August 1997, stic.neu.edu/FL/flsettle.htm (21 October 2004). 25. M. Merzer, “Big Tobacco’s Costly Day Curbs Will Redefine How Cigarettes Sold, Consumed in U.S.,” Miami Herald, 21 June 1997. 26. Ibid. 27. M.S. Givel and S.A. Glantz, “Failure to Defend a Successful State Tobacco Control Program: Policy Lessons from Florida,” American Journal of Public Health 90, no. 5 (2000): 762–767; and P.M. Lantz et al., “Investing in Youth Tobacco: A Review of Smoking Prevention and Control Strategies,” Tobacco Control 9, no. 1 (2000): 47–63. 28. R. Barry, “Quit Smoking? But That’ll Hurt the Economy,” Tampa Tribune, 29 June 2003. 29. S.V. Date and K. Miller, “Lawmakers Reach Deal on $52.3 Billion Budget,” Palm Beach Post, 24 May 2003. 30. L. Lebowitz, “Voters’ Mandate: Public Smoking to Be Snuffed Out,” Miami Herald, 6 November 2002. 31. R. Christensen, “Strange Coalition on Tobacco,” Raleigh News and Observer, 25 June 1999. 32. E. Dyer, “In Change of Heart, Easley Signs Budget,” Greensboro News and Record, 1 July 2003. 33. M. Stobbe, “Teen Anti-Smoking Ad Plays on Radio,” Charlotte Observer, 8 May 2003. 34. Staff Editorial, “State’s Trust Fund Money WellSpent on Battling Growing Obesity in Kids,” Asheville Citizen-Times, 4 January 2003.

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35. J. Holland, “House Standing Firm on Budget of $5.3 Billion,” Charlotte Observer, 12 March 2004; and Staff Editorial, “Increasing Tax on Cigarettes Could Help Keep N.C. Budget Cuts from Hurting Most Vulnerable Citizens,” Asheville Citizen-Times, 16 April 2003. 36. Associated Press, “Poll Says N.D. Voters Favor Using Tobacco Money on Prevention,” Grand Forks Herald, 10 December 1998. 37. Associated Press, “Hoeven Outlines AntiTobacco Plan,” Grand Forks Herald, 9 February 2001. 38. Bismarck Tobacco Free Coalition, “School/Community,” www.bismarcktobaccofree.com/school (21 October 2004). 39. F.A. Sloan, C.A. Mathews, and J.G. Trogdon, “Impacts of the Master Settlement Agreement on the Tobacco Industry,” Tobacco Control 13, no. 4 (2004): 356–361. 40. F.J. Chaloupka and K.E. Warner, “The Economics of Smoking,” in Handbook of Health Economics, vol. 1B, ed. J.P. Newhouse and A.J. Culyer (Amsterdam: North-Holland, 2000), 1539–1627; and F.A. Sloan and J.G. Trogdon, “The Impact of the Master Settlement Agreement on Cigarette Consumption,” Journal of Policy Analysis and Management 23, no. 4 (2004): 843–855. 41. See F.A. Sloan et al., The Price of Smoking (Cambridge, Mass.: MIT Press, 2004), for empirical evidence that the states probably received too much from the MSA, measured in terms of MSA receipts versus the extra cost to Medicaid programs from smoking-related illnesses. 42. Sloan and Trogdon, “The Impact of the Master Settlement Agreement on Cigarette Consumption.” 43. Sloan et al., The Price of Smoking. 44. Derthick, Up in Smoke, 172. 45. M.C. Farrelly, T.F. Pechacek, and F.J. Chaloupka, “The Impact of Tobacco Control Program Expenditures on Aggregate Cigarette Sales: 1981– 2000,” Journal of Health Economics 22, no. 5 (2003): 843–859. 46. P.D. Jacobson et al., Combating Teen Smoking: Research and Policy Strategies (Ann Arbor: University of Michigan Press, 2001), 222. 47. Carlisle et al., “Determinants of States’ Allocations.” 48. B.E. Samuels and S.A. Glantz, “The Politics of Local Tobacco Control,” Journal of the American Medical Association 266, no. 15 (1991): 2110–2117.

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