Most U.S. states, including New York, sued the tobacco in-
dustry several years ago, arguing they were owed billions for
the cost of treating medicaid patients. Seven percent of total
medicaid costs were said to be tobacco related.
A deal with the tobacco industry, struck in 1998, at 30 cents
on the dollar, made 46 states, Washington, D.C. and Puerto
Rico, the recipients of an expected $206 billion payout over 25
years. New York's share is projected to be $25 billion.
It may be unwise, however, for state and local governments
to become addicted to the money. Starting in 2000, payments
are adjusted according to the number of cigarettes shipped in
the U.S., using 1998-99 as standard. For every percentage point
shipments decrease, tobacco payments drop by 0.98 percent.
The U.S. Dept. of Agriculture said that price increases, and
marketing restrictions — cigarette manufacturers no longer can
advertise on billboards, sports venues, or mass transit vehicles
— caused an 8.6 percent reduction incigarettes sales in 1999.
Sales dropped 3 percent in 1998.
Erie County's settlement share is estimated at $550 million.
Planners projected $16.95 million for their2000 budget. Niagara
County expects $3,973,000. Cattaraugus: $1,500,000;
Chautauqua: $2,600,000. All will, probably, receive less.
In addition, county taxpayers will likely pay 25 percent of
New York's Health Care Reform Act (HCRA), to provide cov-
erage for uninsured residents. The cost to counties is expected
to equal tobacco payments.
To pay some of HCRA's cost, starting March 1, a 55-cent
hike will double the excise tax to $1.11 per pack. New York's
four million smokers will pay the highest tax in the nation. The
Coalition For A Health New York estimates the approximate
17 percent per pack price increase will prompt 200,000 adults
to quit smoking, and deter 20,000 youths from starting.
"The price of the product will do more to reduce consump-
tion among kids than anti-smoking messages," said Dr. Michael
Cummings, Director of Cancer Prevention at Roswell Park.
"Most kids are not going to hop in the car and goto the Indian
Reservation, or buy cigarettes with credit cards over the
Internet."
The tax increase, projected to raise $400 million a year, will
provide $50 million for anti-smoking and cessation programs.
If it works, farther cuts in tobacco payments are likely.
In Florida, a 1998, aggressive, $70 million campaign fea-
tured, ubiquitously, on billboards, a balding, flabby, middle-
aged man, lying on a beach, in a two-piece bikini, smoking a
cigarette. The caption read, "No wonder tobacco executives
use sexy models to sell their products." Another, a scorebard,
calculated deaths. The final score was AIDS: 34,342. To-
bacco: 465,523. In 1998, smoking dropped 8% among Florida
high school students.
In 1988, California raised cigarette taxes and passed strin-
gent clean indoor-air laws, banning smoking in public places,
including bars. Within eight years, Califomians dropped from,
a 26 percent adult smoking rate, about average, to 18 percent,
the second lowest in the nation.
In 1993, Massachusetts doubled its excise tax to 52 cents to
fund a $100 million annual anti-smoking program. Consump-
tion declined 19.7 percent.
The challenge for the industry then lies in a conundrum. About
50 percent of smokers die prematurely — around 450,000
Americans annually. (By counties, in annual deaths:
Cattaraugus, 150; Chautauqua: 247; Erie: 1682; Niagara:
386; Monroe: 1274). Yet 50 percent of new users start before
age 13; 98 percent begin before they graduate high school. As
a 1981 Phillip Morris marketing report said: "Today's teen-
ager is tomorrow's potential customer."
Based on a national survey of adults over 18,22.9 percent of
adults smoked regularly in 1998. Kentucky, with the lowest
excise tax, at three cents a pack, and 2.3 of its farms growing
tobacco, was highest at 30.8 percent. Utah, with its large Mor-
mon population, was lowest at 14.2 percent. New York was
24.3 percent.
To keep the rates steady, Americans must keep the pace of
3,000 children starting to smoke daily, 'and supplant these 1.1
million children annually.
Child smoking rates from the mid-80s, during the Joe Camel
era, went up, reaching a high in 1996. They have declined by 5
percent over the last two years. Meanwhile, smoking rates rise
as children approach maturity — 9 percent of 8th graders, 18
percent of 10th graders, and 24.6 percent of l2th graders, smoke
daily.
Marketing may be key. As Brown and Williamson wrote, in
1978, "Imagery will continue to be important in brand selection
for teenagers." Of the more than 300 brands of cigarettes,
Mariboro, Camel, and Newport are children's favorites.
"The tobacco companies have studied what makes kids feel
stressed and what makes them calm," said Pamela Pawenski,
of 2 Smart 2 Start, an anti-smoking program in Western New
York, "If you look at most of the tobacco ads, they feature the
kinds of people young people aspire to be."
RJ Reynolds confirms, in a research report, "The expected or
derived psychological effects are largely responsible for influ-
encing the pre-smokers to try smoking, and provide sufficient
motivation during the learning' period to keep the learner'
going, despite physical unpleasantness and awkwardness of the
period."
The tobacco industry also formulates products for different
segments of the market. Perhaps best at helping "pre-smokers"
is Phillip Morris, the nation's 8th largest corporation, with rev-
enues exceeding $50 billion annually. An overwhelming per-
centage of children choose Mariboro Lights over all other brands.
Additivies like leveulanic acid affect sensory nerves, and am-
monia formulations affect the delivery of nicotine so children
can acquire a tolerance to noxious smoke. Mariboro Lights are
designed to be smoother, and help children enjoy nicotine with-
out nausea.
The way the drug is sold also helps.
"The entry price for cigarette consumption, apackat a time,
is a couple of bucks," said Dr. Cummings. "If you sold them
only in cartons, however, you could practically stop teenage
use, overnight. At thirty bucks, most kids could not afford them."
When the first state lawsuit began in Mississippi, tobacco
companies argued that tobacco saved taxpayers billions inmedi-
care, social security benefits, pensions, taxpayer-funded nurs-
ing home stays, elder care, and old-age illnesses. That, coupled
with the fact that government collected billions in cigarette taxes
over the years, offset medicaid costs. Had these hundred mil-
lion tobacco fatailities lived an aggregate billion years longer,
they would cost the welfare state as much or more in medicare.
anti-smoking ad from Adbusters
The court did not receive the argument with enthusiasm. It
is, nonetheless, possibly true, and, factually, irrelevent. The
tobacco settlement is a one time deal, and states cannot sue the
industry again, since the settlement says government now con-
cedes it understand the risks associated with smoking.
Meanwhile, however, it is not the old or the sick, but the
young and healthy, that are needed, by the millions, to start
smoking, if we are to see that much hoped for tobacco settle-
ment, and the industry itself is to survive.
Since adult smokers directly fund tobacco companies' ef-
forts to seduce children, cigarettes should probably be boycotted,
not for one's own health, but for the sake of children, by every
person in America, from this day forward.
For, as RJ Reynolds wrote, "We have looked at length, at
what qualities and image a new brand aimed at the youth mar-
ket should have ... participation, togetherness, and member-
ship in a group . . . a mechanism for relieving street, tensions,
awkwardness, boredom . . . adventurous, different, adult ...
something arousing, some curiousity and some challenge ...
must become the proprietary 'in' thing . . . should not be per-
ceived as a 'health' brand..."
It will take great moral courage to combat the industry's sur-
vival-based ingenuity. Still, in the time it took you to read this,
a dozen children started smoking.
