In the battle to reduce tobacco use, state governments increasingly are being drawn into the front lines. The much-reported settlements between tobacco firms and Florida, Minnesota, Mississippi, and Texas--which sued tobacco companies to recoup state money spent on treating people with tobacco-related illnesses--inaugurated a new era of state involvement. Because of these settlements and a subsequent master settlement agreement between tobacco firms and the rest of the states, tobacco companies could transfer as much as $246 billion to states over the next 25 years. Some states are raising even more revenues by increasing their tobacco excise taxes.

With this new infusion of money, states are now faced with the challenging prospect of how to best spend these tobacco-related funds. Central to the debate is how much--or even whether any--funding should be devoted to state-led tobacco-control efforts such as programs for treating nicotine addiction or antismoking educational campaigns. Across the country,...

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