Nearly three in 10 Alabama high school students say they use tobacco. Only West Virginia has a higher rate, according to the Center for Disease Control and Prevention’s Youth Risk Behavior Survey.
Despite this, Alabama has spent just $275,000 on tobacco prevention in 2014, according to data collected by The Campaign for Tobacco-Free Kids.
Alabama has generated $223.1 million in revenue from tobacco this year. The CDC has recommended that Alabama spend $55.9 million on tobacco prevention education, given current usage trends.
Only two states, Missouri and New Jersey, have spent a smaller percentage of the CDC’s recommended amount.
Where’s the money going?
The money generated from tobacco in Alabama comes from two sources — the state’s $0.43 excise tax on each pack of cigarettes sold, and settlement money from tobacco companies.
The settlement money comes from a 1998 deal struck with the major tobacco companies called the Tobacco Master Settlement Agreement. The deal requires them to cover the increased medical costs that have resulted from smoking — close to $206 billion.
There is no law that requires that the money be spent on tobacco prevention. And the state of Alabama has not hesitated to dip into this money to make a variety of unrelated expenditures. For example, the first $13 million is spent on economic development every year.
According to a report by the U.S. Government Accountability Office, Alabama is one of 14 tobacco-producing states that have actually used the settlement money to compensate tobacco growers for a decline in sales — which occurred as a result of the original settlement.
The money that isn’t being used for economic development is divided between Alabama’s Children First Trust Fund, Alabama Medicaid, and Senior Services.
The Children First Trust Fund, which is overseen by Alabama Children First and is the largest recipient of the settlement money, distributes its share to 11 agencies — with a stipulation that the money is used to finance children’s services.
They typically receive between $40 million and $50 million of the settlement money, a share of which is distributed to the Department of Public Health for tobacco prevention.
That money is frequently under threat, though, with state officials often using it to shore up the General Fund.
For several years, settlement money had been withheld from Alabama because the state failed to ensure manufacturers outside of the agreement weren’t distributing in the state.
When $100 million of that withheld money was finally given to the state of Alabama last year, the $20 million share that was supposed to be given to Children First Trust Fund was instead deposited into the General Fund.
The proposal to divert these funds was initially made by Gov. Robert Bentley, which sparked accusations that he was making unwarranted sacrifices in order to protect his promise of “no new taxes.”
Several lawmakers who backed the proposal, however, insisted that the diversion of funds was a great opportunity to balance Alabama’s budget and pointed out that agencies sponsored by Children First Trust Fund still received money from the General Fund.
Christy Mehaffey, executive director of Alabama Children First, disputed these arguments, pointing out that, when the money is diverted into the General Fund, there is no guarantee that the money will be used to finance services for children.
Alabama Children First has placed protecting the tobacco settlement money at the top this year’s agenda, as the Children First Trust Fund is still under threat from state officials, Mehaffey said.
“The General Fund is going to be hurting really badly, and I’m very aware that $50 million is enticing,” she said. “But, by keeping the fund intact, legislators will make sure that those dollars go towards children’s programs and not just be dissolved into state agencies’ overall budgets.”