Oklahoma Smokers

Few, if any, would argue that nicotine is not addictive. It is not only a very addictive substance it is also a ‘pleasurable substance’ for a lot of people. There is however one aspect of tobacco that is much more addictive than nicotine and that is tobacco money. It may even be more pleasurable to politicians than nicotine is to smokers.

While estimates are that twenty-five percent of Oklahomans are smokers, it appears that practically all of Oklahoma’s elected and appointed officials are tobacco money addicts. So much so that the federal government might wish to require some type of warning on the tobacco money flowing into the Oklahoma treasury.

The amount of tobacco dollars estimated to be sucked into the Oklahoma treasury from both tobacco taxes paid by consumers and ’settlement’ money paid by tobacco companies this year is $361 million. This while the estimated state spending on Medicare/Medicaid costs for treating smoking related illness is $201 million. This results in an apparent $160 million dollar net ‘profit’ for the state from tobacco companies and consumers.

So where do you reckon that $160 million gets spent? If you said tobacco use prevention and cessation programs, you would be only slightly right. This year Oklahoma is spending $8.9 million on such programs. This about 40 percent of what the CDC recommends Oklahoma spend annually for such programs, ranking Oklahoma 21st in the nation in spending to get its residents to refrain from using tobacco products. Of course this is better than last year when Oklahoma spent about half that amount and ranked 32nd in the nation.

Once stop-smoking programs are funded, what’s left, approximately $150 million, is split between the Tobacco Settlement Endowment Trust Fund and the general fund. Originally the split of ’settlement’ funds was fifty-fifty with half flowing into the old tobacco trust fund and half into the general fund, from which the legislature could spend the funds as it saw fit. Owing to a constitutional amendment in 2000 the split will by 2007 become seventy-five percent of the annual ’settlement’ take to the trust fund and twenty-five percent to the general fund.

Oklahoma politicians have become so ‘hooked’ on tobacco money that Oklahoma Attorney General Drew Edmondson is hitting up the legislature for a half-million dollars extra to hire new attorneys to insure that Oklahoma continues to slop at the money trough of the tobacco companies. Under the provisions of the ‘tobacco settlement’ between the big tobacco companies and forty-six states the companies party to that settlement can reduce their annual payments to the states, if their market share decreases, and decreasing it is.

As various states have increased their tobacco taxes, as Oklahoma did in 2005 becoming one of the states with the highest tobacco tax rates in the nation, tobacco users rather than eliminating their use of tobacco have been increasingly moving to ‘cheaper’ brands. These are products of companies not subject to the ‘tobacco settlement’ of 1998. This market realignment is decreasing market share for those companies that are subject to the settlement and under whose provisions the companies can and are decreasing their annual payments to the states.

Oklahoma politicians, and especially the Attorney General, are in a panic that the big tobacco companies will not only lower their annual payments but might also sue to have the settlement itself nullified, owing to the rapidly changing economic picture for ‘big tobacco’. The Attorney General claims he needed the extra half-million worth of attorneys to prepare for just this eventuality. If you get the impression that the Attorney General is ’stocking up’, akin to how some tobacco users stock up just prior to a huge tobacco tax increase, you would be right.

Addictions are like that…

This entry was posted on Wednesday, March 29th, 2006 at 6:00 pm and is filed under Smokers Info. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.