WV GETS SHORT END OF TOBACCO SETTLEMENT?

(08/08/2005)

Twenty-nine states, including West Virginia, would have been better off passing a four dollars excise tax on a carton of cigarettes rather than signing that multi-billion-dollar tobacco settlement. So says a new study by Stanford University economics professor Jeremy Bulow. Major tobacco companies agreed to make about $206 billion dollars in annual payments over more than two decades, amounting to about four dollars per carton sold. Settlement money was supposed to go to help decrease the health care costs created by smokers, but in most states it has gone to shore up the budget. West Virginia has continued to decrease the direct funds for tobacco prevention programs. Local school students fund most of their anti-tobacco efforts through fund raisers. Bulow says states don't get all four dollars, since the settlement allocates percentage shares, which are purportedly based on each state's smoking population, related health care costs and other considerations. According to the study, the states earning the most from the settlement are New York, California and Massachusetts. Kentucky, North Carolina and Virginia earn the least. At two dollars and 88 cents a carton, and a $22.1 million dollar loss compared with the excise tax, West Virginia ranks among the bottom third of states in the study.

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