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CLT UPDATE
Thursday, January 31, 2013
Sleight-of-Hand Taxation Continues
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Politicians, like pickpockets, know that misdirection is the key to
success.
Pickpockets know that a bump to the shoulder or
chest draws the mark’s attention away from the pocket where his
money is.
The politician’s weapons of mass distraction are
his or her words. When a politician begins to spin a tale about how
new “investments” are needed and will be “targeted” to one specific
and noble cause, watch your wallets. They’re about to be lifted....
Remember how we were promised that all the money
states reaped from Big Tobacco was going to be targeted toward
anti-smoking advertising, quit-smoking hotlines and similar
treatment programs? Aren’t tobacco taxes supposed to support similar
measures? That’s surely the pitch we get every time legislators try
to raise them.
The New England Center for Investigative
Reporting, a nonprofit investigative reporting newsroom based at
Boston University, has found that less than 1 percent of the tobacco
money coming to Massachusetts is used to support anti-smoking
efforts. The rest — 99 percent — goes into the general fund.
We’re talking serious money here. Massachusetts
got $254 million in tobacco settlement money in 2012 and raked in
$561 million in tobacco taxes. Yet of that $815 million, the state
will spend just $4.2 million in 2013 on smoking cessation and
prevention programs ...
This happens again and again. The gas tax was
supposed to fund road maintenance and improvements. It doesn’t.
Tolls on the Massachusetts Turnpike were supposed to pay for its
construction. The construction bonds have been paid off, yet the
tolls remain.
Now, Patrick wants to raise the state income tax
to 6.25 percent while cutting the sales tax to 4.5 percent, for a
net gain of $1.9 billion in annual revenues. This money, the
governor says, will be dedicated to transportation improvements and
education.
Does the governor really expect anyone to believe
him?
Given the history of misdirection in the state’s
tax policies, why should they?
A Salem News editorial
Tuesday, January 29, 2013
Politicians promise wonders while they’re reaching for your wallets
Millions of dollars originally intended for
smoking cessation programs in Massachusetts have been diverted
to offset budget deficits, leaving the state struggling to fund
quit-smoking hotlines, treatment programs and anti-tobacco
advertising, the New England Center for Investigative Reporting
has found....
“Roughly 99 percent of all the tobacco
dollars that come into the state are used for something else,”
said Stephen Shestakofsky, recently retired executive director
of Tobacco Free Massachusetts, an anti-tobacco advocacy group.
He was referring to the nearly $254 million in tobacco-related
legal awards given to Massachusetts in 2012. More than $561
million in tobacco taxes was also collected, bringing the
state’s total tobacco tally to just over $815 million, the CDC
reports.
Of that $815 million in tobacco money, only
about $4.2 million will be spent in 2013 on smoking cessation
and prevention programs in Massachusetts, state health officials
said. Since there is no requirement to spend either revenue from
the state’s tobacco taxes or the millions awarded annually as
part of a 1998 Tobacco Master Settlement Agreement between 46
states and four of the nation’s largest tobacco companies, the
remaining funds will go into the state’s general fund to pay for
other cash-strapped programs, often unrelated to smoking....
In releasing his proposed state budget last
week, Gov. Deval Patrick called for a $1 per pack increase in
the state’s cigarette tax that is projected to raise $118.5
million annually. An additional $18.54 million in revenue would
come from raising taxes on other related products, such as snuff
and chewing tobacco. All of that money would end up in the
state’s general fund....
Although not specifically designated for
tobacco cessation, the Master Settlement Agreement was initially
intended to fund tobacco prevention and mitigation programs,
even though the agreement didn’t exactly specify how settlement
money was to be used. Anti-tobacco advocates and state officials
said they believe that was because state legislators wanted to
control how the money would be spent.
Soon after that first 1998 windfall tobacco
settlement, legislators would be spending that money freely. By
the new decade, as municipal budgets became tighter, legislators
throughout New England and the nation began placing the annual
multi-million dollar tobacco windfall into the general fund and
using the money to bridge financial gaps in other budgets.
The Eagle-Tribune
Sunday, January 27, 2013
Anti-smoking program funds diverted
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Chip Ford's CLT
Commentary
This money, the governor says, will be
dedicated to transportation improvements and education.
Does the governor really expect anyone
to believe him?
Given the history of misdirection in
the state’s tax policies, why should they?
—Salem News
editorial
Amen.
While the editorial and the news report upon
which it is based, on Massachusetts' $8.3 billion share of the 1998
Tobacco Settlement and how the commonwealth spends so little on
smoking-cessation programs, is enlightening —
this is but the tip of the sleight-of-hand iceberg.
That assumption in itself is an
unintentional misdirection.
The 46 states that sued "Big Tobacco" initially
were seeking "reimbursement" for damages —
public funds already spent to treat their citizens for
smoking-related illness.
This is what provided them "standing" for the
class-action lawsuit before the courts. In his lawsuit brief against
the tobacco industry, then-Massachusetts Attorney General Scott
Harshbarger argued before the courts:
"[E]ach year, the Commonwealth must spend
millions of dollars to purchase or provide medical and related
services for Massachusetts citizens suffering from diseases
caused by cigarette smoking. ... The 'smoking-related costs to
the Commonwealth' are said to include, but not be limited to,
'medical assistance provided under Massachusetts' Medicaid
program' and 'medical assistance provided under the Common
Health Program.' The complaint seeks 'both monetary damages and
injunctive relief.'"
He added: "As the Supreme Judicial Court has
held, reimbursement is simply 'repaying or making good the amount
paid out.'"
Massachusetts and the other states settled out of
court for $208 billion from "Big Tobacco," to be paid out to the
states over 25 years. Massachusetts' share was $8.3 billion.
In my Boston Herald op-ed column of Feb. 21, 1999
("Smoke
and mirrors deprive taxpayers of tobacco money"), I wrote:
In a transparent bait-and-switch scam, this
reimbursement for the state's past health care program costs for
smoking-related illnesses is being earmarked to expand
government programs and create new ones. This switch comes
despite winning arguments that litigation against the tobacco
industry was to "recover" the cost borne by taxpayers.
In April of 1999 Barbara noted:
The taxpayers should get back the tax dollars
they paid for Medicaid-funded treatment of smoking-related
illnesses. We are the aggrieved party here. We are like an
assault victim who pays his medical bills, pays his lawyer to
sue the perpetrator, wins a court settlement, then learns that
the settlement money will be used to provide self-defense
lessons for whoever wants them.
CLT had been watching this closely since 1998
when the lawsuit was underway and closing in on a settlement:
CLT's Tobacco Settlement Project.
CLT filed a bill in the state Senate that
December (1998), "An Act to Return Tobacco Settlement Dollars to the
Taxpayers."
Our bill —
S1635 — was heard before the Joint
Committee on Taxation (now called the Joint Committee on Revenue) in
June of 1999. In
my testimony I pointed out past broken promises Beacon Hill has
made to us taxpayers. I closed my testimony before the committee
with:
I hope this Legislature will not be a party
to the ongoing bait-and-switch scam, and will insure that
taxpayers get their long overdue promised relief, that they
finally receive their just reimbursement for their decades of
compassion.
As then-Attorney General Harshbarger so aptly
pointed out to the court, using the very words of the Supreme
Judicial Court itself:
"Reimbursement is simply repaying or making
good the amount paid out."
As we know, those billions of dollars of our
reimbursement disappeared into the black hole on Bacon Hill.
Now the state has dropped even the
bait-and-switch fig leaf of funding smoking-cessation programs.
This money, the governor says, will be
dedicated to transportation improvements and education.
Does the governor really expect anyone to
believe him?
Given the history of misdirection in the
state’s tax policies, why should they?
Indeed, how could anyone but a masochist or a
fool believe it?
As Barbara wrote in her recent column, we "Won't
get fooled again."
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Chip Ford |
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The Salem News
Tuesday, January 29, 2013
A Salem News editorial
Politicians promise wonders while they’re reaching for your wallets
Politicians, like pickpockets, know that misdirection is the key to
success.
Pickpockets know that a bump to the shoulder or chest draws the
mark’s attention away from the pocket where his money is.
The politician’s weapons of mass distraction are his or her words.
When a politician begins to spin a tale about how new “investments”
are needed and will be “targeted” to one specific and noble cause,
watch your wallets. They’re about to be lifted.
A story in our sister paper, The Eagle-Tribune, on Sunday
illustrates this principle well.
Remember how we were promised that all the money states reaped from
Big Tobacco was going to be targeted toward anti-smoking
advertising, quit-smoking hotlines and similar treatment programs?
Aren’t tobacco taxes supposed to support similar measures? That’s
surely the pitch we get every time legislators try to raise them.
The New England Center for Investigative Reporting, a nonprofit
investigative reporting newsroom based at Boston University, has
found that less than 1 percent of the tobacco money coming to
Massachusetts is used to support anti-smoking efforts. The rest — 99
percent — goes into the general fund.
We’re talking serious money here. Massachusetts got $254 million in
tobacco settlement money in 2012 and raked in $561 million in
tobacco taxes. Yet of that $815 million, the state will spend just
$4.2 million in 2013 on smoking cessation and prevention programs,
NECIR’s Beverly Ford reported.
And the need is great. Ford reports Centers for Disease Control and
Prevention figures that show that more than 9,000 Massachusetts
residents die annually from smoking-related diseases and yearly
health care costs associated with treating tobacco-related illnesses
in the state have risen to $3.9 billion.
The CDC estimates that it would take $90 million to fully fund
cessation and prevention efforts in Massachusetts. The $4.2 million
the state is spending is just 4.6 percent of what’s needed to meet
the CDC standard.
“Major components of the program have gone unfunded,” Dr. Lois
Keithly, director of the Massachusetts Department of Public Health’s
Tobacco Cessation and Prevention Program, told Ford. Keithly has
seen her budget slashed by $50 million from a peak of $54.3 million
in 2000.
Gov. Deval Patrick in his budget message called for increasing the
state’s cigarette tax by $1 per pack. The tax hike would raise
$118.5 million annually — all of which would go into the general
fund. Patrick also hopes to reap another $18.54 million from raising
taxes on other tobacco products.
So clearly, the state’s interest is not getting smokers to quit. The
state is interested in making as much money as it can from smokers’
addiction to tobacco.
This happens again and again. The gas tax was supposed to fund road
maintenance and improvements. It doesn’t. Tolls on the Massachusetts
Turnpike were supposed to pay for its construction. The construction
bonds have been paid off, yet the tolls remain.
Now, Patrick wants to raise the state income tax to 6.25 percent
while cutting the sales tax to 4.5 percent, for a net gain of $1.9
billion in annual revenues. This money, the governor says, will be
dedicated to transportation improvements and education.
Does the governor really expect anyone to believe him?
Given the history of misdirection in the state’s tax policies, why
should they?
The Eagle-Tribune
Sunday, January 27, 2013
Anti-smoking program funds diverted
By Beverly Ford
New England Center for Investigative Reporting
Millions of dollars originally intended for smoking cessation
programs in Massachusetts have been diverted to offset budget
deficits, leaving the state struggling to fund quit-smoking
hotlines, treatment programs and anti-tobacco advertising, the New
England Center for Investigative Reporting has found.
The cutback in smoking cessation programs comes at a time when more
than 9,000 Massachusetts residents die annually from smoking-related
diseases and yearly health care costs associated with treating
tobacco-related illnesses in the state have risen to $3.9 billion,
according to the Centers for Disease Control.
Nationally, those numbers are even more staggering. Annual
smoking-related deaths top 400,000 and annual health care
expenditures reach beyond $96 billion.
“Roughly 99 percent of all the tobacco dollars that come into the
state are used for something else,” said Stephen Shestakofsky,
recently retired executive director of Tobacco Free Massachusetts,
an anti-tobacco advocacy group. He was referring to the nearly $254
million in tobacco-related legal awards given to Massachusetts in
2012. More than $561 million in tobacco taxes was also collected,
bringing the state’s total tobacco tally to just over $815 million,
the CDC reports.
Of that $815 million in tobacco money, only about $4.2 million will
be spent in 2013 on smoking cessation and prevention programs in
Massachusetts, state health officials said. Since there is no
requirement to spend either revenue from the state’s tobacco taxes
or the millions awarded annually as part of a 1998 Tobacco Master
Settlement Agreement between 46 states and four of the nation’s
largest tobacco companies, the remaining funds will go into the
state’s general fund to pay for other cash-strapped programs, often
unrelated to smoking.
Most of the other states involved in that tobacco settlement also
use that annual windfall to fund programs unrelated to smoking,
anti-tobacco groups said.
With Massachusetts spending just $4.2 million – or 4.6 percent of
the $90 million the federal Center for Disease Control and
Prevention says is needed to fully fund cessation and prevention
efforts in Massachusetts – the state’s anti-tobacco program is
woefully cash-strapped.
“Major components of the program have gone unfunded,” said Dr. Lois
Keithly, director of the Massachusetts Department of Public Health’s
Tobacco Cessation and Prevention Program, who has seen her budget
slashed by $50 million from a peak of $54.3 million in 2000.
New Hampshire received $1.3 million in federal anti-tobacco money
for fiscal 2013 and spent it on smoking control programs. But it
provided no state money, while collecting $212 million in tobacco
taxes in fiscal 2012. The state’s $1.3 million commitment to smoking
cessation efforts was only 6.9 percent of the $19.2 recommended by
the Centers for disease control.
Ad campaign killed
In Massachusetts, the cutbacks killed a major anti-smoking media
campaign in 2001 that featured state residents talking about the
effect smoking had on their lives, despite the campaign’s
much-touted success. In conjunction with the Massachusetts Tobacco
Control program, the media campaign was credited with reducing per
capita cigarette consumption by more than 47 percent since 1997 and
curtailing smoking by high school students by 27 percent, according
to the Campaign for Tobacco Free Kids.
Also lost was $940,000 to fund contracts with 19 community health
centers and three hospitals for a program that helped low-income
individuals and mothers to quit smoking. Spot checks by state and
local health officials at stores to ensure that cigarettes were not
being sold to minors also have been reduced. In releasing his
proposed state budget last week, Gov. Deval Patrick called for a $1
per pack increase in the state’s cigarette tax that is projected to
raise $118.5 million annually. An additional $18.54 million in
revenue would come from raising taxes on other related products,
such as snuff and chewing tobacco. All of that money would end up in
the state’s general fund. So far, none has been earmarked for the
Bay State’s tobacco cessation and prevention program, Department of
Public Health spokesman Omar Cabrera said.
In the four years since 2009 alone, when funding for smoking
cessation programs in Massachusetts stood at $13.6 million, more
than $9 million has been slashed from the state’s anti-tobacco
budget, leaving smokers with even fewer counseling options and
support systems.
“It’s become a very different kind of program,” Keithly said,
The state’s current anti-tobacco efforts now focus primarily on
providing technical assistance and training to other health-focused
organizations to bring the stop smoking message to the public, he
said. The state provides brochures and materials. Enforcing
anti-tobacco legislation, such as the statewide smoke-free workplace
law, has also become part of the agenda along with maintaining a
statewide telephone counseling service for smokers.
Smoking rate down
Still, the cutbacks have anti-tobacco advocates worried.
“More and more states are spending virtually nothing for tobacco
control. It’s a huge concern,” said Ellen Vargyas, general counsel
for the American Legacy Foundation, a Washington, D.C., nonprofit
formed after the Master Settlement Agreement to develop cessation
and prevention programs that educate the public about the health
effects of tobacco.
Although smoking rates have declined by almost 50 percent in the
United States in the last 50 years, 19.3 percent of adults over the
age of 18 — or 45.3 million people — still smoke, according to the
CDC. Among low-income individuals, certain ethnic groups and male
smokers under the age of 18, the percentage of smoking is even
higher.
“Clearly, we’re not making the investment we should be making if we
want to tackle the problem,” noted Shestakofsky, adding that cuts to
the Bay State’s tobacco funding have cost the state a loss in
programs that target veterans, the poor and other groups where
smoking is particularly high.
Although not specifically designated for tobacco cessation, the
Master Settlement Agreement was initially intended to fund tobacco
prevention and mitigation programs, even though the agreement didn’t
exactly specify how settlement money was to be used. Anti-tobacco
advocates and state officials said they believe that was because
state legislators wanted to control how the money would be spent.
Soon after that first 1998 windfall tobacco settlement, legislators
would be spending that money freely. By the new decade, as municipal
budgets became tighter, legislators throughout New England and the
nation began placing the annual multi-million dollar tobacco
windfall into the general fund and using the money to bridge
financial gaps in other budgets.
“The reality is we’ve had a series of fiscal crises and since nobody
wants to be raising taxes, they take that money from somewhere
else,” said Massachusetts state Rep. Jonathan Hecht, D-Watertown,
who has been working to legislation to close loopholes on smokeless
tobacco products, among the fastest growing segments of overall
tobacco sales.
Today, smoking rates for adults in all six New England states are
slightly below the 19.3 percent of adults who smoke nationally. But
battling the multi-million dollar tobacco industry on a shoestring
budget remains a challenge.
“Obviously, we have nowhere near the money that the tobacco industry
has. They spend scads of money advertising in the Commonwealth,”
said Knightly. The industry spends an estimated $164.5 million on
tobacco ads in the Bay State.
Targeting kids?
In 2010, the tobacco industry spent $8.05 billion to market
cigarettes and $444.2 million to promote smokeless tobacco products
in the United States alone, according to a report compiled by the
Federal Trade Commission.
Much of those smokeless tobacco marketing dollars are targeted at
kids, anti-tobacco advocates say. Although the tobacco settlement
agreement prohibited tobacco companies from pitching cigarettes to
minors, the agreement did not cover smokeless tobacco products.
Hecht said flavored cigars and chewing tobacco with low price points
and colorful packaging target children under the age of 18 as an
alternative to cigarettes. He worries that the next generation of
tobacco addicts may not be far off. “We’ve let down our guard at a
time when they’re targeting that new generation,” he said.
But Brian May, spokesman for Philip Morris USA, one of the nation’s
oldest cigarette manufacturers, said the states — not the cigarette
companies — are failing the nation’s youth by improperly spending
money meant to educate them about smoking and smokeless tobacco
products.
Since the tobacco settlement agreement was signed in 1998, May said,
Philip Morris alone has paid out more than $59 billion to the 46
states that were part of the settlement.
The states have enough funds to spend $65 million every day on
programs for underage tobacco use but only spend about $8 million
daily, he noted.
The New England Center for Investigative Reporting (www.necir-bu.org)
is a nonprofit investigative reporting newsroom based at Boston
University and supported in part by media outlets that include The
Eagle-Tribune.
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NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
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