State tobacco foes say less cash OK if sales truly drop
Anti-smoking advocates say they don't mind that Texas could lose up to $90 million in 2000 and 2001 from the 1998 tobacco lawsuit settlement -- so long as those smaller payments truly mean a drop in cigarette sales.
"As long as consumption really is going down, that's our goal, especially among kids," said Kelly Headrick of the American Cancer Society of Texas. "Our number one goal, because of the direct correlation to cancer, is to get consumption down."
Since the industry reported that domestic consumption of cigarettes fell 14.2 percent from 1997 to 1999, the required payments to Texas will be lower than the $1.8 billion that lawmakers had expected -- and allocated -- when they met last year, according to a Senate report released this week.
Texas likely will have to use unexpected tax revenues or interest earnings to cover this shortfall in the health and education programs and trust funds that were to receive the tobacco money.
Anti-tobacco advocates, though, say that they are not torn by that paradox and that they will continue to fight to reduce smoking.
But they also say they don't believe smoking has gone down as much as the industry data suggest.
Numbers compiled by the U.S. Department of Agriculture, which looks at different sales data, suggest cigarette smoking fell by only 12 percent from 1997 to 1999. Advocates say much of that drop came from a one-time increase in cigarette prices, which prompted businesses to stockpile cigarettes in 1997, thus giving the appearance of a larger drop over the next two years.
"Some industry analysts have suggested the consumption drop they thought they saw for 1999 was not so much a drop in consumption as it was consumption plus these other factors, such as inventory adjustments," said Sue Ellen Wooldridge, a California attorney who is negotiating payments on behalf of state attorneys general.
Wooldridge and others noted that Philip Morris has reported to federal regulators that domestic tobacco shipments are up 3 percent this year compared with last year. Some analysts think consumption truly will drop by about 2 percent in the coming years.
The 1998 tobacco settlement grew out of a series of lawsuits filed by Texas and other states against the nation's largest tobacco producers. Texas was supposed to receive $17.3 billion over the first 25 years of the agreement.
But some advocates say there's nothing strange about wanting that number to decrease every year.
"I don't think it's all that much of a weird position (we're in)," said Carter Headrick, the Texas coordinator for the National Center for Tobacco-Free Kids, who is married to the American Cancer Society official. "Quite frankly, we couldn't be happier that smoking rates are going down."