Governor’s Proposed Budget is a Step in Right Direction

More Work Needed to Fulfill Original Intent of Tobacco Master Settlement Agreement

December 3, 2012 -- Oregon’s leading public health and health care organizations see progress and room for improvement in the Governor’s balanced budget proposal released Friday. The proposed budget includes allocating Tobacco Master Settlement Agreement (TMSA) funds to investments in coordinated care organizations and Oregon’s health systems transformation efforts.

The coalition applauds the Governor for directing dollars towards Oregon’s health system, and looks forward to working with the Governor and the Legislature to ensure that the original intent of the Tobacco Master Settlement Agreement is fulfilled by investing in evidence-based tobacco prevention programs and children’s health. Last week, the coalition of health organizations announced a new policy proposal for the 2013 legislative session, recommending that all available settlement funds be allocated to health and prevention efforts aimed at building a healthier future for Oregonians. The available amount is approximately $120 million, beginning in the 2013-2015 biennium.

“We are pleased to see that the Governor recognizes the importance of allocating funds to coordinated care organizations and health transformation,” said Stephanie Tama-Sweet, Director of Government Relations for the American Heart Association. “Tobacco use, however, is still the number one cause of preventable death in Oregon. We have a unique opportunity this year to reverse this trend, achieve cost savings and improve health by targeting funds towards tobacco prevention and children’s health.”

“When the Tobacco Master Settlement Agreement was signed, the purpose was to pay states for past and future smoking-caused expenses,” said former Oregon Attorney General Hardy Myers. “However, despite overwhelming public support, this hasn’t yet happened. We need to seize this opportunity.”

Driven by the principles of prevention, health equity, accountability and innovation, the coalition recommends the following key investments:

  • Children’s Health & Prevention: $35 million (30% of available TMSA)
  • Equip Coordinated Care Organizations for Success and Achieve Greater Health Transformation through Community-Based Health Initiatives: $73 million (60% of available TMSA)
  • Investment in Oregon’s Tobacco Prevention Efforts: $12 million (10% of available TMSA) Organizational members of the coalition include: the American Cancer Society Cancer Action Network, American Heart Association of Oregon, American Lung Association in Oregon, Campaign for Tobacco-Free Kids, Coalition of Local Health Officials, Oregon Medical Association, Oregon Nurses Association, Oregon School-Based Health Care Network, Tobacco-Free Coalition in Oregon, Inc., and Upstream Public Health.

About the Tobacco Master Settlement AgreementIn 1998, 46 states (including Oregon) and the “Big Four” tobacco companies entered into a legal settlement estimated at $221 billion over the first 25 years, to compensate states for past and future smoking-caused expenditures. The intent was clear: Prevent and reduce tobacco use, especially among children, and lessen the financial toll of tobacco on states.[i]

When the settlement dollars reached Oregon in 2000, voters decisively defeated two ballot initiatives that spent the funds without prevention and cessation investments. At the time, 85% of Oregonians supported spending Tobacco MSA funds on prevention and cessation programs.[ii] What Tobacco Costs Oregon Each Year$563 per Oregon household in state & federal tax burden from smoking-caused government expenditures;[iii]$374 million in Oregon’s Medicaid costs;[iv]$1.25 billion in total direct medical expenditures.[v]

[i] The Master Settlement Agreement. National Association of Attorneys General. 1998.[ii] Davis Hibbitts & Midghall Inc. Polling, November 10, 1999. [iii] Smoking-Caused Federal & State Government Expenditures and Related Tax Burdens on Each State's Citizens. Campaign For Tobacco Free Kids website,

http://www.tobaccofreekids.org/research/factsheets/pdf/0096.pdf [accessed 5/17/12]. [iv] Oregon Tobacco Facts & Laws. Tobacco Prevention and Education Program. Portland, Oregon: Oregon Department of Human Services, Oregon Public Health Division, 2010.[v] Smoking-Attributable Morbidity, Mortality and Economic Costs (SAMMEC), Centers for Disease Control and Prevention.

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