Allocates certain tax revenue to the tobacco use prevention and control program fund

Section 2 amends Section 482 of the Tax Law to require that a portion of tobacco taxes collected or received by the Commissioner of Taxation pursuant to Article 20 of the Tax Law must be credited to and deposited in a new Tobacco Use Prevention and Control Fund over a ten period of ten years with funding levels meeting the CDC recommendations that are in place in 2026. Allocations to the fund would be made in accordance with the following schedule: effective on and after April 1, 2016, $52 million; effective from April 1, 2017 to April 1, 2025, an increase that is no less than 5% annually; effective April 1, 2026, no less than the amount recommended by the CDC on such date.

Section 3 adds a new Section 86 to the State Finance Law to establish the Tobacco Use Prevention and Control Fund. The bill requires, that all funds received by the Fund must be expended through an appropriation only for the purposes of implementing the Tobacco Use Prevention and Control Program in accordance with Section 1399-ii of the Public Health Law.

Section 4 provides the effective date.

Justification

The New York Tobacco Use Prevention and Control Program has been extremely effective in reducing the number of adults who smoke and the number of children taking up this deadly addiction. The program is independently reviewed and those reviews have concluded that the program is responsible for significant public health improvements. However, the review has most recently identified the program's single biggest weakness - dwindling state support.

Since 2007 state funding for the program has been cut in half, to $39.3 million. Since that time, New York has dropped from 5th to 21st among states' per capita spending on tobacco control. The CDC recommends that New York spend $254 million annually on the Tobacco Use Prevention and Control Program. This past summer, an independent evaluator of the program recommended that funds for the program be increased to $85 million, with subsequent steps to meet the CDC standard.

The State collects over $2 billion annually in tobacco tax revenues, but spends only 16% of the CDC recommended amount on tobacco control support. This inadequate funding level for the program stands in stark contrast to promises made in 1988 by public officials to invest state dollars earned from the Tobacco Master Settlement Agreement in tobacco control programs. In fact, the State Attorney General at that time stated that: "As a result, millions of children who are not yet smokers will be sparred horrific diseases and suffering, and millions of current smokers will get a real chance to quit and reclaim their good health." In addition, the Tobacco Master Settlement Agreement states that its purpose is to "achieve for the Settling States and their citizens significant funding for the advancement of public health" and "the implementation of important tobacco-related public health measures."

This bill allocates a small portion of tobacco tax revenues over a 10 year period to the Tobacco Use Prevention and Control program to bring funding levels in line with the recommendations of the CDC by 2026. Funding levels will increase from the current $39.3 million in 2014 to the amount recommended by the CDC in 2026. This investment will save money and lives. In 2009, 25,400 lives were prematurely lost due to tobacco use. Tobacco costs New Yorkers an estimated $8.17 billion annually in health care costs, including $5.47 billion in Medicaid costs, about half of which is absorbed by state taxpayers. Upstate New York has seen it own share of serious health problems, particularly affecting those of limited income who have not experienced reductions in smoking rates over the past 10 years. According to a recent report by the American Cancer Society, upstate New York, which has exceptionally high smoking rates, has a much higher lung cancer rate than downstate New York and is higher than the national average. This legislation is imperative. In summation, this bill will provide a mechanism for funding the necessary smoking prevention programs and protect lives.

Legislative history

2013-2014: S.5462B

Fiscal implications

This bill will save the State money. Tobacco costs New Yorkers an estimated 58.17 billion in health care costs, including $2.7 billion in Medicaid costs as a result of smoking.

Effective date

This act shall take effect on April 1, 2018. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date.