Tobacco Trust Fund

Tobacco Trust Fund Fact Sheet

Statement by the Vermont Tobacco Evaluation and Review Board Concerning the Tobacco Trust Fund

Vermont’s Carefully Designed Policy Dedicates Tobacco Company Settlement Dollars to a Sustainable Tobacco Control Program and Ongoing Health Care Services for Vermonters

The Master Settlement Agreement (MSA): For years, Vermont has expended hundreds of millions of dollars in health care costs due to  smoking and tobacco-related illnesses. In 1998, Vermont joined a national civil action settlement to reduce the terrible burden exacted by tobacco on our families and communities. The Master Settlement Agreement (MSA) requires the major tobacco companies to make annual payments so that the states can recover their tobacco-related health care costs.

Vermont Law Enacted to Govern Investment of MSA Dollars: In response to the settlement, Vermont lawmakers took action to ensure those dollars are spent wisely. Public hearings were held throughout the state to hear how Vermonters wanted the settlement money utilized. Our law now dedicates the annual MSA payments primarily to (1) the Tobacco Control Program, (2) a Trust Fund to cover future Control Program costs, and (3) Medicaid health care services.

The Erosion of Funding for the Tobacco Control Program: Funding for the Tobacco Control Program has been cut almost every year since its inception; yet in 2013 it is expected that the MSA will pay Vermont almost 34 million dollars. Sadly, the 2014 budget proposal will deplete the Trust Fund to just over $34,000 placing the future of Vermont’s successful tobacco control program at great risk.

Health Gains at Risk: This trend of reducing funding to the Tobacco Control Program appears to be short-sighted. It costs Vermont lives and money. If Vermont is serious about reducing smoking and improving the health of Vermonters, it must make a sustainable financial commitment of MSA funds to the Tobacco Control Program. Otherwise, we put at risk the efforts and investments already made and will undermine the long term beneficial impacts of the program.

Investing and Saving MSA Dollars to Fund a Sustainable Effort is Key: Continued commitment to the Tobacco Trust Fund, which was established by the General Assembly so that future control programs could be funded with a dedicated source and not rely on the general fund, will preserve the wise investments we have already made in the health of our state and continue to make progress toward lowering tobacco use in Vermont.

Vermonters Support Tobacco Control and Prevention: The overwhelming majority of Vermonters stand with the wise decision to use MSA funds to fight tobacco’s serious adverse health and economic impacts. An October 2007 statewide poll of Vermont registered voters indicated that 86% of Vermonters say that tobacco prevention funding should increase or remain the same. Over 93% of Vermonters say they want at least some of the MSA funds spent on prevention, including programs to discourage kids from smoking and programs to help smokers and tobacco users quit.

Funding Charts

Funding Chart for Vermont’s Comprehesive Tobacco Control Program

Comprehensive Tobacco Control Program Organizational Chart