I was raised in Kentucky, where there were "wet" counties allowing alcohol and "dry" counties prohibiting it, so I know the intricacies of bootlegging. It was not illegal to purchase a small amount of alcohol in a wet county and take it to a dry county for personal consumption. But possession of a large amount in a dry county created a presumption by authorities that the alcohol was going to be illegally sold.
That's sort of what I thought was going on when I read the headline "Contraband cigarettes snuffed out in Indiana." Someone had been caught with a truckload of cigarettes bought in a lower-tax state and charged with the intent to illegally sell them here and cheat our kindly state bureaucrats out of their rightful cut. But it was even a little more complicated than that. Distributor G.T. Northeast had been caught with a warehouse full of 11 million cigarettes of brands not allowed to be sold here under the Master Settlement Agreement with the tobacco industry. The distributor 'fessed up the mistake, so Indiana Attorney General Greg Zoeller had half of the smokes destroyed and let the disributor take the other half out of state. And get this:
A consent agreement reached between the attorney general's office and G.T. Northeast notes that the company mistakenly interpreted the law to permit the storage of the cigarettes in Indiana since they were to be sold elsewhere. Possession of contraband cigarette brands is illegal in Indiana, even if stored in Indiana for sale outside the state.
Man, can't even store them here. That's some powerful Master Settlement Agreement. You remember the good old MSA. That was the 1998 extortion plot lawsuit settlement the tobacco companies reached with the attorneys general of 45 states, including Indiana, which provided $246 billion to the states in order to "compensate" them for the costs of tobacco-related illnesses. Of course, states just started using the money for everything in the world -- it was just another big pot of money to spend from. Indiana's share was $4.5 billion to be spread out over 20 years, which by my math means we've still got more than $2 billion coming. And yet:
Gov. Mitch Daniels and Indiana lawmakers made one such decision in the closing days of this year's legislative session: They took a whack out of the state's well-respected but perpetually underfunded anti-smoking program. The decision to slash spending on the Indiana Tobacco Prevention and Cessation program was not surprising; plenty of other programs took hits this year. But the size of the cut -- roughly 33 percent -- stunned many working hard to reduce the state's smoking rate.
[. . .]
Meanwhile, Daniels and lawmakers had been in agreement earlier in the year: The anti-smoking program's spending, which comes mainly from the 1998 tobacco settlement, would be cut by about 10 percent -- from $16.2 million to $14.5 million. That cut was big, but still similar to those other programs faced.
[. . .]
As lawmakers moved into a special session, though, the anti-smoking program took a uniquely large hit -- down to $10.85 million. While that is the same amount the state spent on anti-smoking programs in 2007, it is a drop from the past two years and woefully short of the $32 million the program received in its earliest years. The federal Centers for Disease Control and Prevention, by the way, recommends Indiana spend more than $30 million on the program.
We've got almost half of $4.5 billion coming, and we're going to spend $10.5 million on smoking-cessation. Way to go! But we probably shouldn't complain. Indiana was one of only six states found to have spent more than the CDC recommendations on tobacco-control programs in a 2001 study. And were were not one of the seven states to -- get this -- invest a portion of the settlement funds in tobacco company stocks.
And this remarkable story just in:
Fewer Indiana youths are smoking than ever before, according to a survey by the state's tobacco-control program.
At the start of the decade, 31.6 percent of high school students in Indiana smoked. By last year, that number had fallen to 18.3 percent, a drop of 42 percent.
That is one heck of a drop, Anti-smoking efforts and the fact that tobacco has become very uncool might have something to do with it, but it's probably mostly just the cost. The state has finally found the price point making smoking something the kids would rather do without. That's good news for the longterm health of the state, but how are lawmakers going to replace all that tax money? They can't put in that many casinos.
Hey, you, put down that Big Mac! You didn't bring it in from that Ohio McDonalds' two-for-one sale, did you?