Florida: Drop in Smoking Hits MSA Revenues

Florida will likely collect lower-than-expected revenues from a landmark settlement with the tobacco industry because fewer people are smoking, and the remaining smokers are smoking less, reports The Free Press.

In 1998, America’s largest tobacco companies settled litigation brought by state attorneys general over the cost of treating sick smokers. The tobacco industry agreed to pay billions of dollars over more than two decades, with the level of payments depending on the number of cigarettes sold.

In a report released on Aug. 5, economists anticipated Florida to receive $412.1 million in settlement payments by the end of year, down from the earlier anticipated $413.8 million.

The report pointed to a forecast last month that cigarette sales would decline by 2.5 percent annually over the next decade.

The decline had earlier been projected between 1.44 percent and 1.75 percent. The report also said that tobacco manufacturer payments were $1.7 million less than anticipated for the recently completed 2021–2022 fiscal year.

Meeting at the state Revenue Estimating Conference, the economists also revised anticipated payments for the coming years.

After earlier projecting $442.5 million in revenue for the 2023–2024 fiscal year, the state is now forecast to receive $417.9 million through the settlement during that period.