Determinants of States' Allocations of the Master Settlement Agreement Payments

Abstract

To determine which factors influence states' allocation decisions for the tobacco Master Settlement Agreement and the four individual settlements' annual payments, including the decision to securitize, we analyzed the effects of voter characteristics, political parties, interest groups, prior spending on public tobacco control programs, and state fiscal health on per capita settlement funds allocated to tobacco-control, health, and other programs. Tobacco-producing states and those with high proportions of conservative Democrats or elderly, black, Hispanic, or wealthy people tended to spend less on tobacco control. Education and medical lobbies had strong positive influences on per capita allocations for tobacco-control and health-related programs. State fiscal crises affected amounts spent by states from settlement funds as well as the probability of securitizing future cash flows from the settlements.