States will collect $21.7 billion from tobacco this year. Prevention gets 3 cents on the dollar.
Summary
The 1998 tobacco settlement and state cigarette taxes will hand states $21.7 billion in FY2026. States plan to spend $728.6 million of it — 22% of what the CDC recommends — on programs to stop kids from smoking and help others quit, even as smoking still kills 480,000 Americans a year.
The dollar that never shows up
Every state now collects two tobacco revenue streams: the annual MSA payment from the settling manufacturers, and its own cigarette and tobacco excise taxes. Combined, that's $21.7 billion flowing into state treasuries in FY2026, according to the Campaign for Tobacco-Free Kids' annual "Broken Promises to Our Children" report. The CDC's own funding formula — what it calculates each state needs to run a comprehensive tobacco prevention and cessation program — adds up to $3.3 billion nationally. States are actually spending $728.6 million: less than a quarter of the number, and less than the $8.6 billion tobacco companies spend marketing their products every year, nationwide, by the industry's own figures reported to the Federal Trade Commission.
View data as table
| Settlement + tax revenue collected | $21.7B | FY2026 |
|---|---|---|
| Tobacco industry marketing | $8.6B | per year, nationwide |
| CDC-recommended prevention funding | $3.3B | FY2026, all states |
| Actual state prevention spending | $728.6M | FY2026, down $36.2M from FY2025 |
Read the bars in order and the promise breaks in plain sight. States take in $21.7 billion. Tobacco companies alone spend more marketing the product ($8.6 billion) than the says is needed to counter it ($3.3 billion). And what states actually put into prevention — $728.6 million — is the smallest number on the chart, a $36.2 million cut from the year before. Tobacco companies outspend state prevention programs on marketing by roughly 12 to 1.
A national average that most states don't reach
The 22% figure is a national blend, and it hides enormous state-by-state variation, laid out state by state in the FY2026 state rankings. Only one state, Maine, funds tobacco prevention at 100% of its own -recommended level. Eight more states clear at least half. Seventeen states fund below 10% of their target, and nine fund below 5% — New Hampshire spent a total of $1 on tobacco prevention in FY2026, against a $16.5 million recommendation.
View data as table
| Maine | 100.0% | rank 1 of 51 |
|---|---|---|
| Oklahoma | 91.0% | rank 2 of 51 |
| California | 49.2% | rank 10 of 51 |
| All states (average) | 22.0% | national figure |
| Pennsylvania | 12.8% | rank 29 of 51 |
| Texas | 2.3% | rank 47 of 51 |
| New Hampshire | 0.0% | rank 51 of 51 — actual FY2026 spending was $1 |
California, the largest state economy, illustrates the gap even among better-funded states: it spends $171.2 million on prevention against a $347.9 million recommendation — good for 10th in the country, and still under half. Texas, the second-largest tobacco tax base in the country, funds at 2.3% of its target. Pennsylvania, despite an unfunded pension system that pulls at every other line of its budget, still manages barely more than an eighth of its number.
None of this is a money shortage in the way most of the systems this site covers are. The settlement checks arrive whether or not a state spends them on smoking. What happens instead is that tobacco revenue gets absorbed into general funds, debt payments, and unrelated programs — while more than 480,000 Americans die every year from cigarette smoking, including more than 41,000 from secondhand smoke exposure, and the estimates 5.6 million of today's Americans under 18 will eventually die of a smoking-related illness if youth smoking rates don't keep falling.
The takeaway
- The money was never the problem. States collect $21.7 billion a year from a settlement designed to fund tobacco control. They spend 3.4% of it on that purpose.
- The industry still outspends the counter-effort. Tobacco companies' $8.6 billion in annual marketing dwarfs the $728.6 million states spend fighting it — a 12-to-1 gap that has held for years.
- "National average" flatters the worst performers. 22% funded sounds low; it's still double what 17 states manage, and infinitely more than the $1 New Hampshire spent in FY2026.
Figures are for fiscal year 2026 as reported by the Campaign for Tobacco-Free Kids' state-by-state analysis; state prevention spending is self-reported by state tobacco control programs to that organization, and recommendations date to the agency's 2014 Best Practices guidance, the most recent version published.
Sources
- Campaign for Tobacco-Free Kids et al., Broken Promises to Our Children: A State-by-State Look at the 1998 Tobacco Settlement 27 Years Later (FY2026 report) — national revenue, prevention spending, and -funding-gap figures. tobaccofreekids.org
- Campaign for Tobacco-Free Kids, FY2026 State Rankings: States Ranked by Percent of -Recommended Funding Levels — the state-by-state funding table (Maine, Oklahoma, California, Pennsylvania, Texas, New Hampshire, and all other states' dollar amounts and percentages). cdn.tobaccofreekids.org
- Campaign for Tobacco-Free Kids, Sources: State Data (FY2026) — methodology for revenue, spending, marketing, and -recommendation figures, including underlying and citations. assets.tobaccofreekids.org
- U.S. , Diseases and Death fast facts — annual U.S. deaths from cigarette smoking (480,000+) and secondhand smoke (41,000+), and the 5.6-million-children estimate, citing the 2014 Surgeon General's report. archive.cdc.gov
- , Best Practices for Comprehensive Tobacco Control Programs (2014) — the basis for each state's -recommended prevention funding level. cdc.gov
- U.S. Federal Trade Commission, Cigarette Report for 2022 and Smokeless Tobacco Report for 2022 (October 2023) — industry-reported marketing expenditure figures, as compiled in the FY2026 state report. ftc.gov
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In 1998, 46 states sued the tobacco industry and won. The Master Settlement Agreement promised states billions of dollars a year, forever, in exchange for dropping the suits — money framed at the time as a war chest against smoking itself. Twenty-seven years later, the money still arrives on schedule. Almost none of it goes to the war.