Summary: The U.S. Centers for Disease Control and Prevention (CDC) recommends that Iowa spend $36.7 million a year to have an effective, comprehensive tobacco prevention program.  Iowa currently receives $11.2 million a year for tobacco prevention and cessation, which includes both state and federal funds.  This is 30.5% of the CDC's recommendation and ranks Iowa 21st among the states in the funding of tobacco prevention programs.  Iowa's spending on tobacco prevention amounts to 3.6% of the estimated $311 million in tobacco-generated revenue the state collects each year from settlement payments and tobacco taxes.

Recent Developments: The FY2009 budget approved by the Legislature and Governor Chet Culver (D) provides $10.4 million in new state funds for tobacco prevention and cessation programs (in addition to some carry-over), a decrease from the $12.3 million allocated in FY2008 but still a significant increase from FY2007 funding. The recent increase in funds is due to the $1 per pack increase in the cigarette tax that was approved in March 2007. The tax increase took effect on March 15, 2007, and increased Iowa's cigarette tax from 36 cents per pack to $1.36 per pack. FY09 funds are provided through three sources: the Healthy Iowans Tobacco Trust Fund, the Health Care Trust Fund, and the general fund. The Healthy Iowans Tobacco Trust Fund was created following the securitization, or selling off, of a portion of the Master Settlement Agreement funds for a one-time lump sum in 2001.  As a result of this and subsequent securitization of the remaining MSA funds, settlement payments in Iowa are dedicated entirely to debt service on the securitization bonds. The FY2009 budget appropriated all of the remaining balance of this trust fund, so it will no longer exist. The Health Care Tobacco Trust Fund was created under the tobacco tax increase and is funded on an ongoing basis with some of the tobacco tax revenue. Iowa will receive a total of $11.2 million in state and federal fund for tobacco prevention programs.