Politics of Budgeting for Health: Lessons from the Master Settlement Agreement

The landmark Master Settlement Agreement (MSA) of 1998 created a sizeable, new revenue stream for the states. Advocates for the settlement anticipated that a considerable portion of the MSA funds would be dedicated to funding public health and tobacco control programs. Over the past five years, advocacy groups have watched in frustration as smaller and smaller portions of the MSA revenues have been spent on population health. Case studies and targeted analyses across the states have been used to describe the diversion of funding and failed investments in tobacco control. The health literature, however, has devoted little attention to broader theories of public budgeting, theories which may explain why states' use of MSA funding should have been anticipated.

This research explores the behavior of states in allocating MSA funding, recognizing the influences of economic forces, political and procedure factors, health status, and financing needs. Quantitative analyses combined with qualitative interviews with key MSA stakeholders illuminate the underlying legal and financial policy strategies. To secure needed resources, public health leaders must better understand the factors and processes of public budgeting. The MSA provides an exceptional venue for comparative learning about this critical policy process through which governments and stakeholders make decisions about the allocation of scare resources. By analyzing the factors which have influenced states' investment choices with the MSA funds, the public health community may better understand the politics of budgeting and my learn techniques to more effectively secure future revenue streams.