['Federal', 'Anti-Tobacco', 'Efforts', 'Will', 'Negatively', 'Impact', 'State', 'Revenues', 'The', 'Clinton', 'Administration', 'is', 'waging', 'a', 'three-pronged', 'attack', 'to', 'get', 'a', 'bigger', 'piece', 'of', 'tobacco', 'revenues', 'for', 'the', 'federal', 'government:', '(1)', 'its', 'proposed', '55-cent', 'increase', 'in', 'the', 'federal', 'cigarette', 'excise', 'tax;', '(2)', 'its', 'examination', 'of', 'the', 'possibility', 'of', 'filing', 'a', 'federal', 'lawsuit', 'against', 'the', 'tobacco', 'companies;', 'and', '(3)', 'its', 'claim', 'to', 'a', 'substantial', 'share', 'of', 'the', 'States’', 'tobacco', 'settlements.', 'But', 'you', 'can', 'only', 'squeeze', 'a', 'lemon', 'so', 'hard.', 'Before', 'the', 'Administration', 'is', 'done,', 'the', 'States', 'may', 'not', 'see', 'any', 'money', 'at', 'all.', 'Any', 'Increase', 'in', 'Federal', 'Cigarette', 'Taxes', 'Will', 'Shrink', 'State', 'Revenues', 'e', 'A', 'S5-cent', 'increase', 'in', 'the', 'federal', 'cigarette', 'excise', 'tax', '—', 'as', 'the', 'Clinton', 'Administration', 'proposed', 'in', 'its', 'FY', '2000', 'budget', 'would', 'cause', 'a', '$2', 'billion', 'decline', 'in', 'state', 'revenues', 'in', 'the', 'first', 'year', 'with', 'similar', 'annual', 'losses', 'going', 'forward,', 'according', 'to', 'the', 'attached', 'analysis', 'prepared', 'by', 'the', 'American', 'Economics', 'Group', '(“*AEG™)', 'for', 'Philip', 'Morris', '(using', 'CBQO', 'and', 'Treasury', 'Department', 'elasticity', 'assumptions).', 'State', 'revenues', 'would', 'be', 'impacted', 'in', 'two', 'ways.', 'First,', 'state', 'cigarette', 'excise', 'tax', 'revenues', 'would', 'decline', 'due', 'to', 'lower', 'cigarette', 'sales', 'volumes', 'in', 'each', 'state.', 'Second,', 'payments', 'to', 'the', 'states', 'under', 'their', 'recent', 'settlements', 'with', 'the', 'cigarette', 'manufacturers', 'would', 'be', 'decreased', 'under', 'the', 'volume', 'adjustment', 'provisions', 'of', 'the', 'settlements.', '(In', 'most', 'states,', 'these', 'losses', 'would', 'be', 'offset,', 'but', 'only', 'in', 'small', 'part,', 'by', 'increased', 'state', 'sales', 'tax', 'collections.)', 'A', 'Federal', 'Lawsuit', 'Against', 'the', 'Tobacco', 'Manufacturers', 'Similarly', 'Could', 'Severely', 'Impact', 'State', 'Revenues', '¢', 'If', 'the', 'federal', 'government', 'were', 'to', 'recover,', 'for', 'example,', '$200', 'billion,', 'a', 'Wall', 'Street', 'analyst', 'has', 'predicted', 'that', 'cigarette', 'costs', 'would', 'increase', 'by', 'an', 'additional', '40', 'cents', 'per', 'pack.', 'Gary', 'Black,', '“DOJ', 'Lawsuit:', 'The', 'Coming', 'Federal', 'Settlement.', 'Search', 'for', 'Closure', 'Continues.”', 'Sanford', 'C.', 'Bernstein', '&', 'Co.', 'Inc.,', 'Jan.', '21,', '1999.', 'In', 'such', 'an', 'event,', 'then', '—', 'just', 'as', 'with', 'a', 'federal', 'excise', 'tax', 'increase', 'state', 'revenues', 'would', 'decline', 'due', 'to', 'lower', 'state', 'excise', 'tax', 'collections', 'and', 'reduced', 'payments', 'under', 'the', 'State', 'settlements’', 'volume', 'adjustment', 'provisions.', '(Again,', 'in', 'most', 'states,', 'these', 'losses', 'would', 'be', 'offset,', 'but', 'only', 'in', 'small', 'part,', 'by', 'increased', 'state', 'sales', 'tax', 'collections.)', 'Any', 'Such', 'Impact', 'Would', 'be', 'on', 'Top', 'of', 'the', 'Federal', 'Government’s', 'Claim', 'To', 'a', 'Substantial', 'Share', 'of', 'the', 'State', 'Tobacco', 'Settlements', 'e', 'The', 'Administration', 'claims', 'in', 'its', 'FY', '2000', 'budget', 'that', 'it', 'is', 'entitled', 'to', 'approximately', '$18.9', 'billion', 'of', 'the', 'settlement', 'payments', 'that', 'will', 'be', 'made', 'by', 'the', 'tobacco', 'manufacturers', 'to', 'the', 'states', 'through', 'fiscal', 'year', '2004.', 'Presumably,', 'the', 'federal', 'government', 'will', 'claim', 'a', 'similarly', 'large', 'share', 'of', 'the', 'payments', 'made', 'in', 'later', 'years.', 'Given', 'the', 'Federal', 'Budget', 'Surpluses,', 'There’s', 'no', 'Need', 'for', 'These', 'Federal', 'Cash', 'Grabs,', 'Which', 'Would', 'Decrease', 'State', 'Revenues', 'SEERLOG902']