An anti-smoking group is warning of “devastating effects” if South Dakota lawmakers approve Gov. Kristi Noem’s proposal to reduce funding for a tobacco use prevention fund by more than half.

A bill backed by Noem’s administration would drop the Tobacco Prevention and Reduction Trust Fund’s annual allocation from $5 million to $2 million. Legislators will consider the bill during the annual legislative session that began Tuesday in Pierre.

The fund sustains the South Dakota Tobacco Control Program, aimed at preventing South Dakotans from using tobacco products and helping residents quit through the South Dakota QuitLine.

Much of the funding goes toward contractual services for QuitLine. The state currently holds a one-year, $824,000 contract with Avera Health to provide telephone and other tobacco counseling services for Quitline and a one-year, $1 million contract with Pierre-based Vilas LTC Pharmacy to provide medication for QuitLine participants. The state allocated nearly $400,000 toward grants and subsidies last fiscal year for other prevention and counseling initiatives, according to the Bureau of Finance and Management. 

Ben Hanson, North and South Dakota government relations director for the American Cancer Society Cancer Action Network, said the cut “robs” money that was “promised” and overwhelmingly supported by South Dakota voters in 2006, when they passed an initiated measure to increase the tax on tobacco products and create the fund.

“We think it’d have long-term pretty devastating effects on respiratory health and eventually youth smoking rates,” Hanson said.

The trust fund receives revenue from the tobacco tax on cigarette, cigar and chewing tobacco sales. State law currently requires that the first $30 million from the tax goes to the state’s general fund, the next $5 million goes to the trust fund, and any further revenue goes to the general fund. Noem’s bill would keep that formula but change the $5 million trust fund allocation to $2 million.

Noem’s proposal comes as the state faces a tight budget year due to lower-than-anticipated sales tax revenues. Tobacco tax revenues are also falling. Noem’s administration projects the state will collect about $42 million in tobacco taxes this fiscal year, its lowest amount since 2006.

The QuitLine and other funded prevention efforts extend to non-tobacco nicotine products that have grown in popularity, including e-cigarettes, vape pens and nicotine pouches. But the tax doesn’t include those products. The state Department of Revenue cannot track non-tobacco nicotine product sales, a spokesperson told South Dakota Searchlight in an email.

Between 2022 and 2023, the percentage of U.S. high school students reporting tobacco and nicotine product use — including e-cigarettes — declined from 16.5% to 12.6%, but the percentage among middle school students increased from 4.5% to 6.6%, according to the Centers for Disease Control and Prevention. In South Dakota, 14.7% of high schoolers reported using e-cigarettes last fiscal year, according to the Bureau of Finance and Management, which was three times higher than the percentage that reported smoking and seven times higher than the percentage that reported spit tobacco use.

The Carroll Institute in Sioux Falls received about $17,000 in funding last fiscal year from the Tobacco Prevention and Reduction Trust Fund to purchase prevention curriculum for elementary school students. About 85% of the Carroll Institute’s funding comes from state government, including grants from other sources than the trust fund, said Carroll Institute Executive Director Tiffany Butler.

A decade ago, the institute focused on alcohol. Now, it focuses on vaping education, said Kristi VanDeRostyne, prevention services program manager. She said some students vape in the school bathroom or even the classroom during the day, using devices that look like pens, water bottles or USB flash drives.

“I know our state and nation are all worried about fentanyl and meth. It’s everywhere,” VanDeRostyne said. “Where do you prevent that from happening? By building those prevention skills at a young age while you still have that captive audience.”

Instead of reducing contributions to the trust fund, Butler said she’d prefer to see the fund’s grants expanded to cover more costs, including reimbursing staff time.