Smoking In U.S. Declines Sharply

The association's study found that about 378 billion cigarettes were sold in the United States last year -- the lowest number since 1951, when the population was half of what it is today. Although the official 2005 total did not take into account growing but untraceable Internet sales and other black-market supplies, officials said those sources remain minuscule compared with legal purchases.

The heart of the agreement reached between the states and the tobacco industry in 1998 is the $246 billion being paid to settle lawsuits over cigarette-related health costs. Tobacco companies generally passed their costs along in the form of higher prices, which in turn reduced cigarette sales.

But Miller and other tobacco-control advocates said yesterday that the agreement has also helped change the public's view of smoking. With the banning of ads such as those featuring the character "Joe Camel" and the expansion of aggressive anti-smoking ad campaigns, they said, the message that many young people are getting is dramatically different from the one of 10 years ago, when teenage smoking was on the rise.

"The long-term trend is perfectly clear and consistent," said Mark Greenwald, director of the Tobacco Project for the association of state attorneys general. "What we have is an enormous social change in terms of what is considered acceptable behavior."

Although the steep decline in cigarette sales has been a public health boon, it has become something of a financial problem for some states. Because industry payments to states are based to some extent on the number of cigarettes sold, the settlement revenue has dropped.

The 46 states that signed the settlement initially expected about $6.5 billion this spring, for instance, but the tobacco companies have said that they may be entitled to cut the payments by as much as $1.2 billion this year. Some of that decline would be the result of dropping sales, and some could come from other adjustments allowed under the settlement.

In particular, the major tobacco companies have said, the agreement allows them to reduce payments if their collective market share falls below a certain threshold -- something they say occurred in 2003 after a substantial number of Americans switched to low-cost generic cigarettes. The states disputed that interpretation, and the issue is in arbitration.

But Iowa's Miller said states are ready for reductions in tobacco payments that are based on declining sales, and even welcome them.

"We knew from the beginning that if we succeeded in changing the cigarette culture, that sales would drop and so would our payments," he said. "But states deal with rising and declining revenues all the time, and this is one decline we're quite happy to see."