The states will spend $567.5 million of their own money and $62 million in federal grants on programs to prevent tobacco use - about 17 percent as much as the $3.7 billion the federal Centers for Disease Control recommends, the report says.
Thirty-four states and the District of Columbia trimmed funding for such programs this year. New York cut the most at $25.2 million, or 31 percent, the report said.
"All the states are struggling to figure out how they're going to keep services whole in their states, and there are no easy places left to look," said Debra Miller, director of health policy for the Council of State Governments.
States will collect more than $25 billion in a combination of tobacco taxes and legal settlements from the tobacco industry this fiscal year. They will spend about 2.3 percent of that on programs to prevent or stop tobacco use, the report says.
Released by the Campaign for Tobacco-Free Kids and several other groups, the report says smoking-related health care costs $95.9 billion annually nationwide.
Tobacco companies agreed in 1998 to settle lawsuits several states brought over smoking-related health care costs by paying them about $206 billion over more than two decades.
The largest U.S. tobacco company, Altria Group Inc. - based in Richmond, Va., and maker of Skoal chewing tobacco and top-selling Marlboros - pays a majority of that. Spokesman David Sutton said states should use more of the settlement money for youth smoking prevention and health-related initiatives.
Matthew Myers, president of the Campaign for Tobacco-Free Kids, said states on average have never spent as much the CDC would like, but the total has declined dramatically in recent years.
Only one state - North Dakota - is meeting its CDC recommendation for this year, $9.4 million. Tennessee trails the list, spending only $1.5 million for prevention, compared with the $71.1 million the CDC recommends.