Interesting piece. A few quibbles:
Greg implies that using tobacco money to prop up state budgets is a winning tactic for the GOP at the state level.
In the short run there is something to this. Presently, the budget surpluses serve a similar function -- they are an even larger bounty that will be used for some combination of tax cuts and spending increases, a win-win situation for the party fortunate enough to be in power, right now the GOP.
BUT, the nature of this political victory is arguably an ideological surrender -- the perpetuation of the current size of the public sector and its revenue system. From this standpoint, the GOP risks a revival of the 'dime-store New Deal' charge. If government is good, why not have the guys who know how to do it up -- the Dems?
Secondly, the tobacco money is likely to erode over time, and the surpluses will vanish in the next recession. But the spending programs will remain. At that point this will create a crisis for the state GOP's, who were prospering on the illusion that government is cheap. Again, this goes to the ideological surrender alluded to above.
Thirdly, even inflated tobacco revenues will remain a small part of state budgets (under five percent, if I'm not mistaken).
Finally, the focus of the article tends to elevate tobacco beyond its necessary importance. Any number of other issues could come up and blow tobacco off the map as an important issue, including on the state level.
For example: welfare reform will arguably turn into a debacle in three to five years as four developments come to a head: a) the effects of a recession; b) the increasing bite of the 'time limits', meaning more ineligible families in poverty; and c) the job placement mandates on states, which they will not be able to meet; d) the erosion of Federal aid available for welfare-to-work support services.
This is not to say that welfare reform was not an atrocity from the get-go, or that it has not already caused needless suffering. Only that its deficiencies will move from a marginal to a central political concern.