Subsidized health insurance, if a good idea, is an appropriate charge on the state's revenues as a whole. No program should be tied to the yield of a specific tax. Besides, the state should not have a financial stake in an unhealthy activity most people would like to see die out. Revenues surely will decline, and the program's supporters will put in a claim on the general treasury, as they should have been doing from the start, to compete with funds for schools and roads and everything else the state finances. That should surprise nobody, though it probably will.
Tobacco is a tempting revenue source because most people escape.
Smokers are concentrated in the lower-income groups. Raising the tax on cigarettes imposes a real burden on them, even if it does act as a deterrent to starting for some young people. That's the equivalent of an increase in the price of gasoline of 67 cents per gallon if each drives a car an average amount. This is an idea that may sound great, but it shouldn't be done.