States Lose $197M in Tobacco Settlement Funds
Sixteen of the 46 states that joined 1998's $206 billion, 25-year national tobacco settlement will lose $197 million in payments after failing to pass specific legislation in time, the AP/Richmond Times-Dispatch reports. In Pennsylvania, for example, the state received $111 million instead of the expected $130 million in December, while California and New York both received $203 million -- $44 million less than expected. The other affected states included Alabama, Arizona, Connecticut, Delaware, Hawaii, Kentucky, Massachusetts, Michigan, North Carolina, Oregon, Vermont, Wisconsin and Wyoming. "We are dealing with such enormous figures here, that what appears to be a fairly small shift ends up being a relatively big adjustment," Sue Ellen Wooldridge of the National Association of Attorneys General said. Under the settlement, states needed to pass by June 1999 a law that would force tobacco manufacturers not participating in the settlement to sign on to the agreement or make annual payments into an escrow account equal to the amount of market share lost by the industry. States agreed to the provision in order to quell industry fears that the non-participating companies would "gain an advantage" because they would not face certain advertising and marketing restrictions (AP/Richmond Times-Dispatch, 1/11). Although all 46 states have now enacted the law and will receive full payments in the future, the 16 that lost funding last month may enlist the NAAG's help and sue to "shake the money loose." Sean Connolly, a spokesperson for Pennsylvania Attorney General Mike Fisher, said, "We're confident we will prevail" ( AP/Baltimore Sun, 1/11). Stewart Freeman, a Michigan assistant attorney general, added, "This is a brawl. It's not lost yet" (Wendland-Bowyer, Detroit Free Press, 1/11).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.