Home » Kentucky receives more than $90M in tobacco settlement money this week

Kentucky receives more than $90M in tobacco settlement money this week

State has collected nearly $1.9 billion since 1999

FRANKFORT, Ky. (April 20, 2016) — Attorney General Andy Beshear announced today that Kentucky received more than $90 million in tobacco settlement money this week.

“The Master Settlement Agreement funds have a positive impact on the commonwealth, funding early childhood education, health programs and cancer research, and are helping to support our farmers and create sustainable farm-based businesses,” Beshear said. “I am proud these funds are used to improve the education and health of our children.”

This is the 18th year since the signing of the landmark Master Settlement Agreement (MSA). Under the MSA, the tobacco companies agreed to make annual payments, in perpetuity, worth approximately $208 billion to states and territories that are signatories to the agreement.

Since 1998, tobacco companies have had to compensate states for some of the medical costs associated with tobacco-related illnesses and restrict advertising and promotion of cigarettes in the United States. The payments are determined according to a formula that is calculated, in part, by the number of cigarettes sold by companies that have agreed to join the settlement.

Most of the MSA payment is paid by the three largest cigarette manufacturers – Philip Morris USA, RJ Reynolds and Lorillard (the latter two now merged as Reynolds American).

Since the first payment in 1999, Kentucky has collected nearly $1.9 billion under the agreement.

On behalf of the state, the Attorney General’s Office monitors and enforces the terms of the MSA and the related statues, in cooperation with other agencies including the Department of Revenue and the Office of State Budget Director.

Each state determines how the MSA funds are distributed and spent.

In Kentucky, the General Assembly has designated half of the MSA funds to be invested in agricultural diversification through grants issued by the Governor’s Office of Agricultural Policy, which administers the Kentucky Agriculture Development Fund.

The Tobacco Settlement Agreement Fund Oversight Committee oversees the determinations on grant applications from the agricultural fund. Kentucky’s additional MSA revenues are used to help improve the health outcomes of Kentucky children and families.

The participating manufacturers paid the settling states approximately $6.8 billion this week, bringing the total payments made under the MSA thus far to more than $106 billion.