Ind. Will Get Less Tobacco Settlement Money In ’14

Posted On October 18, 2013

By Mike Perleberg


image(Indianapolis, Ind.) – Indiana will see a $63 million hit to the tobacco settlement money it receives in 2014.


A federal arbitration panel says Indiana isn’t working hard enough to collect funds from cigarette companies not a part of a 1998 deal that requires manufacturers to make annual payments based on the number of cigarettes sold. Indiana is among six states that will see its settlement amount decreased, also including Missouri, Kentucky, Maryland, New Mexico, and Pennsylvania.


As a result, Indiana will see $63 million less in settlement money. The state will receive about $68.4 million next year, as opposed to $131.2 million before the arbitrators’ decision. Lawmakers say programs designed to promote healthy living will be affected by the decrease.  


Forty-six states reached a master settlement agreement with the nation’s four largest tobacco companies in 1998. The states had filed suit to recover the Medicaid costs of smoking-related illnesses. Indiana has received between   $125 million and $150 million each year since then, depending on sales volume.


The Indiana Attorney General’s Office said legal action to appeal the arbitration panel’s decision is likely to be taken soon. The State’s goal would be to more fairly reallocate and redistribute the questioned amounts among 26 states, not six.


Under the 15-year-old agreement, the State of Indiana has received more than $1.9 billion in settlement payments from tobacco companies.