Indiana’s New Settlement With Tobacco Companies Will Bring $217M

Posted On June 27, 2014

By Mike Perleberg

smoking-cigarette.jpg(Indianapolis, Ind.) – The State of Indiana has reached a settlement with tobacco companies that will net approximately $217 million for the state.

Attorney General Greg Zoeller announced the settlement for this year and next on Thursday.

The settlement stems from Indiana’s long-running dispute lingering from the original 1998 master settlement agreement between 46 states and the major tobacco companies. In that agreement, the companies agreed to pay the states $206 billion over 25 years.

The $217 million is more than the state would have gotten in a determination by a federal arbitration panel, but it’s less than had been expected under the 1998 agreement.

“Nobody gets everything they want in a lawsuit settlement, but Indiana’s recovering this amount and preserving future payments at the end of this process is a better outcome than if we had not appealed and not entered into settlement talks with the tobacco defendants. By clawing back a larger amount of money from Big Tobacco, we will provide the Legislature some certainty going into the next budget cycle and continue to fund the health programs near-term that depend on this money,” Zoeller said.

The funds will help the state pay for a variety of health-related programs dependent on tobacco sales.

Under the agreement, Indiana will avoid multiple rounds of additional arbitration, allowing for some budget certainty, according to the attorney general’s office. The annual amounts will be between $124 million and $133 million through the next biennium budget cycle, then reduce to between $110 and $115 million.


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