State Recoups Money Lost In Tobacco Settlement Dispute

Indiana will recoup nearly 40 percent of the money it lost this year in a dispute over a 1990s tobacco settlement.

In 1998, 46 states reached a settlement with the four largest tobacco companies that pays out more than $200 billion over 25 years.  More than 40 other tobacco companies have since joined the settlement, and part of the deal requires states to ensure those companies are paying the correct amounts into an escrow account. 

An arbitrator last year ruled Indiana was one of six states that failed to adequately do so. The  ruling initially cost the state nearly half of the $131 million  it was supposed to receive in 2014. Indiana Attorney General Greg Zoeller appealed the ruling, but Thursday announced the state has instead reached an agreement with the tobacco companies.

In the new settlement, the state will get $93 million this year and $124 million dollars next year, with payments stabilizing in future years. That’s money that can be used to help fund tobacco cessation programs, community health centers and the state’s children’s health insurance program. 

In a statement, Zoeller says the new settlement provides the legislature with certainty as it prepares to write a new budget next session.