Indiana Settles Tobacco Settlement Dispute

Indiana reached a settlement with tobacco companies Thursday that will pay the state $93 million this year and $124 million next year.

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Photo: Barry

Indiana reached a settlement with tobacco companies Thursday that will restore funds to the state from a previous settlement from the 1990s.

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

The money is used to help fund tobacco cessation programs, community health centers and the state’s children’s health insurance program.

46 states reached a settlement with the four largest tobacco companies in 1998 that pays out more than 200 billion dollars 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 fund.

An arbitrator last year ruled Indiana is one of six states that failed to adequately do so.

Indiana Attorney General Greg Zoeller appealed the ruling, but Thursday announced the state has instead reached an agreement with the tobacco companies.

The arbitrator’s ruling initially cost the state nearly half of the $131 million it was supposed to receive in 2014. In the new settlement, the state will get $93 million this year and $124 million next year, with payments stabilizing in future years.

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

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