OLYMPIA - March 9, 1999 - State Attorney General Christine Gregoire announced today Washington will receive at least an additional $394.9 million in settlement payments from the nation's major tobacco companies.
The money is Washington's share of an $8.6 billion Strategic Contribution Fund which was created as part of last November's settlement with tobacco companies. The fund was created as an extra award for those states which played a lead role in the lawsuits against tobacco companies and the negotiations which ultimately resulted in settlement.
The three-member panel established two criteria for awarding funds. Seventy percent of the money was awarded based on a state's work on the lawsuits and settlement talks. Washington received the largest award in the nation for this category. The remaining 20 percent was distributed based primarily on a settlement allocation formula in which New York and California received almost 25 percent of the annual tobacco payments to states. Washington's total award of $395 million was third highest in the nation, just behind New York and California.
“We earned it,” Gregoire said of the $395 million. “No other state worked harder on tobacco litigation or the negotiations.”
Washington was ten weeks into its trial against the tobacco industry when the settlement was reached, and Gregoire was the lead negotiator on behalf of state attorneys general.
The money is in addition to the $4 billion the state will receive from the master settlement agreement over the next 25 years (the payments will continue in perpetuity). The state will receive the first Strategic Contribution Fund payment beginning in the year 2008 and the remainder will be paid over the following ten years.
The three-member panel reserved ten percent of the Strategic Contribution Fund for allocation following a comment period on their plan. The money will be used to address any possible inequities or will be allocated based on the first criteria, which favors work on litigation and settlement.
Gregoire and Governor Locke have asked the Legislature to use $155 million of the approximately $323 million in restitution the state will receive from the settlement in the 1999-01 biennium to establish a special account to finance a long-term tobacco prevention and control program for Washington state. The account would pay for anti-tobacco advertising and education, accessible cessation programs, and other activities.
If approved by the Legislature, funding for the state's Tobacco Prevention and Control Account is expected to be depleted at approximately the same year that this new round of settlement payments would begin.
According to Gregoire, that would be an ideal time for the Legislature to look at replenishing the account.