State Will Receive $73.2 Million in Tobacco Settlement Restitution

Olympia - April 17, 2000 - Washington state today will receive $73.19 million in restitution from the tobacco industry. The payment is the first of the perpetual annual payments mandated by the 1998 Master Settlement Agreement between state attorneys general and the major tobacco manufacturers.

Washington’s annual restitution payments are due each April. In addition, Washington has already received two of five initial payments, due each January through 2003, for approximately $95 million.

Today’s installment pushes Washington’s cumulative total from the tobacco settlement to over $168 million. The state is expected to receive approximately $4.5 billion in settlement payments through 2025. That will include approximately $495 million for the lead role the state played in the tobacco lawsuits and settlement negotiations.

Settlement payments are adjusted annually for inflation and fluctuations in the volume of domestic shipments of cigarettes. Due to a 14 percent volume reduction in 1999, the payment was adjusted from earlier estimates of approximately $80 million.

"A number factors have led to the decline in total cigarette domestic sales, including a voluntary price hike by the industry and increased awareness of the issue since the settlement," said Attorney General Christine Gregoire. "Historically, however, consumption plunges after a price hike but then creeps back up unless states fight tobacco use with a sustained, comprehensive prevention and control plan that includes public education, school and community activities, and cessation programs."

In 1999, the Legislature set aside $100 million for a comprehensive tobacco prevention and control plan. House and Senate supplemental budget proposals for 2001 contain an appropriation from the Tobacco Prevention and Control Account for this purpose.

An adequately funded tobacco plan for Washington state should include no less than the $20 million included in the Senate budget proposal, with the remaining money going to public health programs, Gregoire said.

"The Legislature needs to do the right thing with this money to prevent future generations from becoming addicted to tobacco, with all the harm and expense that brings with it," the Attorney General said.

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