JEFFERSON CITY, Mo. (AP) - Attorney General Chris Koster said Monday he’s reached a deal with major tobacco manufacturers to restore $50 million in lost tobacco settlement proceeds to Missouri, but it is contingent on action from the Legislature.
Koster said the state will get the money back plus an eventual extra $11 million annually, as long as lawmakers this session tighten laws on smaller companies that didn’t sign the original settlement.
“Recovering $50 million and preserving future payments provides the legislature some certainty going into the next budget cycle and continues to fund the programs that depend on this money,” Koster said. “I hope that we are able to work together to protect a significant revenue stream that benefits Missourians.”
The dispute is over money guaranteed to Missouri and 45 other states through a 1998 settlement with major tobacco manufacturers. It’s aimed at covering the costs of providing health care to people with tobacco-related illnesses.
The state typically gets about $130 million annually.
Missouri lost $50 million after an arbitration panel decided the state in 2003 didn’t properly enforce part of the settlement requiring other tobacco companies that didn’t sign the 1998 agreement to pay into an escrow account.
An appeal is pending with the Missouri Supreme Court.
Gov. Jay Nixon last year cited loss of those funds as reason to restrict $46 million in planned spending.
Koster said tobacco manufacturers that signed the original agreement will restore the $50 million if lawmakers this session require other companies to pay their full share into the escrow account. State law now allows companies that concentrate sales in a few states to only pay in a portion to escrow.
If lawmakers pass that legislation, the state also will get an additional $11 million per year starting in 2020 and protection against any arbitration claims between 2004 and 2014. Passing the bill before mid-April, when the tobacco settlement money typically is paid, would mean the state likely would get the $50 million this fiscal year, Koster said.
Whether lawmakers will pass such a measure is unclear.
Koster in a letter to lawmakers said Nixon first asked legislators to tighten laws on small tobacco companies in 2002, when he was attorney general. Nixon and then Koster have asked for such a bill every year since without success.
Senate President Pro Tem Ron Richard and Senate Appropriations Committee chairman Sen. Kurt Schaefer on Monday said they’re still reviewing the agreement.
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