On April 25, 2018

Vermont received tobacco payment of $59 million; Settlement added $29 million to annual payment

MONTPELIER – Attorney General T.J. Donovan announced April 23 that Vermont has received $58.9 million from tobacco companies; $29 million of the total amount is the result of a recent settlement with tobacco companies. This $29 million is on top of the annual payment Vermont receives each April from these companies related to the 1998 “Master Settlement Agreement” (MSA). Between the recent settlement and annual MSA payment, Vermont received a total of $58.9 million last Thursday, April 19.

In March, the Attorney General’s Office projected that Vermont would receive approximately $28 million from the recent settlement.

The Vermont Legislature will determine how the settlement funds will be spent. Legislative leaders and the governor have pledged their intention to use half of the settlement funds to fight opiate addiction in Vermont.

“I am proud of the work my office did on this deal and I can think of no more urgent public health crisis than the opiate epidemic,” said Attorney General T.J. Donovan.

Vermont State Treasurer Beth Pearce reviewed the settlement: “Thank you to the Attorney General’s office for pursuing this major settlement. We agree that this is the best deal for Vermont. It is always a success when we are able to achieve a settlement that brings in even more money than previously assumed.”

The MSA requires signatory tobacco companies to collectively pay Vermont millions of dollars annually, in perpetuity.

In return, Vermont must “diligently enforce” laws against tobacco companies that are not parties to the MSA. If Vermont fails to diligently enforce those laws in a given calendar year, it stands to lose a substantial portion, or potentially all, of its annual MSA payment for that year. Disputes over this diligent enforcement go to arbitration. Last month, the tobacco companies and Vermont settled these “diligent enforcement” disputes for every year from 2004 through 2017.

States and tobacco companies signed the MSA in 1998 to settle states’ claims that major tobacco companies were deceiving the public about the health consequences of smoking.

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