Lawmaker: Tobacco settlement aids health programs

Indiana's settlement of its dispute with major tobacco companies — a deal bringing the state $217 million over the next two years — will help meet the state's obligations for several health-related programs, a top lawmaker says.

Indiana had received about $68 million in April under the terms of an unfavorable October federal arbitration ruling. That's far less than the $131 million the state had expected under the nationwide agreement reached in 1998 between 46 states and big tobacco companies.

But the settlement announced Thursday by Attorney General Greg Zoeller calls for Indiana to get another $24.8 million this year, bringing its 2014 total to $92.8 million. Indiana will also receive a $124 million payment in 2015.

State Sen. Luke Kenley, chairman of the Senate Appropriations Committee, said the most recent settlement will provide the certainty needed to meet Indiana's obligations to several health care-related programs.

"It's important to stabilize that source of revenue and provide some predictability, so that taxpayers aren't asked to make up the difference," Kenley, R-Noblesville, said in a statement.

Indiana has received more than $1.9 billion since 1999 from tobacco companies that were part of the nationwide agreement, The Indianapolis Star reported.The state uses that money to pay for a variety of health-related programs, including community health centers, the Children's Health Insurance Program, children with special health care needs and residential services for developmentally disabled persons

State lawmakers expressed concerns last year that a major drop in the settlement funds would put some of these programs in jeopardy, given the state's tight budget.

A federal arbitration panel decided in September to decrease Indiana's share because it found the state had failed to do enough to collect funds from cigarette companies that weren't part of the original settlement.

Zoeller announced the new settlement a month before a scheduled court hearing over his appeal of the arbitration ruling.

"Nobody gets everything they want in a lawsuit settlement, but Indiana's recovering this amount and preserving future payments at the end of this process is a better outcome than if we had not appealed and not entered into settlement talks with the tobacco defendants," he said in a prepared statement.