Arkansas to net $22.7 million from tobacco agreement


LITTLE ROCK — Arkansas will receive about $22.7 million this year as its share of a settlement with tobacco companies under an agreement announced Thursday.

The settlement ends a long-running dispute over funds that have been held in escrow for nearly a decade.

The pact results from an arbitration panel’s ruling in the dispute between Arkansas and tobacco companies that signed the 1998 Master Settlement Agreement.

The tobacco companies argued that Arkansas and certain other states had violated the settlement agreement by failing to diligently enforce state tobacco laws. The state disagreed with the assertion.

“The tobacco companies’ challenge could have jeopardized the entire annual payments that the state receives, and with them, the important anti-smoking and public health efforts paid for by these funds,” state Attorney General McDaniel said. “This settlement assures that we no longer face that risk. This year, the state’s annual payment will increase to its rightful amount for the first time in nearly a decade. This resolution allows us to move forward with certainty in regard to these vital health programs.”

Under terms of the 1998 settlement, Arkansas receives about $60 million per year. Under Thursday’s agreement, the state receives 54 cents of every dollar of the disputed payment amount. The tobacco companies take the rest as credits on future payments.

It is possible that the state’s share will increase if other states join in the agreement, McDaniel said.

Arkansas led settlement efforts, joined by 16 other states, the District of Columbia and Puerto Rico.