Government

Iowa tobacco payment almost $50 million this year

State pockets 22 percent, rest goes to bondholders

New York Attorney General Dennis Vacco, flanked by Pennsylvania Attorney General Mike Fisher and Iowa Attorney General T
New York Attorney General Dennis Vacco, flanked by Pennsylvania Attorney General Mike Fisher and Iowa Attorney General Tom Miller (right), speaks at a Nov. 16, 1998, news conference about the $206 billion settlement states had reached with cigarette makers. Iowa recently received $49.4 million for its annual share of the settlement. (Associated Press)

DES MOINES — Iowa’s share of the 1998 landmark settlement with U.S. tobacco companies has now topped $1.3 billion.

Officials in Iowa Attorney General Tom Miller’s office said Wednesday the Iowa treasury has received an annual transfer payment of about $49.4 million from tobacco companies involved in the multistate Master Settlement Agreement — the largest such settlement in U.S. history.

Iowa will continue to receive yearly settlement payments in perpetuity, based on the number of cigarettes sold in the United States.

In the last 22 years, Iowa has received more than $1.3 billion from the agreement, in which Miller played a key role.

“Our office carefully monitors and aggressively enforces this agreement so Iowa gets its fair share of the settlement,” Miller said in a statement.

About $10.9 million of this year’s payment — or 22 percent — will go to the state, according to the AG’s office.

The remaining 78 percent will be used principally to pay people who bought the bonds issued by the Tobacco Settlement Authority.

ARTICLE CONTINUES BELOW ADVERTISEMENT

In 1998, Miller and attorneys general of 45 states signed the MSA with the nation’s four largest tobacco companies to settle lawsuits to recover billions of dollars in state health care costs associated with treating smoking-related illnesses.

Since then, several other tobacco companies have signed onto the agreement. The 2020 payment came from 29 companies, including Philip Morris USA, R.J. Reynolds, Santa Fe Natural Tobacco, Vector and Commonwealth Brands.

The settlement created restrictions on the advertising, marketing and promotion of cigarettes, including a ban on targeting children through advertising.

It also includes prohibitions on outdoor advertising of cigarettes, advertising of cigarettes in public transit facilities, the use of cigarette brand names on merchandise, and a host of other restrictions.

The central purpose of the master agreement was to reduce smoking, particularly among youth.

Since it was announced, cigarette sales in the United States have fallen substantially.

Adult smoking rates have fallen from 24 percent of the U.S. population in 1999 to 13.7 percent in 2018, according to the U.S. Centers on Disease Control and Prevention.

Only 5.7 percent of high school seniors reported smoking a cigarette in the past 30 days in 2019, though vaping increased dramatically, according to the Monitoring the Future survey.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.