Kentucky received $126 million in 2021 annual tobacco settlement funds

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FRANKFORT, Ky. (WTVQ) – Kentucky received more than $126 million in the 2021 annual tobacco settlement payment from the Tobacco Master Settlement Agreement.

“MSA funds support agricultural diversification initiatives and health and education programs across the Commonwealth,” Attorney General Daniel Cameron said in announcing the state’s share. “Since signing the agreement, Kentucky has received more than $2.4 billion from tobacco manufacturers, and we ensure that these manufacturers continue to comply with the terms outlined in the agreement.”

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In 1998, Kentucky joined 52 states and territories in signing the Tobacco MSA, which, at the time, was a historic agreement with major cigarette manufacturing companies.

The agreement settled state lawsuits against major tobacco companies for Medicaid costs related to smoking. Each state determines how the funds will be used.

In addition to obtaining annual compensation for tobacco-related medical expenses, the MSA seeks to reduce underage smoking and decrease new smokers.

Under the agreement, tobacco manufacturer signatories agree to make payments based on an annually adjusted rate per number of cigarettes sold each year.

Participating manufacturers will continue to make payments to the Commonwealth while they sell cigarettes.

The Kentucky General Assembly has allocated half of the MSA funds specifically for agricultural diversification through grants distributed by the Office of Agricultural Policy.

The Tobacco Settlement Agreement Fund Oversight Committee oversees all agricultural grant application decisions and monitors expenditures under the early childhood development fund and the Kentucky Health Care Improvement Fund.