Cigarette sales dip, and so do payouts
LANSING -- The first series of payments to Michigan under the settlement of litigation with tobacco companies has come in nearly $37.4 million lower than anticipated, according to a report issued Monday by the state Senate Fiscal Agency.
The shortfall in the tobacco settlement fund is largely due to reduced sales of cigarettes, which automatically diminish the companies' obligation, said agency Director Gary Olson.
Nevertheless, Michigan has received more than $351 million from the settlement, which is supposed to compensate the state for public health care costs, since December. Officials said no programs are threatened.
State lawmakers have approved two major spending plans for the tobacco money -- the Michigan Merit Award scholarship program and investment in life sciences research at universities and hospitals.
Olson said the scholarship program fund is probably running ahead of its budgeted level because fewer students have qualified for the $2,500 scholarships than originally projected.