Round two of tobacco payments under way
FRANKFORT -- Applications for the second round of payments from the national settlement between cigarette manufacturers and tobacco growers will be mailed next week, and checks could go out in December.
About $109 million was sent in 250,000 checks in the first round of payments last year, though many people received more than one check. The payments are made equally to the owners of burley tobacco quotas, the owners of property used to produce tobacco and the people who provide the labor for the crop.
The amount of money available from the companies specifically for farmer payments is less this year -- about $84 million. The 2000 General Assembly, though, set aside up to $40 million from a separate settlement with tobacco companies to augment farmer payments to at least the same level as last year.
The applications will be mailed to farm operators, but each person involved in the production of that crop should be included on the single form. State officials believe the forms will be easier to fill out this year, but a toll-free help line will be available from 8 a.m. to 9 p.m. EDT on weekdays.
The applications must be completed and returned by Oct. 31.
Cigarette manufacturers agreed to pay states to reimburse the health-related costs of smoking. Kentucky is supposed to receive about $3.4 billion in the next 25 years from that settlement.
The legislature decided to divide the so-called Phase One payments among state and local groups to help diversify agriculture, in addition to propping up farmer payments.
A separate agreement will have manufacturers paying farmers for their lost income from depressed sales of tobacco. Kentucky is to get slightly more than $1 billion from that fund over 12 years.
Both settlement funds, though, can be reduced by the decline in cigarette sales. That decline has already been demonstrated in the Phase Two payments to Kentucky, which will be about $9 million to $10 million less than the original estimate.