State receives first payment in tobacco settlement
It's no longer just talk. The money is here.
Tennessee has pocketed $202,905,080.56 in the first installment of tobacco lawsuit settlement money.
Meanwhile, mailings began yesterday of almost 58,000 checks -- drawn from another pot of money -- to state tobacco farmers.
The farmers' checks, totaling $28.5 million, are all expected to arrive by the end of the month.
"We are very proud that our efforts have now cleared the way for our state to receive this money," said Tennessee Attorney General Paul Summers.
The state persuaded tobacco companies to release the money despite a pending lawsuit in which part of the money is sought for people made sick by tobacco and for attorneys' fees. A similar lawsuit was to be heard at 9 a.m. today in Davidson County Circuit Court.
The nearly $203 million in state money won't be spent yet.
"It has become part of a commingled investment fund," said Dale Sims, executive assistant to the state treasurer.
The fund -- for short-term investments -- brings about 6-6.5% interest. State lawmakers rejected proposals to put the money in long-term investment funds. They called for the first year's payments to go for agricultural and health programs.
An advisory panel is supposed to make recommendations on specifics. It's up to the General Assembly to allocate the money.
While farmers are expected to get about $392 million over 12 years from a trust fund tobacco companies set aside for them, the state expects about $4.8 billion over 25 years.
The tobacco farmers' money is compensation for an anticipated drop in tobacco use and sales. The state money is intended as reimbursement for the costs of public health care from tobacco-related illnesses.