Receives $12 Million in Cigarette Restitution Funds
MD (March 4, 2009) - Attorney General Gansler today
announced that Maryland has received $12.2 million from tobacco
in a supplemental payment as the result of a settlement related
to the Master Tobacco Settlement Agreement (MSA.) The payment
represents Maryland’s share of $540 million that was
initially withheld in April 2008 by the tobacco industry from
its annual payment to states who participate in the MSA. The
payment has been deposited into the Cigarette Restitution Fund.
“We are thrilled with the receipt of these funds,” said
Attorney Douglas F. Gansler. “The funds are particularly
helpful as the State wrestles with a budget deficit and declining
revenues. The $12.2 million payment is available immediately to
benefit Maryland citizens and will provide critical support to
health-related programs across the State.”
The $540 million initially withheld by the tobacco industry related
to a dispute of its 2005 payments to the states. In April 2008,
tobacco companies placed the funds into a disputed payments account.
As part of ongoing arbitration related to past year payments,
tobacco manufacturers recently agreed to release the funds to
Under the MSA, participating tobacco manufacturers make substantial
payments to states that have reached settlements with the industry.
Since the agreement was executed in 1998, Maryland has received
more than $1.3 billion in payments. In addition to making payments,
the cigarette manufacturers who are parties to the settlement are
bound by a wide array of restrictions on the advertising, promotion
and marketing of cigarettes, including outright bans on targeting
youth and distribution of merchandise advertising a cigarette brand.
Studies show that the vast majority of current adult smokers began
smoking before the age of 18, and since the MSA took effect, youth
smoking rates nationally have dropped nationwide.
The Office of the Attorney
General administers the State’s
participation in the MSA.