Attorney General Hardy Myers announced today that Oregon will receive its first payment of $27,543,797 later this month as required by the historic Master Settlement Agreement (MSA) with the tobacco industry. The payment will be received months earlier than expected because the requisite number of states have obtained final court approval as required by the MSA.
"This payment is the first owed our state by the tobacco industry for the public costs caused by smoking and for the industry's past efforts to cause young Oregonians to start smoking," Myers said. "I hope Oregon will emulate the wisdom of many states in using the settlement money to enhance public health and to reduce the role of tobacco in the lives of all Oregonians."
Oregon is projected to receive approximately $73 million in 2000 and annual payments thereafter in perpetuity. Projected payments for 2001 are $77 million, and $96 million in each of the years 2002 and 2003. All payments are subject to inflation and other adjustments specified in the MSA that will determine the exact amount due each year. (See DOJ's website: www.doj.state.or.us)
All payments will be deposited into a special account at the Oregon Treasury for transfer to the state's General Fund. Use of the funds is currently under the legislature's control but the legislature's flexibility will depend on the fate of Ballot Measure 89 (HB 2007) referred by the 1999 legislature to the November 2000 ballot. Except when the state faces an actual or projected budget deficit, that measure would allow appropriation only of the interest earned from the settlement payments to Oregon, and would permit appropriation only for the purposes specified in the measure. Only one of those purposes - "tobacco use prevention, education and cessation programs" - expressly relates to smoking, and the measure allows no more than ten percent of the interest to be spent for that purpose.
"I opposed HB 2007 in the legislature and will oppose Ballot Measure 89," Myers said. "The measure indefinitely locks up almost all the settlement proceeds despite urgent needs related to expansion of health insurance, programs of smoking prevention and cessation, and enforcement of consumer protection laws, especially those related to youth access to tobacco products."
"The measure also commits almost all the interest earnings to programs which, although worthy of added public support, are not directly related to the use of tobacco, especially by minors. According to the Oregon Health Division, 1 in 4 Oregon teenagers smokes regularly. We obviously have a significant problem that needs our immediate attention," Myers said.
In November, 1998, Myers joined 45 other state Attorneys General and four territorial Attorneys General to announce negotiation of the MSA. Minnesota, Florida, Texas and Mississippi had reached earlier, and separate, settlements when their lawsuits had started trial or had been about to start. The MSA imposes broad limits on tobacco advertising and promotion, prohibits targeting children, creates funding for anti-tobacco education and smoking cessation efforts, and requires perpetual payments to the settling states and territories.
Contact: Kristen Grainger, (503) 378-6002.