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Largest tobacco settlement payments yet going out to state, counties

Associated Press Writer

April 14, 2002, 6:49 PM EDT

ALBANY, N.Y. -- Governments benefitted Sunday from the largest single payment yet made by tobacco companies under their settlement with New York for smoking-related public health costs.

The companies were scheduled to pay New York $681 million Sunday.

Coupled with about $19 million more due late this week, April's payment of about $700 million is by far the largest of the seven going to the state under the tobacco company settlement since late 1999.

The previous high was the $519 million received by New York in April 2001.

State Attorney General Eliot Spitzer, who oversees the payment schedule by the tobacco companies, said this "huge influx" of funds under the settlement "will help reduce the amount of taxes that New Yorkers will have to pay in the future."

"New Yorkers usually dread April 15th because it is tax day," Spitzer said Sunday.

The $681 million goes to the state (51.2 percent or $348.5 million), New York City (26.7 percent or $181.6 million) and the 57 counties outside the city (the other 22.1 percent or $150.9 percent).

Spitzer said county governments in particular have been budgeting for the April payment conservatively, meaning the larger-than-expected checks could ease what are tough fiscal times for governments everywhere in the state.

Counting the April payment, New York has received $2.75 billion since December 1999 under the tobacco settlement. It is expected that the state will collect at least $25 billion under the settlement by 2025, out of an estimated $200 billion nationwide, with other payments due after that year.

The state, New York City and county governments can spend the money for any purpose. Smoking opponents say that governments have all basically failed to devote enough money to campaigns to cut smoking among adults and to deter young people from starting.

Still, Spitzer said Sunday that experts nationwide have seen a 19 percent decrease in smoking nationwide since 1997.

The size of the payments are determined under a complex formula that takes into effect the shipment of tobacco products nationwide, inflation and the sales of tobacco companies which are not part of the settlement.

After an initial payment in 1999 tobacco companies will make two payments each year until 2004 _ each January and April _ then annual payments thereafter each April.

Copyright © 2002, The Associated Press