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Falling tobacco sales slice into settlement

Wednesday, April 21, 2004 | 10:51 a.m.

The state received its yearly payment from a 1998 deal reached between cigarette manufacturers and almost every U.S. state, but because of a nationwide sales decline, the amount was $6.5 million less than was projected five years ago, a state official said.

Nevada Attorney General Brian Sandoval on Tuesday the state has received its $36.5 million portion of the annual tobacco Master Settlement Agreement.

This year's payout is slightly less than the roughly $43 million expected, said Tom Sargent, spokesman for the attorney general's office.

The payment to 46 states of more than $200 billion over 25 years comes after the 1998 agreement with major cigarette manufacturers. The four remaining states have their own agreement with the companies, which must also agree to marketing restrictions.

Amounts received are based on national cigarette sales, Sargent said.

The previous estimate was based on 1999 projections of national smoking sales, Sargent said, which prompted this year's disparity in funds received.

"The good news is that smoking is down, but that's its correllary," Sargent said.

Funds are adjusted based on a "base year" estimate of $8 billion in cigarette sales. That number is then adjusted based on increases or decreases in the number of cigarettes sold.

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