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Pennsylvania's tobacco issue

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Pennsylvania, from the landmark tobacco settlement in 1998 between "Big Tobacco" companies and the states, was awarded $11.3 billion; the money is being paid out yearly until 2025. The purpose of the settlement was to free the tobacco corporations and states from any further litigation.

PA has received a total of 5.2 billion so far, but may be in jeopardy of losing millions of dollars per year due to an enforcement issue. This enforcement issue puts in danger many other health programs that state funds through the tobacco settlement money.

In a ruling from a three judge panel of arbitrators; due to the state doing a poor job in the enforcing some of the terms in the settlement in 2003, "Big Tobacco" can reduce their settlement amount for that year. Based upon this request from tobacco companies, PA stands to lose almost three-quarters of the $320 million that they are scheduled to receive in April of this year.

Additional years starting from 2004 have not yet been reviewed at this point, but could be addressed later. This point has caused Pennsylvania to hire outside lawyers, to help their overwhelmed state litigators deal with additional arbitrator hearings and new cases; as Pennsylvania may take "Big Tobacco" companies back to court.

Along with reduction of the money, the state is now spending more money defending itself and attempting to retain money already collected. In total, this means less money from the state for certain programs.

Health insurance for working disable adults, home care for the elderly, medical research, and even anti-smoking program are some that could be in danger of losing funding through the state battling these tobacco issues.



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