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NM gets $54.3 million tobacco payment

SANTA FE – New Mexico has received a nearly $54.3 million payment from big tobacco companies – believed to be the biggest ever under the terms of a 1998 settlement agreement – that could bolster state spending on tobacco education and health programs, Attorney General Hector Balderas said Thursday.

However, the payment isn’t expected to be a cure-all for the state’s budget woes, as state economists had already factored most of the money into revenue estimates they released in December 2016.

Although the state receives a payment annually under the agreement New Mexico and 45 other states signed with big tobacco companies in 1998, it got an additional $14.5 million this year after a judge sided with the Attorney General’s Office in a dispute over whether tobacco companies had previously paid less than they should have.

“At a time of severe budget shortfalls and economic crisis, this record recovery will ensure additional funds go to New Mexico children, Medicaid, HIV patients and smoking cessation programs,” Balderas, a Democrat, said in a statement.

Money from the annual settlement payments was originally intended to be split between a state Tobacco Settlement Permanent Fund and tobacco education and health programs, but that hasn’t always happened in recent years.

Instead, lawmakers have used the fund to help balance the state’s budget and spent money from the annual payouts to bolster the state’s cash-strapped lottery scholarship fund.

The 1998 settlement was reached after tobacco companies that had been sued over the harmful effects of cigarette smoking agreed to make ongoing annual payments to states and stop certain advertising practices.