Santa Fe New Mexican

N.M. slated to receive $50M this year from Big Tobacco.

Amount includes $14.5M increase; funds likely to aid state’s lagging coffers instead of smoking-related issues

- By Robert Nott Contact Robert Nott at 505-986-3021 or rnott@sfnewmexic­an.com.

New Mexico will receive an additional $14.5 million this year from Big Tobacco after a state District Court judge ruled this week that the cigarette industry had been shortchang­ing the state in its annual payments under a nearly 20-year-old settlement agreement.

The state’s total $50 million-plus payment from tobacco companies for 2017, expected in April, is “the largest ever for New Mexico,” the Attorney General’s Office said in a statement released Tuesday. In 2016, the state received just under $40 million.

James Hallinan, a spokesman for the attorney general, said in the statement that First District Court Judge Raymond Ortiz, in a ruling Monday, agreed with the Attorney General’s Office that the nation’s biggest tobacco companies had been contributi­ng too little to New Mexico under a 1998 settlement agreement with 46 states. The deal requires the firms to make annual payments to the states in perpetuity as reimbursem­ent for health care and other costs related to tobacco use. The state received nearly $670 million from the companies between 1999 and 2016, according to data provided by Hallinan.

In 2000, the state created a Tobacco Settlement Permanent Fund, intended to support smoking-prevention programs, cancer research and other public health initiative­s.

But given the state’s economic challenges, this year’s tobacco payment to New Mexico almost certainly will find its way into the state’s general fund. Legislatio­n signed by Gov. Susana Martinez during a special session last fall allows the state to sweep funds from the tobacco fund into the general fund for emergency use.

The tobacco fund recently has become the go-to place for patching the state’s budget holes, said Charles Wollmann, a spokesman for the State Investment Council, which oversees permanent funds.

He called this year’s amount “a pretty significan­t inflow.”

“We won’t get to keep any of the money in the permanent fund,” he said. “It comes to us, stays a month or two, and the Legislatur­e sweeps it out for the next fiscal year.”

“Obviously, this helps us,” state Sen. John Arthur Smith, D-Deming, chairman of the Senate Finance Committee, said of the extra $14.5 million. “Every little bit helps.”

One of Smith’s bills from the recent legislativ­e session — Senate Bill 154 — would allow the Legislatur­e to appropriat­e all of the money from the tobacco settlement in fiscal year 2018 to help balance the state budget. That bill is on the governor’s desk, awaiting her signature.

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