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Q

I own approximately $2.2 million of New York and New Jersey tobacco bonds. I am told those states did not accept the 54% tobacco bond settlement (“More Concern Over Tobacco Bonds“). I’ve had difficulty finding out how much is being held in escrow for each state and the total amount paid each year.

A

James A. Klotz responds:

Yes, the information you’re looking for is hard to find. Since the Master Settlement Agreement (MSA) between the tobacco companies and states is a private settlement, the type of information you’re seeking is not readily available, and we do not have access to the specific information you have requested.

The amount a state receives each year depends on the prior year’s domestic cigarette shipments. These numbers are reported privately to an independent accounting firm that tallies that information, determines each manufacturer’s liability, and divides the receipts from those companies among the states according to a predetermined formula. Thus, each year’s tobacco settlement receipts that a state receives depends on industry shipments in the prior year.

This number is also affected by various adjustments built into the MSA. Again, as a private agreement, the public only learns of the amount a state receives if it decides to release that information. Each year’s settlement payments are made to the states in April. You can check the newspapers at that time to see if the states you are interested in have announced their receipt of tobacco revenues.