Counties Receive $11.9 Million in Tobacco Money

The Tobacco Settlement Permanent Trust Account Investment Advisory Committee approved $82.7 million for the year 2007 tobacco settlement distribution. According to the distribution report published by the Department of State Health Services (DSHS), 160 counties received about $11.9 million in reimbursements.
Under the terms of a historic settlement negotiated in the summer of 1998, tobacco companies agreed to create a $2.275 billion fund for the benefit of “all hospital districts, other local political subdivisions owning and maintaining public hospitals, and counties of the state of Texas responsible for providing indigent care to the general public.”
At the outset, $450 million of the nearly $2.3 billion was deposited into a “lump sum trust account” and distributed to local entities over a three-year period. The remainder, approximately $1.8 billion, was deposited into a “permanent trust account” with local entities receiving yearly disbursements each spring from investment earnings.
The Tobacco Settlement Permanent Trust Account Investment Advisory Committee has adopted a model of distribution for the tobacco settlement funds: The committee will approve an annual distribution equivalent to 4.5 percent of the five-year average value of the Permanent Trust Account. The objective is to produce more stable, inflation-adjusted distributions. The five-year averaging feature will ensure that the distribution amount does not radically change from one year to the next.
DSHS has certified the expenditure statements submitted by the eligible political subdivisions. According to the report identifying 2006 unreimbursed
health care expenditures, hospital districts reported $1,624,273,881.23; eligible cities reported $1,514,341.00; and counties reported $272,541,330.69. Total expenditures reported by all eligible political subdivisions for 2006 were $1,898,329,552.92.
For more information on the tobacco settlement, go to http://www.dshs.state.tx.us/tobaccosettlement/default.shtm.