Kentucky has received its latest payment exceeding $100 million from the Tobacco Master Settlement Agreement (MSA), Attorney General Russell Coleman announced on Friday. The 2025 installment brings the state’s total receipts to approximately $2.8 billion since the landmark 1998 agreement with major cigarette manufacturers.
“This money benefits all Kentuckians, but primarily our rural communities,” Coleman stated. “This money goes to a large fund that the Department of Agriculture, Commissioner, distributes through the grant process.”
The MSA, established in 1998, resolved lawsuits brought by 46 states against the four largest U.S. tobacco companies. The agreement mandated annual payments to the states in perpetuity, with the intent to compensate for healthcare costs associated with tobacco-related illnesses and to fund tobacco prevention programs.
In Kentucky, half of the settlement funds are allocated to agriculture diversification grants aimed at assisting farmers and communities affected by the declining tobacco industry. “This money is helping to mitigate the loss of some of this economic activity, and so $100 million is nothing to slough off,” Coleman stated. “This money is coming back to Kentucky to help our rural communities.”
The remaining half of the settlement funds is divided equally between the state’s Early Childhood Development Fund and the Kentucky Healthcare Improvement Fund, supporting initiatives in education and healthcare services.
