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entitled 'Tobacco Settlement: States' Allocations of Fiscal Year 2004 
and Expected Fiscal Year 2005 Payments' which was released on March 22, 
2005. 

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Report to Congressional Requesters: 

March 2005: 

Tobacco Settlement: 

States' Allocations of Fiscal Year 2004 and Expected Fiscal Year 2005 
Payments: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-312]: 

GAO Highlights: 

Highlights of GAO-05-312, a report to congressional requesters: 

Why GAO Did This Study: 

In the 1990s, states sued major tobacco companies to obtain 
reimbursement for health impairments caused by the public's use of 
tobacco. In 1998, 46 states and four of the nation's largest tobacco 
companies signed a Master Settlement Agreement (MSA) that requires the 
tobacco companies to make annual payments to the states in perpetuity 
as reimbursement for past tobacco-related health care costs. The MSA 
commits the tobacco companies to pay the states approximately $206 
billion over the first 25 years. Some of the states have arranged to 
receive upfront proceeds based on the amounts that tobacco companies 
owe by issuing bonds backed by future payments. 

The Farm Security and Rural Investment Act of 2002 requires GAO to 
report annually on the amount of MSA payments that states receive 
through fiscal year 2006. This fourth report provides information on: 

* the payments the 46 states received in fiscal year 2004 and expect to 
receive in fiscal year 2005 and: 

* states' allocations of these funds to various program categories and 
changes from prior years. 

To conduct this study, GAO surveyed the 46 states. 

What GAO Found: 

The 46 states party to the MSA expect to receive about $15.1 billion in 
fiscal years 2004 and 2005. States reported they received about $9.7 
billion in fiscal year 2004 and expect to receive about $5.4 billion in 
fiscal year 2005. About 70 percent of these amounts will be MSA 
payments from the tobacco companies, and 30 percent will be proceeds 
from the sale of bonds (securitized proceeds) backed by payments 
tobacco companies will make in the future. In addition, only 1 state 
expects to receive securitized tobacco settlement funds in fiscal year 
2005, so the amount of securitized proceeds are expected to decline in 
fiscal year 2005 to about $64 million, down from the $4.4 billion 
states received in 2004. Over the 4 prior fiscal years, states also 
reported receiving a total of about $36.8 billion. These amounts 
include $25.7 billion in payments from tobacco companies and, for some 
states, $11.1 billion in securitized proceeds. 

The MSA allows states to use their tobacco settlement payments for any 
purpose. States reported that they used the largest portions of the 
fiscal year 2004 payments to address budget shortfalls (about 44 
percent) and to fund health-related programs (20 percent). Compared 
with fiscal year 2004, states in fiscal year 2005 expect to decrease 
allocations to address budget shortfalls (11 percent) and to increase 
allocations to both health-related programs (32 percent) and debt 
service on securitized funds (23 percent). 

Categories to Which States Allocated the Largest Portion of Tobacco 
Settlement Payments (Fiscal Year 2004 and Expected Fiscal Year 2005 
Allocations): 

[See PDF for image]

[End of figure]

www.gao.gov/cgi-bin/getrpt?GAO-05-312. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Robert A. Robinson, 202-
512-3841, robinsonr@gao.gov. 

[End of section]

Contents: 

Letter: 

Results in Brief: 

States Received about $9.7 Billion in MSA Payments and Securitized 
Proceeds in Fiscal Year 2004 and Expect to Receive about $5.4 Billion 
in Fiscal Year 2005: 

States Allocated the Largest Portion of their Funds to Cover Budget 
Shortfalls in Fiscal Year 2004 and Expect to Allocate the Largest 
Portion to Health-Related Programs in Fiscal Year 2005: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Survey Methodology and Categorization of States' Allocations: 

Categories of States' Allocations: 

Appendix II: Allocations of MSA Payments for 46 States: 

Appendix III: States' Allocations of Combined MSA Payments and 
Securitized Proceeds for Fiscal Years 2000 through 2005: 

Appendix IV: State-Specific Information on Amounts of Master Settlement 
Agreement Payments and Securitized Proceeds Received and Allocated: 

Appendix V: GAO Survey on States' Allocations of Fiscal Years 2004 and 
2005 Master Settlement Agreement Payments: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Staff Acknowledgments: 

Tables: 

Table 1: MSA Payments and Securitized Proceeds that States Reported 
Receiving in Fiscal Year 2004 and Expect to Receive in Fiscal Year 
2005: 

Table 2: Total MSA Payments and Securitized Proceeds Received since 
Fiscal Year 2000: 

Table 3: MSA Payments and Securitized Proceeds Allocated or Expected to 
Be Allocated to Various Categories, Fiscal Years 2004 and 2005: 

Table 4: Allocation of States' Combined MSA Payments and Securitized 
Proceeds, Fiscal Year 2004: 

Table 5: Expected Allocation of States' Combined MSA Payments and 
Securitized Proceeds, Fiscal Year 2005: 

Table 6: Alabama's MSA Payment Allocations: 

Table 7: Alaska's MSA Payment Allocations: 

Table 8: Arizona's MSA Payment Allocation: 

Table 9: Arkansas's MSA Payment Allocations: 

Table 10: California's MSA Payment Allocation: 

Table 11: Colorado's MSA Payment Allocations: 

Table 12: Connecticut's MSA Payment Allocation: 

Table 13: Delaware's MSA Payment Allocations: 

Table 14: Georgia's MSA Payment Allocations: 

Table 15: Hawaii's MSA Payment Allocations: 

Table 16: Idaho's MSA Payment Allocations: 

Table 17: Illinois's MSA Payment Allocations: 

Table 18: Indiana's MSA Payment Allocations: 

Table 19: Iowa's Allocations of MSA Payments and Securitized proceeds: 

Table 20: Kansas's MSA Payment Allocations: 

Table 21: Kentucky's MSA Payment Allocations: 

Table 22: Louisiana's MSA Payment Allocations: 

Table 23: Maine's MSA Payment Allocations: 

Table 24: Maryland's MSA Payment Allocations: 

Table 25: Massachusetts's MSA Payment Allocation: 

Table 26: Michigan's MSA Payment Allocations: 

Table 27: Missouri's MSA Payment Allocations: 

Table 28: Montana's MSA Payment Allocations: 

Table 29: Nebraska's MSA Payment Allocations: 

Table 30: Nevada's MSA Payment Allocations: 

Table 31: New Hampshire's MSA Payment Allocations: 

Table 32: New Jersey's Allocations of MSA Payments and Securitized 
proceeds: 

Table 33: New Mexico's MSA Payment Allocations: 

Table 34: New York's Allocation of MSA Payments and Securitized 
proceeds: 

Table 35: North Carolina's MSA Payment Allocations: 

Table 36: North Dakota's MSA Payment Allocations: 

Table 37: Ohio's MSA Payment Allocations: 

Table 38: Oklahoma's MSA Payment Allocations: 

Table 39: Oregon's Allocations of MSA Payments and Securitized 
proceeds: 

Table 40: Pennsylvania's MSA Payment Allocation: 

Table 41: Rhode Island's Allocations of MSA Payments and Securitized 
proceeds: 

Table 42: South Carolina's MSA Payment Allocation: 

Table 43: South Dakota's MSA Payment Allocations: 

Table 44: Tennessee's MSA Payment Allocation: 

Table 45: Utah's MSA Payment Allocations: 

Table 46: Vermont's MSA Payment Allocations: 

Table 47: Virginia's MSA Payment Allocations: 

Table 48: Washington's MSA Payment Allocations: 

Table 49: West Virginia's MSA Payment Allocations: 

Table 50: Wisconsin's MSA Payment Allocation: 

Table 51: Wyoming's MSA Payment Allocations: 

Figures: 

Figure 1: Securitized Proceeds Received by States since Fiscal Year 
2000: 

Figure 2: States’ Allocations of Combined MSA Payments and Securitized 
Proceeds for Fiscal Years 2000-01, 2002, 2003, and 2004 and Expected 
Allocations for Fiscal Year 2005: 

Letter March 21, 2005: 

Congressional Requesters: 

In the 1990s, states sued major tobacco companies to obtain 
reimbursement for health impairments caused by the public's use of 
tobacco. During 1997 and 1998, 4 states--Florida, Minnesota, 
Mississippi, and Texas--settled their lawsuits with the tobacco 
industry by negotiating independent agreements.[Footnote 1] In November 
1998, four of the nation's largest tobacco companies--Philip Morris, 
USA;[Footnote 2] R.J. Reynolds Tobacco Company; Brown & Williamson 
Tobacco Corporation; and Lorillard Tobacco Company--negotiated and 
signed an agreement with the attorneys general of the remaining 46 
states, the District of Columbia, and the five U.S. territories, 
thereby settling a number of lawsuits brought by these parties against 
the companies.[Footnote 3] This agreement is known as the Master 
Settlement Agreement (MSA). The MSA commits the tobacco companies to 
make annual payments to the 46 states in perpetuity as reimbursement 
for health care costs, such as Medicaid expenditures, related to 
tobacco use.[Footnote 4] These payments will total approximately $206 
billion over the first 25 years.[Footnote 5] Each state receives a 
share of the annual MSA payments based on a fixed percentage identified 
in the MSA. The MSA imposed no requirements on how states could spend 
their payments. 

The Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill) 
requires us to report annually on payments made by tobacco companies 
for fiscal years 2002 through 2006 and how states use these funds. In 
addition, 14 of the 46 states have received substantial advance 
proceeds based on the amounts that tobacco companies owe by issuing 
bonds backed by payments to be made in the future, a process known as 
securitization. States can securitize a portion of the expected payment 
stream to receive funds upfront rather than over time as MSA payments 
are made. The proceeds of these bonds have often been earmarked for 
meeting budget shortfalls. This report also includes information about 
states' receipt and allocation of these securitized proceeds.[Footnote 
6] This report is the fourth in a series of reports responding to the 
2002 Farm Bill requirement.[Footnote 7] In addition, we previously 
reported in June 2001 on states' receipt and use of MSA payments for 
fiscal years 2000 and 2001.[Footnote 8]

This report discusses (1) the amount of payments, including securitized 
proceeds, received by the 46 states party to the MSA during fiscal year 
2004, and the amount of payments these states expect to receive in 
fiscal year 2005, and (2) states' allocation of these funds to various 
program categories for fiscal year 2004 and expected allocations for 
fiscal year 2005. 

To address our objectives, we surveyed state budget offices, or their 
designees, in each of the 46 states to obtain MSA payment and 
allocation information for fiscal years 2004 and 2005.[Footnote 
9],[Footnote 10] We asked the states to categorize their MSA payment 
allocations for fiscal year 2004 and their expected allocations for 
fiscal year 2005 using 13 categories. In addition, we asked states if 
they securitized their payments and, if so, the amount of proceeds they 
received from securitization and the categories to which they allocated 
the securitized proceeds. We took a number of steps to assess the 
reliability of the states' data, including independently corroborating 
these data to the extent possible. We determined that these data were 
reliable enough for our purposes. In addition, we compared the data we 
received for fiscal years 2004 and 2005 with the payment and allocation 
information we collected from states for our earlier GAO 
reports.[Footnote 11] Appendix I contains more information on our scope 
and methodology and detailed definitions of the categories used in this 
report.[Footnote 12] Appendix II shows each state's percentage share of 
annual MSA payments. These payments are adjusted for several factors, 
most notably, the future sales of the tobacco industry. Each state's 
payments are adjusted annually on the basis of the participating 
manufacturer's cigarette sales and market share, as well as inflation. 

We conducted our work from July 2004 through February 2005 in 
accordance with generally accepted government auditing standards. 

Results in Brief: 

The 46 states party to the MSA expect to receive about $15.1 billion in 
MSA payments and securitized proceeds in fiscal years 2004 and 2005. 
These states reported receiving a total of about $9.7 billion in MSA 
payments and securitized proceeds in fiscal year 2004 and expect to 
receive about $5.4 billion in fiscal year 2005. About 70 percent of 
these amounts will be MSA payments from the tobacco companies, and 30 
percent will be securitized proceeds. The amounts of securitized 
proceeds that states received and expect to receive are declining, and 
only 1 state expects to receive securitized tobacco settlement funds in 
fiscal year 2005. Specifically, fiscal year 2005 securitized proceeds 
are expected to decline to about $64 million, down from the $4.4 
billion that states received in 2004 and the $6.5 billion they received 
in 2003. In the 4 prior years, fiscal years 2000 through 2003, states 
reported receiving about $36.8 billion--that is, about $25.7 billion in 
MSA payments from the tobacco companies and about $11.1 billion in 
securitized proceeds. 

States allocated the largest portions of their fiscal year 2004 tobacco 
settlement funds to address budget shortfalls (44 percent) and for 
health-related programs (20 percent), but they did not expect the same 
to hold true for fiscal year 2005. In fiscal year 2005, states expect 
to allocate the largest portions of their tobacco settlement funds to 
address health-related programs (32 percent) and debt service (23 
percent) on securitized funds. Compared with fiscal year 2004, states 
in fiscal year 2005 expect to decrease allocations to budget shortfalls 
and to increase allocations to health-related programs and to debt 
service on securitized funds. Also, while the percentage allocations to 
some program categories are expected to increase in fiscal year 2005, 
the dollars allocated may decrease. For example, the percentage 
allocation to health care is expected to increase, while the dollar 
amount is expected to decrease from about $2.3 billion in fiscal year 
2004 to about $1.9 billion in fiscal year 2005. 

States Received about $9.7 Billion in MSA Payments and Securitized 
Proceeds in Fiscal Year 2004 and Expect to Receive about $5.4 Billion 
in Fiscal Year 2005: 

The 46 states party to the MSA reported receiving a total of about $9.7 
billion in fiscal year 2004--that is, about $5.3 billion in MSA 
payments from the tobacco companies and, for 4 of the states, about 
$4.4 billion in securitized proceeds. For fiscal year 2005, the 46 
states are expecting to receive a total of about $5.4 billion--that is, 
about $5.3 billion in MSA payments and, for 1 of the states, about $0.1 
billion ($64 million) in securitized proceeds, about $4.3 billion less 
than in fiscal year 2004 and about $6.4 billion less than fiscal year 
2003. Over these 2 fiscal years, of the combined payments (about $15.1 
billion) that states will receive, about 70 percent ($10.6 billion) 
will be MSA payments from the tobacco companies and 30 percent ($4.5 
billion) will be securitized proceeds. In fiscal years 2000 through 
2003, states reported receiving a total of about $36.8 billion--that 
is, about $25.7 billion in MSA payments from the tobacco companies and 
about $11.1 billion in securitized proceeds. Table 1 shows the amount 
of MSA payments and securitized proceeds each of the 46 states reported 
receiving in fiscal year 2004 and the amount each state expects to 
receive in fiscal year 2005. 

Table 1: MSA Payments and Securitized Proceeds that States Reported 
Receiving in Fiscal Year 2004 and Expect to Receive in Fiscal Year 
2005: 

State: Alabama; 
Fiscal year 2004: MSA payments received: $101,871,680; 
Fiscal year 2004: Total: $101,871,680; 
Fiscal year 2005: MSA payments expected to be received: $96,000,000; 
Fiscal year 2005: Total: $96,000,000. 

State: Alaska; 
Fiscal year 2004: MSA payments received: $21,438,845; 
Fiscal year 2004: Total: $21,438,845; 
Fiscal year 2005: MSA payments expected to be received: $23,347,500; 
Fiscal year 2005: Total: $23,347,500. 

State: Arizona; 
Fiscal year 2004: MSA payments received: $92,648,165; 
Fiscal year 2004: Total: $92,648,165; 
Fiscal year 2005: MSA payments expected to be received: $90,304,100; 
Fiscal year 2005: Total: $90,304,100. 

State: Arkansas; 
Fiscal year 2004: MSA payments received: $52,688,976; 
Fiscal year 2004: Total: $52,688,976; 
Fiscal year 2005: MSA payments expected to be received: $50,000,000; 
Fiscal year 2005: Total: $50,000,000. 

State: California; 
Fiscal year 2004: MSA payments received: $400,746,161; 
Fiscal year 2004: Total: $400,746,161; 
Fiscal year 2005: MSA payments expected to be received: $404,500,000; 
Fiscal year 2005: Total: $404,500,000. 

State: Colorado; 
Fiscal year 2004: MSA payments received: $87,037,529; 
Fiscal year 2004: Total: $87,037,529; 
Fiscal year 2005: MSA payments expected to be received: $88,878,470; 
Fiscal year 2005: Total: $88,878,470. 

State: Connecticut; 
Fiscal year 2004: MSA payments received: $116,578,313; 
Fiscal year 2004: Total: $116,578,313; 
Fiscal year 2005: MSA payments expected to be received: $109,000,000; 
Fiscal year 2005: Total: $109,000,000. 

State: Delaware; 
Fiscal year 2004: MSA payments received: $24,832,878; 
Fiscal year 2004: Total: $24,832,878; 
Fiscal year 2005: MSA payments expected to be received: $26,100,000; 
Fiscal year 2005: Total: $26,100,000. 

State: Georgia; 
Fiscal year 2004: MSA payments received: $156,330,702; 
Fiscal year 2004: Total: $156,330,702; 
Fiscal year 2005: MSA payments expected to be received: $146,123,673; 
Fiscal year 2005: Total: $146,123,673. 

State: Hawaii; 
Fiscal year 2004: MSA payments received: $38,837,269; 
Fiscal year 2004: Total: $38,837,269; 
Fiscal year 2005: MSA payments expected to be received: $42,574,552; 
Fiscal year 2005: Total: $42,574,552. 

State: Idaho; 
Fiscal year 2004: MSA payments received: $22,818,949; 
Fiscal year 2004: Total: $22,818,949; 
Fiscal year 2005: MSA payments expected to be received: $23,830,716; 
Fiscal year 2005: Total: $23,830,716. 

State: Illinois; 
Fiscal year 2004: MSA payments received: $292,256,066; 
Fiscal year 2004: Total: $292,256,066; 
Fiscal year 2005: MSA payments expected to be received: $270,989,300; 
Fiscal year 2005: Total: $270,989,300. 

State: Indiana; 
Fiscal year 2004: MSA payments received: $126,800,000; 
Fiscal year 2004: Total: $126,800,000; 
Fiscal year 2005: MSA payments expected to be received: $129,300,000; 
Fiscal year 2005: Total: $129,300,000. 

State: Iowa; 
Fiscal year 2004: MSA payments received: $54,609,359; 
Fiscal year 2004: Securitized proceeds received: $63,512,236; 
Fiscal year 2004: Total: $118,121,595; 
Fiscal year 2005: MSA payments expected to be received: $55,137,861; 
Fiscal year 2005: Securitized proceeds expected to be received: 
$63,792,236; 
Fiscal year 2005: Total: $118,930,097. 

State: Kansas; 
Fiscal year 2004: MSA payments received: $52,349,060; 
Fiscal year 2004: Total: $52,349,060; 
Fiscal year 2005: MSA payments expected to be received: $52,000,000; 
Fiscal year 2005: Total: $52,000,000. 

State: Kentucky; 
Fiscal year 2004: MSA payments received: $109,482,959; 
Fiscal year 2004: Total: $109,482,959; 
Fiscal year 2005: MSA payments expected to be received: $108,800,000; 
Fiscal year 2005: Total: $108,800,000. 

State: Louisiana; 
Fiscal year 2004: MSA payments received: $141,621,328; 
Fiscal year 2004: Total: $141,621,328; 
Fiscal year 2005: MSA payments expected to be received: $145,362,442; 
Fiscal year 2005: Total: $145,362,442. 

State: Maine; 
Fiscal year 2004: MSA payments received: $48,952,964; 
Fiscal year 2004: Total: $48,952,964; 
Fiscal year 2005: MSA payments expected to be received: $48,772,127; 
Fiscal year 2005: Total: $48,772,127. 

State: Maryland; 
Fiscal year 2004: MSA payments received: $149,942,000; 
Fiscal year 2004: Total: $149,942,000; 
Fiscal year 2005: MSA payments expected to be received: $142,607,000; 
Fiscal year 2005: Total: $142,607,000. 

State: Massachusetts; 
Fiscal year 2004: MSA payments received: $253,621,276; 
Fiscal year 2004: Total: $253,621,276; 
Fiscal year 2005: MSA payments expected to be received: $253,600,000; 
Fiscal year 2005: Total: $253,600,000. 

State: Michigan; 
Fiscal year 2004: MSA payments received: $270,540,221; 
Fiscal year 2004: Total: $270,540,221; 
Fiscal year 2005: MSA payments expected to be received: $285,700,000; 
Fiscal year 2005: Total: $285,700,000. 

State: Missouri; 
Fiscal year 2004: MSA payments received: $142,829,966; 
Fiscal year 2004: Total: $142,829,966; 
Fiscal year 2005: MSA payments expected to be received: $144,000,000; 
Fiscal year 2005: Total: $144,000,000. 

State: Montana; 
Fiscal year 2004: MSA payments received: $26,672,073; 
Fiscal year 2004: Total: $26,672,073; 
Fiscal year 2005: MSA payments expected to be received: $26,223,000; 
Fiscal year 2005: Total: $26,223,000. 

State: Nebraska; 
Fiscal year 2004: MSA payments received: $37,858,162; 
Fiscal year 2004: Total: $37,858,162; 
Fiscal year 2005: MSA payments expected to be received: $35,600,000; 
Fiscal year 2005: Total: $35,600,000. 

State: Nevada; 
Fiscal year 2004: MSA payments received: $38,299,907; 
Fiscal year 2004: Total: $38,299,907; 
Fiscal year 2005: MSA payments expected to be received: $38,666,164; 
Fiscal year 2005: Total: $38,666,164. 

State: New Hampshire; 
Fiscal year 2004: MSA payments received: $41,800,000; 
Fiscal year 2004: Total: $41,800,000; 
Fiscal year 2005: MSA payments expected to be received: $39,600,000; 
Fiscal year 2005: Total: $39,600,000. 

State: New Jersey; 
Fiscal year 2004: MSA payments received: $242,800,000; 
Fiscal year 2004: Total: $242,800,000; 
Fiscal year 2005: MSA payments expected to be received: $245,100,000; 
Fiscal year 2005: Total: $245,100,000. 

State: New Mexico; 
Fiscal year 2004: MSA payments received: $37,449,345; 
Fiscal year 2004: Total: $37,449,345; 
Fiscal year 2005: MSA payments expected to be received: $34,779,246; 
Fiscal year 2005: Total: $34,779,246. 

State: New York; 
Fiscal year 2004: MSA payments received: $349,494,266; 
Fiscal year 2004: Securitized proceeds received: $4,200,000,000; 
Fiscal year 2004: Total: $4,549,494,266; 
Fiscal year 2005: MSA payments expected to be received: $406,007,613; 
Fiscal year 2005: Total: $406,007,613. 

State: North Carolina; 
Fiscal year 2004: MSA payments received: $150,507,204; 
Fiscal year 2004: Total: $150,507,204; 
Fiscal year 2005: MSA payments expected to be received: $163,353,241; 
Fiscal year 2005: Total: $163,353,241. 

State: North Dakota; 
Fiscal year 2004: MSA payments received: $23,289,073; 
Fiscal year 2004: Total: $23,289,073; 
Fiscal year 2005: MSA payments expected to be received: $22,972,067; 
Fiscal year 2005: Total: $22,972,067. 

State: Ohio; 
Fiscal year 2004: MSA payments received: $320,531,457; 
Fiscal year 2004: Total: $320,531,457; 
Fiscal year 2005: MSA payments expected to be received: $290,886,750; 
Fiscal year 2005: Total: $290,886,750. 

State: Oklahoma; 
Fiscal year 2004: MSA payments received: $65,062,578; 
Fiscal year 2004: Total: $65,062,578; 
Fiscal year 2005: MSA payments expected to be received: $49,783,729; 
Fiscal year 2005: Total: $49,783,729. 

State: Oregon; 
Fiscal year 2004: MSA payments received: $72,065,376; 
Fiscal year 2004: Securitized proceeds received: $109,565,000; 
Fiscal year 2004: Total: $181,630,376; 
Fiscal year 2005: MSA payments expected to be received: $73,555,259; 
Fiscal year 2005: Total: $73,555,259. 

State: Pennsylvania; 
Fiscal year 2004: MSA payments received: $370,856,755; 
Fiscal year 2004: Total: $370,856,755; 
Fiscal year 2005: MSA payments expected to be received: $357,566,328; 
Fiscal year 2005: Total: $357,566,328. 

State: Rhode Island; 
Fiscal year 2004: MSA payments received: $45,142,523; 
Fiscal year 2004: Securitized proceeds received: $1,621,487; 
Fiscal year 2004: Total: $46,764,010; 
Fiscal year 2005: MSA payments expected to be received: $47,381,000; 
Fiscal year 2005: Total: $47,381,000. 

State: South Carolina; 
Fiscal year 2004: MSA payments received: $73,124,607; 
Fiscal year 2004: Total: $73,124,607; 
Fiscal year 2005: MSA payments expected to be received: $75,582,954; 
Fiscal year 2005: Total: $75,582,954. 

State: South Dakota; 
Fiscal year 2004: MSA payments received: $21,911,498; 
Fiscal year 2004: Total: $21,911,498; 
Fiscal year 2005: MSA payments expected to be received: $23,063,730; 
Fiscal year 2005: Total: $23,063,730. 

State: Tennessee; 
Fiscal year 2004: MSA payments received: $153,272,096; 
Fiscal year 2004: Total: $153,272,096; 
Fiscal year 2005: MSA payments expected to be received: $147,800,000; 
Fiscal year 2005: Total: $147,800,000. 

State: Utah; 
Fiscal year 2004: MSA payments received: $27,936,000; 
Fiscal year 2004: Total: $27,936,000; 
Fiscal year 2005: MSA payments expected to be received: $26,951,100; 
Fiscal year 2005: Total: $26,951,100. 

State: Vermont; 
Fiscal year 2004: MSA payments received: $25,819,716; 
Fiscal year 2004: Total: $25,819,716; 
Fiscal year 2005: MSA payments expected to be received: $24,700,000; 
Fiscal year 2005: Total: $24,700,000. 

State: Virginia; 
Fiscal year 2004: MSA payments received: $128,396,522; 
Fiscal year 2004: Total: $128,396,522; 
Fiscal year 2005: MSA payments expected to be received: $123,256,595; 
Fiscal year 2005: Total: $123,256,595. 

State: Washington; 
Fiscal year 2004: MSA payments received: $127,635,700; 
Fiscal year 2004: Total: $127,635,700; 
Fiscal year 2005: MSA payments expected to be received: $128,000,000; 
Fiscal year 2005: Total: $128,000,000. 

State: West Virginia; 
Fiscal year 2004: MSA payments received: $55,663,874; 
Fiscal year 2004: Total: $55,663,874; 
Fiscal year 2005: MSA payments expected to be received: $50,800,000; 
Fiscal year 2005: Total: $50,800,000. 

State: Wisconsin; 
Fiscal year 2004: MSA payments received: $130,110,401; 
Fiscal year 2004: Total: $130,110,401; 
Fiscal year 2005: MSA payments expected to be received: $137,126,872; 
Fiscal year 2005: Total: $137,126,872. 

State: Wyoming; 
Fiscal year 2004: MSA payments received: $15,594,424; 
Fiscal year 2004: Total: $15,594,424; 
Fiscal year 2005: MSA payments expected to be received: $15,594,424; 
Fiscal year 2005: Total: $15,594,424. 

Total; 
Fiscal year 2004: MSA payments received: $5,340,128,223; 
Fiscal year 2004: Securitized proceeds received: $4,374,698,723; 
Fiscal year 2004: Total: $9,714,826,946; 
Fiscal year 2005: MSA payments expected to be received: $5,321,277,813; 
Fiscal year 2005: Securitized proceeds expected to be received: 
$63,792,236; 
Fiscal year 2005: Total: $5,385,070,049. 

Sources: State budget offices or their designees. 

Note: The amounts of MSA payments received and expected by California 
and New York do not include MSA payments made to the counties and 
cities in those states. 

[End of table]

Since fiscal year 2000, states have received a total of about $47 
billion in MSA payments and securitized proceeds; 
specifically, about $31 billion from MSA payments and $16 billion in 
securitized proceeds. (See table 2.)

Table 2: Total MSA Payments and Securitized Proceeds Received since 
Fiscal Year 2000: 

Fiscal year 2000-01; 
MSA payments: $13,200,000,000; 
Securitized proceeds: $928,900,000; 
Total: $14,128,900,000. 

Fiscal year 2002; 
MSA payments: $6,238,393,496; 
Securitized proceeds: $3,740,376,465; 
Total: $9,978,769,961. 

Fiscal year 2003; 
MSA payments: $6,306,329,459; 
Securitized proceeds: $6,482,764,469; 
Total: $12,789,093,928. 

Fiscal year 2004; 
MSA payments: $5,340,128,223; 
Securitized proceeds: $4,374,698,723; 
Total: $9,714,826,946. 

Fiscal year: Total; 
MSA payments: $31,084,851,178; 
Securitized proceeds: $15,526,739,657; 
Total: $46,611,590,835. 

[End of table]

Sources: [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-851], 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-407], and 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-518]; state budget 
offices or their designees (data); and GAO (analysis). 

Fourteen states have received a total of about $15.5 billion in 
securitized proceeds from the sale of bonds since fiscal year 2000. 
Five of these states--Alabama, Alaska, Iowa, Oregon, and Rhode Island-
-have received securitized proceeds in more than 1 year. (See fig. 1.)

Figure 1: Securitized Proceeds Received by States since Fiscal Year 
2000: 

[See PDF for image]

[End of figure]

States Allocated the Largest Portion of their Funds to Cover Budget 
Shortfalls in Fiscal Year 2004 and Expect to Allocate the Largest 
Portion to Health-Related Programs in Fiscal Year 2005: 

The 46 states reported that in fiscal year 2004, they allocated the 
largest portion of their combined MSA payments and securitized proceeds 
(44 percent) to cover budget shortfalls, and the next largest portion 
(20 percent) for health-related programs. In fiscal year 2005, the 
states expected to decrease allocations to budget shortfalls (to about 
11 percent) and allocate the largest portion of their funds (32 
percent) for health-related programs, and the next largest portion (23 
percent) for debt servicing of securitized proceeds. While the 
percentage allocations to some program categories are expected to 
increase in fiscal year 2005, the dollars allocated may decrease. For 
example, the percentage allocation to health care is expected to 
increase, while the dollar amount is expected to decrease from about 
$2.3 billion in fiscal year 2004 to about $1.9 billion in fiscal year 
2005. Examples of the health-related programs included Medicaid, the 
Children's Health Insurance Program, and cancer treatment and 
prevention. Figure 2 provides more detail on states' allocations of 
their combined MSA payments and securitized proceeds for fiscal years 
2000-01, 2002, 2003, and 2004 and expected allocations for fiscal year 
2005. 

In addition, between fiscal years 2004 and 2005, the portion of funds 
that all states allocate to budget shortfalls is expected to decrease 
substantially from 44 percent to 11 percent, as shown in figure 2. Our 
analysis shows that changes in the allocations of securitized proceeds 
by New York and New Jersey were the primary cause of that decrease. 
Together, the securitized funds allocated by these two states (about 
$4.7 billion) accounted for about 41 percent of the total MSA funds 
($11.4 billion) that all states allocated in fiscal year 2004, but 
these amounts declined in fiscal year 2005. Specifically, in fiscal 
year 2004, New York allocated $3.8 billion of their securitized funds 
to budget shortfalls while New Jersey allocated $873 million. Together, 
these allocations accounted for about 92 percent of all funds allocated 
to budget shortfalls in fiscal year 2004. In fiscal year 2005, however, 
New York expected to allocate only $400 million[Footnote 13] of their 
securitized funds to budget shortfalls while New Jersey did not expect 
to allocate any funds to budget shortfalls. 

Figure 2: States' Allocations of Combined MSA Payments and Securitized 
Proceeds for Fiscal Years 2000-01, 2002, 2003, and 2004 and Expected 
Allocations for Fiscal Year 2005: 

[See PDF for image]

Note: Percentages may not add up to 100 because of rounding. 

[A] We did not obtain data for budget shortfalls and debt service on 
securitized funds for fiscal years 2000-01. 

[End of figure]

As table 3 shows, allocations of MSA payments differed somewhat from 
allocations of securitized proceeds. In fiscal year 2004, the 
categories to which the 46 states allocated the greatest portion of 
their MSA payments were health-related programs (nearly 40 percent) and 
debt service (nearly 18 percent). In contrast, the 5 states that 
allocated securitized proceeds in fiscal year 2004--Iowa, New Jersey, 
New York, Oregon, and Rhode Island--allocated the greatest portion of 
the securitized proceeds to budget shortfalls (nearly 80 percent). In 
fiscal year 2005, the categories to which the 46 states expected to 
allocate the greatest portion of their MSA payments were health-related 
programs (about 33 percent) and debt service (about 25 percent). The 
only states that expected to allocate securitized proceeds for fiscal 
year 2005--Iowa and New York--planned to allocate about 86 percent of 
these proceeds to budget shortfalls. 

Table 3: MSA Payments and Securitized Proceeds Allocated or Expected to 
Be Allocated to Various Categories, Fiscal Years 2004 and 2005: 

Category: Budget shortfalls; 
Fiscal Year 2004: MSA payments allocated: 6.9%; 
Fiscal Year 2004: Securitized proceeds allocated: 79.8%; 
Fiscal Year 2004: Total allocated: 44.3%; 
Fiscal Year 2005: MSA payments expected to be allocated: 5.2%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 86.2%; 
Fiscal Year 2005: Total expected to be allocated: 11.4%. 

Category: Debt service on securitized funds; 
Fiscal Year 2004: MSA payments allocated: 17.9%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.0%; 
Fiscal Year 2004: Total allocated: 8.7%; 
Fiscal Year 2005: MSA payments expected to be allocated: 25.4%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.0%; 
Fiscal Year 2005: Total expected to be allocated: 23.4%. 

Category: Economic development for tobacco regions; 
Fiscal Year 2004: MSA payments allocated: 5.2%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.0%; 
Fiscal Year 2004: Total allocated: 2.5%; 
Fiscal Year 2005: MSA payments expected to be allocated: 5.1%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.0%; 
Fiscal Year 2005: Total expected to be allocated: 4.7%. 

Category: Education; 
Fiscal Year 2004: MSA payments allocated: 5.0%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.0%; 
Fiscal Year 2004: Total allocated: 2.4%; 
Fiscal Year 2005: MSA payments expected to be allocated: 5.1%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.5%; 
Fiscal Year 2005: Total expected to be allocated: 4.8%. 

Category: General purposes; 
Fiscal Year 2004: MSA payments allocated: 13.3%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.1%; 
Fiscal Year 2004: Total allocated: 6.5%; 
Fiscal Year 2005: MSA payments expected to be allocated: 12.0%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.5%; 
Fiscal Year 2005: Total expected to be allocated: 11.1%. 

Category: Health; 
Fiscal Year 2004: MSA payments allocated: 39.6%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.9%; 
Fiscal Year 2004: Total allocated: 19.8%; 
Fiscal Year 2005: MSA payments expected to be allocated: 33.3%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 11.7%; 
Fiscal Year 2005: Total expected to be allocated: 31.6%. 

Category: Infrastructure; 
Fiscal Year 2004: MSA payments allocated: 0.7%; 
Fiscal Year 2004: Securitized proceeds allocated: 12.3%; 
Fiscal Year 2004: Total allocated: 6.6%; 
Fiscal Year 2005: MSA payments expected to be allocated: 3.0%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.0%; 
Fiscal Year 2005: Total expected to be allocated: 2.7%. 

Category: Payments to tobacco growers; 
Fiscal Year 2004: MSA payments allocated: 0.4%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.0%; 
Fiscal Year 2004: Total allocated: 0.2%; 
Fiscal Year 2005: MSA payments expected to be allocated: 0.5%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.0%; 
Fiscal Year 2005: Total expected to be allocated: 0.4%. 

Category: Reserves/Rainy day funds; 
Fiscal Year 2004: MSA payments allocated: 0.3%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.0%; 
Fiscal Year 2004: Total allocated: 0.1%; 
Fiscal Year 2005: MSA payments expected to be allocated: 0.3%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.0%; 
Fiscal Year 2005: Total expected to be allocated: 0.3%. 

Category: Social services; 
Fiscal Year 2004: MSA payments allocated: 2.6%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.0%; 
Fiscal Year 2004: Total allocated: 1.2%; 
Fiscal Year 2005: MSA payments expected to be allocated: 2.5%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.0%; 
Fiscal Year 2005: Total expected to be allocated: 2.3%. 

Category: Tax reductions; 
Fiscal Year 2004: MSA payments allocated: 1.0%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.0%; 
Fiscal Year 2004: Total allocated: 0.5%; 
Fiscal Year 2005: MSA payments expected to be allocated: 0.0%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.0%; 
Fiscal Year 2005: Total expected to be allocated: 0.0%. 

Category: Tobacco control; 
Fiscal Year 2004: MSA payments allocated: 3.9%; 
Fiscal Year 2004: Securitized proceeds allocated: 0.1%; 
Fiscal Year 2004: Total allocated: 2.0%; 
Fiscal Year 2005: MSA payments expected to be allocated: 4.8%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 1.1%; 
Fiscal Year 2005: Total expected to be allocated: 4.5%. 

Category: Unallocated; 
Fiscal Year 2004: MSA payments allocated: 3.1%; 
Fiscal Year 2004: Securitized proceeds allocated: 6.8%; 
Fiscal Year 2004: Total allocated: 5.0%; 
Fiscal Year 2005: MSA payments expected to be allocated: 2.9%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 0.0%; 
Fiscal Year 2005: Total expected to be allocated: 2.7%. 

Category: Total[A]; 
Fiscal Year 2004: MSA payments allocated: 99.9%; 
Fiscal Year 2004: Securitized proceeds allocated: 100.0%; 
Fiscal Year 2004: Total allocated: 99.8%; 
Fiscal Year 2005: MSA payments expected to be allocated: 100.1%; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 
100.0%; 
Fiscal Year 2005: Total expected to be allocated: 99.9%. 

Category: Total amount allocated[B]; 
Fiscal Year 2004: MSA payments allocated: $5,576,588,405; 
Fiscal Year 2004: Securitized proceeds allocated: $5,855,998,723; 
Fiscal Year 2004: Total allocated: $11,432,587,128; 
Fiscal Year 2005: MSA payments expected to be allocated: 
$5,534,150,369; 
Fiscal Year 2005: Securitized proceeds expected to be allocated: 
$463,792,236; 
Fiscal Year 2005: Total expected to be allocated: $5,997,942,605. 

Sources: State budget offices or their designees (data); GAO 
(analysis). 

[A] May not equal 100 percent due to rounding. 

[B] Some states received MSA payments and/or securitized proceeds in 
one fiscal year and allocated them the next fiscal year. The amount of 
funds allocated may not equal the amount of funds received because of 
carry-over funds and interest earned. 

[End of table]

Tables 4 and 5 show the percentage of the combined MSA payments and 
securitized proceeds that individual states allocated, and expect to 
allocate, to various categories in fiscal years 2004 and 2005, 
respectively. 

Table 4: Allocation of States' Combined MSA Payments and Securitized 
Proceeds, Fiscal Year 2004: 

State: Alabama; 
Budget shortfalls: 0.00%; 
Debt on securitized proceeds: 12.8%; 
Economic development for tobacco regions: 0.0%; 
Education: 11.5%; 
General purposes: 7.4%; 
Health: 43.1%; 
Infrastructure: 0.0%; 
Payments to tobacco growers: 0.0%; 
Reserves/Rainy day funds: 0.0%; 
Social services: 24.7%; 
Tax reductions: 0.0%; 
Tobacco control: 0.5%; 
Unallocated: 0.0%. 

State: Alaska; 
Debt on securitized proceeds: 80%; 
Health: 4%; 
Infrastructure: 0%; 
Tobacco control: 16%. 

State: Arizona; 
Health: 100%. 

State: Arkansas; 
Debt on securitized proceeds: 9.5%; 
Education: 4.7%; 
Health: 84.3%; 
Tobacco control: 1.5%. 

State: California; 
Debt on securitized proceeds: 100%. 

State: Colorado; 
Education: 22.8%; 
Health: 65.5%; 
Social services: 3.8%; 
Tobacco control: 7.9%. 

State: Connecticut; 
General purposes: 100%. 

State: Delaware; 
Education: 5.2%; 
General purposes: 0.7%; 
Health: 72.2%; 
Social services: 1.7%; 
Tobacco control: 20.3%. 

State: Georgia; 
Economic development for tobacco regions: 37.8%; 
Health: 51%; 
Social services: 4.1%; 
Tobacco control: 7.2%. 

State: Hawaii; 
General purposes: 7.2%; 
Health: 32.5%; 
Infrastructure: 26%; 
Reserves/Rainy day funds: 22.7%; 
Tobacco control: 11.6%. 

State: Idaho; 
Health: 3.7%; 
Social services: 1.2%; 
Tobacco control: 5.8%; 
Unallocated: 89.3%. 

State: Illinois; 
Education: 5.2%; 
General purposes: 13.1%; 
Health: 59.6%; 
Infrastructure: 1%; 
Social services: 0.3%; 
Tax reductions: 18.3%; 
Tobacco control: 2.5%. 

State: Indiana; 
Economic development for tobacco regions: 27.2%; 
Health: 51.2%; 
Infrastructure: 0.9%; 
Social services: 14.3%; 
Tobacco control: 6.4%. 

State: Iowa; 
Debt on securitized proceeds: 36.1%; 
Education: 1.8%; 
General purposes: 1.8%; 
Health: 56%; 
Tobacco control: 4.3%. 

State: Kansas; 
Education: 15.9%; 
General purposes: 20.5%; 
Health: 3.3%; 
Social services: 60.3%. 

State: Kentucky; 
Economic development for tobacco regions: 39.7%; 
Education: 5.4%; 
General purposes: 0.3%; 
Health: 39.8%; 
Infrastructure: 10.2%; 
Tobacco control: 4.5%. 

State: Louisiana; 
Debt on securitized proceeds: 60%; 
General purposes: 0.2%; 
Health: 8.4%; 
Social services: 1.1%; 
Tobacco control: 0.4%; 
Unallocated: 30%. 

State: Maine; 
Budget shortfalls: 11.7%; 
Education: 17.9%; 
General purposes: 0.1%; 
Health: 34.3%; 
Social services: 10.2%; 
Tobacco control: 25.7%. 

State: Maryland; 
Education: 1.4%; 
General purposes: 13.9%; 
Health: 71.1%; 
Payments to tobacco growers: 2.4%; 
Tobacco control: 6.4%; 
Unallocated: 4.8%. 

State: Massachusetts; 
General purposes: 100%. 

State: Michigan; 
Budget shortfalls: 22.4%; 
Education: 36.7%; 
General purposes: 0.1%; 
Health: 37.6%; 
Unallocated: 3.2%. 

State: Missouri; 
Budget shortfalls: 48.7%; 
General purposes: 3%; 
Health: 48%; 
Tobacco control: 0.3%. 

State: Montana; 
General purposes: 11%; 
Health: 68.4%; 
Social services: 8.1%; 
Tobacco control: 9.4%; 
Unallocated: 3.1%. 

State: Nebraska; 
General purposes: 0.2%; 
Health: 55.5%; 
Social services: 7.4%; 
Unallocated: 36.9%. 

State: Nevada; 
Education: 50.8%; 
General purposes: 0.4%; 
Health: 24.6%; 
Social services: 15.5%; 
Tobacco control: 8.7%. 

State: New Hampshire; 
Education: 95.7%; 
General purposes: 4.3%. 

State: New Jersey; 
Budget shortfalls: 50.7%; 
Debt on securitized proceeds: 7%; 
Health: 7.1%; 
Infrastructure: 35.3%. 

State: New Mexico; 
Education: 2.1%; 
Health: 97.9%. 

State: New York; 
Budget shortfalls: 83.5%; 
Health: 7.1%; 
Tobacco control: 0.7%; 
Unallocated: 8.8%. 

State: North Carolina; 
Economic development for tobacco regions: 50%; 
General purposes: 41.6%; 
Health: 1.3%; 
Tobacco control: 7.1%. 

State: North Dakota; 
Education: 45%; 
Health: 2.1%; 
Infrastructure: 45%; 
Tobacco control: 7.9%. 

State: Ohio; 
Budget shortfalls: 72.9%; 
Economic development for tobacco regions: 4.7%; 
Education: 2.3%; 
General purposes: 0.2%; 
Health: 11.6%; 
Infrastructure: 1.6%; 
Social services: 1.2%; 
Tobacco control: 5.4%. 

State: Oklahoma; 
General purposes: 2.2%; 
Health: 47.6%; 
Social services: 24%; 
Tobacco control: 26.2%. 

State: Oregon; 
Debt on securitized proceeds: 4.2%; 
Health: 8%; 
Infrastructure: 60.3%; 
Unallocated: 27.4%. 

State: Pennsylvania; 
Health: 100%. 

State: Rhode Island; 
Debt on securitized proceeds: 95.6%; 
General purposes: 4.4%. 

State: South Carolina; 
Debt on securitized proceeds: 100%. 

State: South Dakota; 
Debt on securitized proceeds: 60.7%; 
Education: 39.3%. 

State: Tennessee; 
General purposes: 100%. 

State: Utah; 
Budget shortfalls: 28.4%; 
General purposes: 0.3%; 
Health: 37.6%; 
Reserves/Rainy day funds: 16.2%; 
Social services: 5.8%; 
Tobacco control: 11.7%. 

State: Vermont; 
General purposes: 1.6%; 
Health: 70%; 
Social services: 11.7%; 
Tobacco control: 16.7%. 

State: Virginia; 
Economic development for tobacco regions: 34.9%; 
General purposes: 40%; 
Payments to tobacco growers: 15.1%; 
Tobacco control: 10%. 

State: Washington; 
Debt on securitized proceeds: 25.7%; 
Health: 62.3%; 
Tobacco control: 12.1%. 

State: West Virginia; 
Health: 39.5%; 
Tobacco control: 10.5%; 
Unallocated: 50%. 

State: Wisconsin; 
Debt on securitized proceeds: 100%. 

State: Wyoming; 
Health: 46.8%; 
Social services: 26%; 
Tobacco control: 27.1%.

Total; 
Budget shortfalls: 44.30%; 
Debt on securitized proceeds: 8.70%; 
Economic development for tobacco regions: 2.50%; 
Education: 2.40%; 
General purposes: 6.50%; 
Health: 19.80%; 
Infrastructure: 6.60%; 
Payments to tobacco growers: 0.20%; 
Reserves/Rainy day funds: 0.10%; 
Social services: 1.20%; 
Tax reductions: 5.00%; 
Tobacco control: 2.00%; 
Unallocated: 5.00%.

Sources: State budget offices and their designees (data); GAO 
(analysis). 

Note: Percentages may not add up to 100 because of rounding. Appendix 
IV shows the dollar amount each state allocated to the various 
categories. 

[End of table]

Table 5: Expected Allocation of States' Combined MSA Payments and 
Securitized Proceeds, Fiscal Year 2005: 

State: Alabama; 
Budget shortfalls: 0.00%; 
Debt on securitized funds: 13.50%; 
Economic development for tobacco regions: 0.00%; 
Education: 11.40%; 
General purposes: 7.30%; 
Health: 42.70%; 
Infrastructure: 0.00%; 
Payments to tobacco growers: 0.00%; 
Reserves/Rainy day funds: 0.00%; 
Social services: 24.50%; 
Tax reductions: 0.00%; 
Tobacco control: 0.50%.00%. 

State: Alaska; 
Debt on securitized funds: 80%; 
Health: 4.8%; 
Tobacco control: 15.2%. 

State: Arizona; 
Health: 100%. 

State: Arkansas; 
Debt on securitized funds: 10%; 
Education: 4.7%; 
Health: 83.7%; 
Tobacco control: 1.6%. 

State: California ; 
Debt on securitized funds: 100%. 

State: Colorado; 
Budget shortfalls: 29.2%; 
Education: 18.5%; 
Health: 40.4%; 
Infrastructure: 2.1%; 
Social services: 4.9%; 
Tobacco control: 4.9%. 

State: Connecticut; 
General purposes: 100%. 

State: Delaware; 
Education: 6.3%; 
General purposes: 0.7%; 
Health: 71.9%; 
Social services: 1.6%; 
Tobacco control: 19.4%. 

State: Georgia; 
Economic development for tobacco regions: 30.1%; 
Health: 57.1%; 
Social services: 4.6%; 
Tobacco control: 8.2%. 

State: Hawaii; 
General purposes: 7.2%; 
Health: 32.5%; 
Infrastructure: 26%; 
Reserves/Rainy day funds: 22.7%; 
Tobacco control: 11.6%. 

State: Idaho; 
Health: 2.1%; 
Social services: 1.1%; 
Tobacco control: 4.9%; 
Unallocated: 91.9%. 

State: Illinois; 
Education: 4.6%; 
General purposes: 8.7%; 
Health: 80.3%; 
Infrastructure: 1.7%; 
Social services: 0.4%; 
Tobacco control: 4.3%. 

State: Indiana; 
Economic development for tobacco regions: 26.9%; 
Health: 51.9%; 
Infrastructure: 0.8%; 
Social services: 14.1%; 
Tobacco control: 6.3%. 

State: Iowa; 
Debt on securitized funds: 36.2%; 
Education: 1.8%; 
General purposes: 1.9%; 
Health: 55.9%; 
Tobacco control: 4.3%. 

State: Kansas; 
Education: 14.9%; 
General purposes: 8.9%; 
Health: 3.1%; 
Social services: 73.1%. 

State: Kentucky; 
Economic development for tobacco regions: 44.4%; 
Education: 10.1%; 
Health: 35.4%; 
Infrastructure: 5.6%; 
Tobacco control: 4.5%. 

State: Louisiana; 
Debt on securitized funds: 60%; 
General purposes: 0.2%; 
Health: 9.4%; 
Tobacco control: 0.3%; 
Unallocated: 30%. 

State: Maine; 
Education: 21.6%; 
General purposes: 0.1%; 
Health: 37.5%; 
Social services: 11.3%; 
Tobacco control: 29.5%. 

State: Maryland; 
Education: 2%; 
General purposes: 19.7%; 
Health: 64.2%; 
Payments to tobacco growers: 3.7%; 
Tobacco control: 6.2%; 
Unallocated: 4.2%. 

State: Massachusetts; 
General purposes: 100%. 

State: Michigan; 
Budget shortfalls: 2.4%; 
Education: 34.4%; 
General purposes: 0.1%; 
Health: 62.9%; 
Tobacco control: 0.2%. 

State: Missouri; 
Budget shortfalls: 49.1%; 
General purposes: 1.7%; 
Health: 48.9%; 
Tobacco control: 0.3%. 

State: Montana; 
General purposes: 10.7%; 
Health: 68.8%; 
Social services: 9.6%; 
Tobacco control: 11%. 

State: Nebraska; 
General purposes: 0.2%; 
Health: 57.1%; 
Social services: 7.7%; 
Tobacco control: 0%; 
Unallocated: 35%. 

State: Nevada; 
Education: 56.5%; 
General purposes: 0.4%; 
Health: 22.3%; 
Social services: 12.8%; 
Tobacco control: 8%. 

State: New Hampshire; 
Education: 100%. 

State: New Jersey; 
Debt on securitized funds: 100%. 

State: New Mexico; 
Education: 2.3%; 
General purposes: 36.4%; 
Health: 61.3%. 

State: New York; 
Budget shortfalls: 72.2%; 
Debt on securitized funds: 27.8%. 

State: North Carolina; 
Economic development for tobacco regions: 53%; 
General purposes: 36.7%; 
Health: 2.6%; 
Infrastructure: 1.2%; 
Tobacco control: 6.6%. 

State: North Dakota; 
Education: 45%; 
Health: 2.1%; 
Infrastructure: 45%; 
Tobacco control: 7.9%. 

State: Ohio; 
Economic development for tobacco regions: 4.3%; 
Education: 2.1%; 
General purposes: 0.3%; 
Health: 11.8%; 
Infrastructure: 43.2%; 
Social services: 1.3%; 
Tobacco control: 36.9%. 

State: Oklahoma; 
General purposes: 2%; 
Health: 69.5%; 
Tobacco control: 28.4%. 

State: Oregon; 
Debt on securitized funds: 35.5%; 
Health: 22.4%; 
Tobacco control: 0.6%; 
Unallocated: 41.5%. 

State: Pennsylvania; 
Health: 100%. 

State: Rhode Island; 
Debt on securitized funds: 100%. 

State: South Carolina; 
Debt on securitized funds: 100%. 

State: South Dakota; 
Debt on securitized funds: 61.7%; 
Education: 36.3%; 
Tobacco control: 2%. 

State: Tennessee; 
General purposes: 100%. 

State: Utah; 
General purposes: 0.4%; 
Health: 47.7%; 
Reserves/Rainy day funds: 29.7%; 
Social services: 7.3%; 
Tobacco control: 15%. 

State: Vermont; 
General purposes: 1.4%; 
Health: 64.1%; 
Social services: 16.8%; 
Tobacco control: 17.7%. 

State: Virginia; 
Economic development for tobacco regions: 35%; 
Health: 38.6%; 
Payments to tobacco growers: 16.2%; 
Tobacco control: 10.2%. 

State: Washington; 
Debt on securitized funds: 29.2%; 
Health: 70.8%. 

State: West Virginia; 
Health: 38.5%; 
Tobacco control: 11.5%; 
Unallocated: 50%. 

State: Wisconsin; 
Debt on securitized funds: 100%. 

State: Wyoming; 
General purposes: 0.8%; 
Health: 46.8%; 
Social services: 25.2%; 
Tobacco control: 27.1%. 

Total; 
Budget shortfalls: 11.4%; 
Debt on securitized funds: 23.4%; 
Economic development for tobacco regions: 4.7%; 
Education: 4.8%; 
General purposes: 11.1%; 
Health: 31.6%; 
Infrastructure: 2.7%; 
Payments to tobacco growers: 0.4%; 
Reserves/Rainy day funds: 0.3%; 
Social services: 2.3%; 
Tax reductions: 0.0%; 
Tobacco control: 4.5%; 
Unallocated: 2.7%.

Sources: State budget offices and their designees (data); GAO 
(analysis). 

Note: Percentages may not add up to 100 because of rounding. Appendix 
IV shows the dollar amount each state allocated to the various 
categories. 

[End of table]

We are sending copies of this report to interested congressional 
committees and to others upon request. Copies are also available at no 
charge on the GAO Web site at [Hyperlink, http://www.gao.gov]. Please 
contact me at (202) 512-3841 or [Hyperlink, robinsonr@gao.gov] if you 
or your staff have any questions concerning this report. Major 
contributors to this report are listed in appendix VI. 

Signed by: 

Robert A. Robinson: 
Managing Director, Natural Resources and Environment: 

List of Congressional Requesters: 

The Honorable Saxby Chambliss: 
Chairman: 
The Honorable Tom Harkin: 
Ranking Democratic Member: 
Committee on Agriculture, Nutrition, and Forestry: 
United States Senate: 

The Honorable Robert Goodlatte: 
Chairman, Committee on Agriculture: 
House of Representatives: 

The Honorable Jim Bunning: 
United States Senate: 

[End of section]

Appendixes: 

Appendix I Objectives, Scope, and Methodology: 

The Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) 
requires GAO to report annually on the amount of Master Settlement 
Agreement (MSA) payments that states receive and on how they use these 
payments for the years 2002 through 2006. This report is the fourth in 
a series of reports responding to the 2002 Farm Bill requirement. In 
December 2002, we issued the report Tobacco Settlement: States' 
Allocations of Phase II Funds [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-03-262R], which provides information on the National 
Tobacco Grower Settlement Trust (commonly referred to as the Phase II 
agreement). In February 2003, we issued the report Tobacco Settlement: 
States' Allocations of Fiscal Years 2002 and 2003 Master Settlement 
Agreement Payments [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-
407]). In March 2004, we issued the report Tobacco Settlement: States' 
Allocations of Fiscal Year 2003 and Expected Fiscal Year 2004 Payments 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-518]). We also 
reported on states' receipt and use of MSA payments for fiscal years 
2000 and 2001 in a June 2001 report, Tobacco Settlement: States' Use of 
Master Settlement Agreement Payments [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-01-851]. 

To respond to the 2002 Farm Bill requirement, the objectives of this 
study were to provide information on (1) the amount of payments 
received by the 46 states party to the MSA during fiscal year 2004, and 
the amount of payments these states expect to receive during fiscal 
year 2005, and (2) states' allocations of MSA funds to various program 
categories for fiscal year 2004 and states' expected allocations for 
fiscal year 2005.[Footnote 14],[Footnote 15]

To address these objectives, we surveyed[Footnote 16] the executive 
budget offices, or their designees, in the 46 states party to the MSA. 
In addition, we performed some data reliability testing and 
independently corroborated these data to the extent possible. We 
obtained and reviewed MSA disbursement data provided by the National 
Association of Attorneys General[Footnote 17] and compared it with 
payment data provided by the states. We contacted state officials to 
discuss any data entries on the surveys that were questionable, and we 
resolved all discrepancies between the survey data and the data 
provided by the National Association of Attorneys General. We also 
reviewed previous GAO reports and other relevant studies by 
organizations such as the National Conference of State Legislatures. 
Finally, we contacted the National Association of State Budget Officers 
to request their assistance in encouraging state officials to respond 
to our survey. We conducted our work from July 2004 through February 
2005 in accordance with generally accepted government auditing 
standards. 

Our study focuses on the states' shares of MSA payments and does not 
include information on allocations of MSA payments to cities and 
counties in California and New York.[Footnote 18] In addition, we did 
not collect information on MSA payments made to the District of 
Columbia or the five U.S. territories that are also party to the MSA. 
Because we completed our fieldwork before states received their fiscal 
year 2005 payments, we were unable to obtain final information on the 
actual MSA payments states received during fiscal year 2005. 
Consequently, we obtained information on states' expected fiscal year 
2005 MSA payments. 

Survey Methodology and Categorization of States' Allocations: 

We used a survey instrument somewhat similar to the one used to obtain 
information for our March 2004 report. In July 2004, we contacted the 
46 state budget officials, or their designees, who completed the 
surveys for our March 2004 report. The officials in most of these 
states indicated they would be the respondents for this year's survey; 
a few identified new respondents. In August 2004, we e-mailed the 
survey to the identified officials in each of the 46 states party to 
the MSA. We received responses from all 46 states. From these 
responses, we obtained information on (1) the MSA payments states 
received in fiscal year 2004 and the MSA payments they expect to 
receive in fiscal year 2005 and (2) the states' allocations and 
expected allocations of MSA payments in fiscal years 2004 and 2005, 
respectively. We also obtained information on the states' proceeds, if 
any, from securitization or expected securitization in fiscal years 
2004 and 2005, respectively, and the allocation of the securitized 
proceeds. Furthermore, in the survey, we asked the states to categorize 
their allocations of MSA payments and securitized MSA proceeds for 
fiscal years 2004 and 2005, using the 13 program categories developed 
for our report. (See below for the definitions of the 13 categories.)

The level of detail for individual states varies because we relied on 
state-reported information. We performed some reliability testing and 
independently corroborated, to the extent possible, the accuracy of the 
information provided to us by the state budget offices. We reviewed 
earlier reports, compared payment amounts reported by states with 
amounts reported to the National Association of Attorneys General, and 
contacted many states to clarify the information they provided. On the 
basis of this work, we determined that these data were reliable enough 
for our purposes. 

In addition, there are no sampling errors because this was not a sample 
survey. Nevertheless, the practical difficulties of conducting any 
survey may introduce errors, commonly referred to as nonsampling 
errors. For example, difficulties in how a particular question is 
interpreted, in the sources of information that are available to 
respondents, or in how the data are entered into a database or were 
analyzed can introduce unwanted variability into the survey results. We 
took steps in the development of the survey, the data collection, and 
the data editing and analysis to minimize these nonsampling errors. For 
example, we edited the completed surveys for consistency and contacted 
state budget offices to clarify responses, verified all survey data 
that were entered into our database, and verified that the computer 
programs were written correctly. 

We took information on MSA payments and securitized proceeds received 
and allocated for fiscal years 2000 through 2003 that we collected for 
previous GAO reports dealing with the MSA[Footnote 19] and compared it 
with receipts and allocations for fiscal years 2004 and 2005. 

Categories of States' Allocations: 

Budget shortfalls: This category is comprised of amounts allocated to 
balance state budgets and close gaps or reduce deficits resulting from 
lower than anticipated revenues or increased mandatory or essential 
expenditures. 

Debt service on securitized funds: This category consists of amounts 
allocated to service the debt on bonds issued when the state 
securitized all or a portion of its MSA payments. 

Economic development for tobacco regions: This category is comprised of 
amounts allocated for economic development projects in tobacco states, 
such as infrastructure projects, education and job training programs, 
and research on alternative uses of tobacco and alternative crops. This 
category includes projects specifically designed to benefit tobacco 
growers as well as economic development that may serve a larger 
population within a tobacco state. 

Education: This category is comprised of amounts allocated for 
education programs such as day care, preschool, Head Start, early 
childhood education, elementary and secondary education, after-school 
programs, and higher education. This category does not include money 
for capital projects such as construction of school buildings. 

General purposes: This category is comprised of amounts allocated for 
attorneys' fees and other items, such as law enforcement or community 
development, that could not be placed into a more precise category. 
This category also includes amounts allocated to a state's general fund 
that were not earmarked for any particular purpose. Amounts used to 
balance state budgets and close gaps or reduce deficits should be 
categorized as budget shortfalls, rather than as general purposes. 

Health: This category is comprised of amounts allocated for direct 
health care services; health insurance, including Medicaid and the 
State Children's Health Insurance Program; hospitals; medical 
technology; public health services; and health research. This category 
does not include money for capital projects such as construction of 
health facilities. 

Infrastructure: This category is comprised of amounts allocated for 
capital projects such as construction and renovation of health-care, 
education and social services facilities; water and transportation 
projects; and municipal and state government buildings. This category 
includes retirement of debt owed on capital projects. 

Payments to tobacco growers: This category is comprised of amounts 
allocated for direct payments to tobacco growers, including subsidies 
and crop conversion programs. 

Reserves/Rainy day funds: This category is comprised of amounts 
allocated to state budget reserves such as rainy day and budget 
stabilization funds not earmarked for specific programs. Amounts 
allocated to reserves that are earmarked for specific areas are 
categorized under those areas--for example, reserve amounts earmarked 
for economic development purposes should be categorized in the economic 
development category. 

Social services: This category is comprised of amounts allocated for 
social services, such as programs for the aging, assisted living, Meals 
on Wheels, drug courts, child welfare, and foster care. This category 
also includes amounts allocated to special funds established for 
children's programs. 

Tax reductions: This category is comprised of amounts allocated for tax 
reductions such as property tax rebates and earned income tax credits. 

Tobacco control: This category is comprised of amounts allocated for 
tobacco control programs such as prevention, including youth education, 
enforcement, and cessation services. 

Unallocated: This category is comprised of amounts not allocated for 
any specific purpose, such as amounts allocated to dedicated funds that 
have no specified purpose; amounts states chose not to allocate in the 
year MSA payments were received that will be available for allocation 
in a subsequent fiscal year; interest earned from dedicated funds not 
yet allocated; and amounts that have not been allocated because the 
state had not made a decision on the use of the MSA payments. 

[End of section]

Appendix II: Allocations of MSA Payments for 46 States: 

State: Alabama; 
Percent: 1.6161308%. 

State: Alaska; 
Percent: 0.3414187%. 

State: Arizona; 
Percent: 1.4738845%. 

State: Arkansas; 
Percent: 0.8280661%. 

State: California; 
Percent: 12.7639554%. 

State: Colorado; 
Percent: 1.3708614%. 

State: Connecticut; 
Percent: 1.8565373%. 

State: Delaware; 
Percent: 0.3954695%. 

State: Georgia; 
Percent: 2.4544575%. 

State: Hawaii; 
Percent: 0.6018650%. 

State: Idaho; 
Percent: 0.3632632%. 

State: Illinois; 
Percent: 4.6542472%. 

State: Indiana; 
Percent: 2.0398033%. 

State: Iowa; 
Percent: 0.8696670%. 

State: Kansas; 
Percent: 0.8336712%. 

State: Kentucky; 
Percent: 1.7611586%. 

State: Louisiana; 
Percent: 2.2553531%. 

State: Maine; 
Percent: 0.7693505%. 

State: Maryland; 
Percent: 2.2604570%. 

State: Massachusetts; 
Percent: 4.0389790%. 

State: Michigan; 
Percent: 4.3519476%. 

State: Missouri; 
Percent: 2.2746011%. 

State: Montana; 
Percent: 0.4247591%. 

State: Nebraska; 
Percent: 0.5949833%. 

State: Nevada; 
Percent: 0.6099351%. 

State: New Hampshire; 
Percent: 0.6659340%. 

State: New Jersey; 
Percent: 3.8669963%. 

State: New Mexico; 
Percent: 0.5963897%. 

State: New York; 
Percent: 12.7620310%. 

State: North Carolina; 
Percent: 2.3322850%. 

State: North Dakota; 
Percent: 0.3660138%. 

State: Ohio; 
Percent: 5.0375098%. 

State: Oklahoma; 
Percent: 1.0361370%. 

State: Oregon; 
Percent: 1.1476582%. 

State: Pennsylvania; 
Percent: 5.7468588%. 

State: Rhode Island; 
Percent: 0.7189054%. 

State: South Carolina; 
Percent: 1.1763519%. 

State: South Dakota; 
Percent: 0.3489458%. 

State: Tennessee; 
Percent: 2.4408945%. 

State: Utah; 
Percent: 0.4448869%. 

State: Vermont; 
Percent: 0.4111851%. 

State: Virginia; 
Percent: 2.0447451%. 

State: Washington; 
Percent: 2.0532582%. 

State: West Virginia; 
Percent: 0.8864604%. 

State: Wisconsin; 
Percent: 2.0720390%. 

State: Wyoming; 
Percent: 0.2483449. 

Sources: [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-518] and 
the Master Settlement Agreement. 

[End of table]

[End of section]

Appendix III: States' Allocations of Combined MSA Payments and 
Securitized Proceeds for Fiscal Years 2000 through 2005: 

Dollars in millions (current year dollars) and percent[A]. 

Budget shortfalls; 
Fiscal year 2000-01: Allocation: [A]; 
Fiscal year 2000-01: Percentage: [A]; 
Fiscal year 2002: Allocation: $2,448; 
Fiscal year 2002: Percentage: 20%; 
Fiscal year 2003: Allocation: $5,038; 
Fiscal year 2003: Percentage: 36%; 
Fiscal year 2004: Allocation: $5,059; 
Fiscal year 2004: Percentage: 44%; 
Fiscal year 2005 (expected): Allocation: $686; 
Fiscal year 2005 (expected): Percentage: 11%. 

Debt service on securitized funds; 
Fiscal year 2000-01: Allocation: [A]; 
Fiscal year 2000- 01: Percentage: [A]; 
Fiscal year 2002: Allocation: $271; 
Fiscal year 2002: Percentage: 2%; 
Fiscal year 2003: Allocation: $339; 
Fiscal year 2003: Percentage: 2%; 
Fiscal year 2004: Allocation: $998; 
Fiscal year 2004: Percentage: 9%; 
Fiscal year 2005 (expected): Allocation: $1,405; 
Fiscal year 2005 (expected): Percentage: 23%. 

Economic development for tobacco regions; 
Fiscal year 2000-01: Allocation: $466; 
Fiscal year 2000-01: Percentage: 4%; 
Fiscal year 2002: Allocation: $218; 
Fiscal year 2002: Percentage: 2%; 
Fiscal year 2003: Allocation: $285; 
Fiscal year 2003: Percentage: 2%; 
Fiscal year 2004: Allocation: $291; 
Fiscal year 2004: Percentage: 3%; 
Fiscal year 2005 (expected): Allocation: $284; 
Fiscal year 2005 (expected): Percentage: 5%. 

Education; 
Fiscal year 2000-01: Allocation: $848; 
Fiscal year 2000-01: Percentage: 7%; 
Fiscal year 2002: Allocation: $1,132; 
Fiscal year 2002: Percentage: 9%; 
Fiscal year 2003: Allocation: $531; 
Fiscal year 2003: Percentage: 4%; 
Fiscal year 2004: Allocation: $280; 
Fiscal year 2004: Percentage: 2%; 
Fiscal year 2005 (expected): Allocation: $287; 
Fiscal year 2005 (expected): Percentage: 5%. 

General purposes; 
Fiscal year 2000-01: Allocation: $623; 
Fiscal year 2000-01: Percentage: 5%; 
Fiscal year 2002: Allocation: $684; 
Fiscal year 2002: Percentage: 6%; 
Fiscal year 2003: Allocation: $1,111; 
Fiscal year 2003: Percentage: 8%; 
Fiscal year 2004: Allocation: $747; 
Fiscal year 2004: Percentage: 7%; 
Fiscal year 2005 (expected): Allocation: $666; 
Fiscal year 2005 (expected): Percentage: 11%. 

Health; 
Fiscal year 2000-01: Allocation: $4,788; 
Fiscal year 2000-01: Percentage: 38; 
Fiscal year 2002: Allocation: $4,434; 
Fiscal year 2002: Percentage: 37%; 
Fiscal year 2003: Allocation: $3,455; 
Fiscal year 2003: Percentage: 24%; 
Fiscal year 2004: Allocation: $2,263; 
Fiscal year 2004: Percentage: 20%; 
Fiscal year 2005 (expected): Allocation: $1,898; 
Fiscal year 2005 (expected): Percentage: 32%. 

Infrastructure; 
Fiscal year 2000-01: Allocation: $294; 
Fiscal year 2000-01: Percentage: 2%; 
Fiscal year 2002: Allocation: $1,222; 
Fiscal year 2002: Percentage: 10%; 
Fiscal year 2003: Allocation: $1,044; 
Fiscal year 2003: Percentage: 7%; 
Fiscal year 2004: Allocation: $759; 
Fiscal year 2004: Percentage: 7%; 
Fiscal year 2005 (expected): Allocation: $164; 
Fiscal year 2005 (expected): Percentage: 3%. 

Payments to tobacco growers; 
Fiscal year 2000-01: Allocation: $235; 
Fiscal year 2000-01: Percentage: 2%; 
Fiscal year 2002: Allocation: $192; 
Fiscal year 2002: Percentage: 2%; 
Fiscal year 2003: Allocation: $43; 
Fiscal year 2003: Percentage: 0%; 
Fiscal year 2004: Allocation: $25; 
Fiscal year 2004: Percentage: 0%; 
Fiscal year 2005 (expected): Allocation: $26; 
Fiscal year 2005 (expected): Percentage: 0%. 

Reserves/Rainy day funds; 
Fiscal year 2000-01: Allocation: $603; 
Fiscal year 2000-01: Percentage: 5%; 
Fiscal year 2002: Allocation: $124; 
Fiscal year 2002: Percentage: 1%; 
Fiscal year 2003: Allocation: $24; 
Fiscal year 2003: Percentage: 0%; 
Fiscal year 2004: Allocation: $14; 
Fiscal year 2004: Percentage: 0%; 
Fiscal year 2005 (expected): Allocation: $18; 
Fiscal year 2005 (expected): Percentage: 0%. 

Social services; 
Fiscal year 2000-01: Allocation: $231; 
Fiscal year 2000-01: Percentage: 2%; 
Fiscal year 2002: Allocation: $278; 
Fiscal year 2002: Percentage: 2%; 
Fiscal year 2003: Allocation: $160; 
Fiscal year 2003: Percentage: 1%; 
Fiscal year 2004: Allocation: $142; 
Fiscal year 2004: Percentage: 1%; 
Fiscal year 2005 (expected): Allocation: $136; 
Fiscal year 2005 (expected): Percentage: 2%. 

Tax reductions; 
Fiscal year 2000-01: Allocation: $416; 
Fiscal year 2000-01: Percentage: 3%; 
Fiscal year 2002: Allocation: $35; 
Fiscal year 2002: Percentage: 0%; 
Fiscal year 2003: Allocation: $109; 
Fiscal year 2003: Percentage: 1%; 
Fiscal year 2004: Allocation: $56; 
Fiscal year 2004: Percentage: 1%; 
Fiscal year 2005 (expected): Allocation: $0; 
Fiscal year 2005 (expected): Percentage: 0%. 

Tobacco control; 
Fiscal year 2000-01: Allocation: $790; 
Fiscal year 2000-01: Percentage: 6%; 
Fiscal year 2002: Allocation: $375; 
Fiscal year 2002: Percentage: 3%; 
Fiscal year 2003: Allocation: $276; 
Fiscal year 2003: Percentage: 2%; 
Fiscal year 2004: Allocation: $223; 
Fiscal year 2004: Percentage: 2%; 
Fiscal year 2005 (expected): Allocation: $268; 
Fiscal year 2005 (expected): Percentage: 5%. 

Unallocated; 
Fiscal year 2000-01: Allocation: $3,217; 
Fiscal year 2000-01: Percentage: 26%; 
Fiscal year 2002: Allocation: $584; 
Fiscal year 2002: Percentage: 5%; 
Fiscal year 2003: Allocation: $1,720; 
Fiscal year 2003: Percentage: 12%; 
Fiscal year 2004: Allocation: $575; 
Fiscal year 2004: Percentage: 5%; 
Fiscal year 2005 (expected): Allocation: $161; 
Fiscal year 2005 (expected): Percentage: 3%. 

Total; 
Fiscal year 2000-01: Allocation: $12,511; 
Fiscal year 2000-01: Percentage: 100%; 
Fiscal year 2002: Allocation: $11,998; 
Fiscal year 2002: Percentage: 99%; 
Fiscal year 2003: Allocation: $14,135; 
Fiscal year 2003: Percentage: 99%; 
Fiscal year 2004: Allocation: $11,432; 
Fiscal year 2004: Percentage: 101%; 
Fiscal year 2005 (expected): Allocation: $5,998; 
Fiscal year 2005 (expected): Percentage: 100%. 

Sources: [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-518] and 
state budget offices or their designees (data); GAO (analysis). 

Note: Percentages and totals may not add up due to rounding. The 
amounts for each year are in the current year dollars for that year. 
Percentages across years may be compared but not dollars across years 
because the dollars are not adjusted to a constant base year. 

[A] We did not obtain information on allocations for budget shortfalls 
and debt service on securitized funds in fiscal years 2000 and 2001. 

[End of table]

[End of section]

Appendix IV: State-Specific Information on Amounts of Master Settlement 
Agreement Payments and Securitized Proceeds Received and Allocated: 

This appendix presents the following information for each of the 46 
states that are party to the MSA: 

* the amount of MSA payments received and the categories to which they 
were allocated for fiscal year 2004;

* the amount of MSA payments expected to be received and the expected 
categories to which they will be allocated for fiscal year 2005; and: 

* the amount of securitized proceeds received or expected to be 
received and the categories to which they were allocated or expected to 
be allocated for fiscal years 2004 and 2005, respectively, if 
applicable (applies to 5 states). 

Tables 6 through 51 include only those program categories to which a 
state reported allocating funds. If a category is not listed, it means 
the state did not allocate funds to the category. In some cases, the 
total amounts allocated may exceed the actual MSA payments and 
securitized proceeds because the amounts allocated include carry-over 
funds from prior years and/or the interest earned on those funds. Some 
states that allocated funds to a program category did not provide 
examples of programs receiving funds. Only 5 states--Iowa, New Jersey, 
New York, Oregon, and Rhode Island--received or expected to receive, or 
allocated or expected to allocate, securitized proceeds in fiscal year 
2004 or 2005, respectively. In those cases, we combined securitized 
proceeds with MSA payments before allocating the funds to categories. 

Alabama: 

Alabama reported receiving $101,871,680 from MSA payments in fiscal 
year 2004 and expects to receive $96,000,000 in fiscal year 2005. 

Table 6: Alabama's MSA Payment Allocations: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $13,000,000; 
Fiscal year 2005 expected allocation: $13,000,000. 

Program area: Education; 
Fiscal year 2004 allocation: $11,675,188; 
Fiscal year 2005 expected allocation: $10,903,817; 
Examples of programs receiving or expected to receive allocations: 
Alternative schools. 

Program area: General purposes; 
Fiscal year 2004 allocation: $7,524,430; 
Fiscal year 2005 expected allocation: $7,027,298; 
Examples of programs receiving or expected to receive allocations: 
Juvenile Probation Officers, Administration, Forensic Sciences. 

Program area: Health; 
Fiscal year 2004 allocation: $43,933,579; 
Fiscal year 2005 expected allocation: $41,030,925; 
Examples of programs receiving or expected to receive allocations: 
Public Health, mental health, Medicaid, senior services. 

Program area: Social services; 
Fiscal year 2004 allocation: $25,207,792; 
Fiscal year 2005 expected allocation: $23,542,332; 
Examples of programs receiving or expected to receive allocations: 
Child welfare, Children's programs, Youth services. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $530,690; 
Fiscal year 2005 expected allocation: $495,628; 
Examples of programs receiving or expected to receive allocations: 
Tobacco enforcement on minors. 

Total; 
Fiscal year 2004 allocation: $101,871,679; 
Fiscal year 2005 expected allocation: $96,000,000. 

Source: Alabama Executive Budget Office. 

[End of table]

Alaska: 

Alaska reported receiving $21,438,845 from MSA payments in fiscal year 
2004 and expects to receive $23,347,500 in fiscal year 2005. 

Table 7: Alaska's MSA Payment Allocations: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $17,151,076; 
Fiscal year 2005 expected allocation: $18,678,000. 

Program area: Health; 
Fiscal year 2004 allocation: $857,554; 
Fiscal year 2005 expected allocation: $1,111,500; 
Examples of programs receiving or expected to receive allocations: 
Medicaid and public health. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $3,430,215; 
Fiscal year 2005 expected allocation: $3,558,000; 
Examples of programs receiving or expected to receive allocations: 
Sting operations. 

Total; 
Fiscal year 2004 allocation: $21,438,845; 
Fiscal year 2005 expected allocation: $23,347,500. 

Source: Alaska Office of Management and Budget. 

Arizona: 

Arizona reported receiving $92,648,165 from MSA payments in fiscal year 
2004 and expects to receive $90,304,100 in fiscal year 2005. 

Table 8: Arizona's MSA Payment Allocation: 

Program area: Health; 
Fiscal year 2004 allocation: $92,648,165; 
Fiscal year 2005 expected allocation: $90,304,100. 

Total; 
Fiscal year 2004 allocation: $92,648,165; 
Fiscal year 2005 expected allocation: $90,304,100. 

Source: Arizona Governor's Office of Strategic Planning and Budgeting. 

[End of table]

Arkansas: 

Arkansas reported receiving $52,688,976 from MSA payments in fiscal 
year 2004 and expects to receive $50,000,000 in fiscal year 2005. 

Table 9: Arkansas's MSA Payment Allocations: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $5,000,000; 
Fiscal year 2005 expected allocation: $5,000,000. 

Program area: Education; 
Fiscal year 2004 allocation: $2,486,503; 
Fiscal year 2005 expected allocation: $2,346,300; 
Examples of programs receiving or expected to receive allocations: 
School of Public Health. 

Program area: Health; 
Fiscal year 2004 allocation: $44,391,493; 
Fiscal year 2005 expected allocation: $41,842,720; 
Examples of programs receiving or expected to receive allocations: 
Prevention and cessation, biomedical research, Medicaid, and Minority 
Health. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $810,980; 
Fiscal year 2005 expected allocation: $810,980; 
Examples of programs receiving or expected to receive allocations: 
Sales to Minors Enforcement. 

Total; 
Fiscal year 2004 allocation: $52,688,976; 
Fiscal year 2005 expected allocation: $50,000,000. 

Source: Arkansas Department of Finance and Administration. 

[End of table]

California: 

California reported receiving $400,746,161 from MSA payments in fiscal 
year 2004 and expects to receive $404,500,000 in fiscal year 2005. 

Table 10: California's MSA Payment Allocation: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $400,746,161; 
Fiscal year 2005 expected allocation: $404,500,000. 

Total; 
Fiscal year 2004 allocation: $400,746,161; 
Fiscal year 2005 expected allocation: $404,500,000. 

Source: California Department of Finance. 

Note: These MSA payments include only payments made to the state, which 
amount to 50 percent of the annual payments made by the tobacco 
companies to California. Cities and counties in the state receive the 
other 50 percent of the annual MSA payments to California. 

[End of table]

Colorado: 

Colorado reported receiving $87,037,529 from MSA payments in fiscal 
year 2004 and expects to receive $88,878,470 in fiscal year 2005. 

Table 11: Colorado's MSA Payment Allocations: 

Program area: Budget shortfalls; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $26,159,617. 

Program area: Education; 
Fiscal year 2004 allocation: $11,398,410; 
Fiscal year 2005 expected allocation: $16,592,664; 
Examples of programs receiving or expected to receive allocations: 
Literacy programs for elementary students, regional libraries, state 
council on the arts. 

Program area: Health; 
Fiscal year 2004 allocation: $32,665,516; 
Fiscal year 2005 expected allocation: $36,140,261; 
Examples of programs receiving or expected to receive allocations: 
Nurse home visitor's program, primary and preventive care grants, 
Children's Health Insurance Program+, breast and cervical cancer 
program, dental loan repayment, Medicaid mental health capitation, 
Child Mental Health Treatment Act. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $1,900,000; 
Examples of programs receiving or expected to receive allocations: 
Fitzsimons Health Sciences Center at the University of Colorado. 

Program area: Social services; 
Fiscal year 2004 allocation: $1,902,681; 
Fiscal year 2005 expected allocation: $4,351,876; 
Examples of programs receiving or expected to receive allocations: 
State veteran's fund, legal services for victims of family violence, 
services to juveniles. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $3,939,029; 
Fiscal year 2005 expected allocation: $4,351,876; 
Examples of programs receiving or expected to receive allocations: 
Cessation and prevention grants. 

Total; 
Fiscal year 2004 allocation: $49,905,636; 
Fiscal year 2005 expected allocation: $89,496,294[A]. 

Source: Colorado Governor's Office of State Planning and Budgeting. 

[A] Amount includes carry-over funds and interest earned. 

[End of table]

Connecticut: 

Connecticut reported receiving $116,578,313 from MSA payments in fiscal 
year 2004 and expects to receive $109,000,000 in fiscal year 2005. 

Table 12: Connecticut's MSA Payment Allocation: 

Program area: General purposes; 
Fiscal year 2004 allocation: $116,578,313; 
Fiscal year 2005 expected allocation: $109,000,000; 
Examples of programs receiving or expected to receive allocations: 
General fund revenue. 

Total; 
Fiscal year 2004 allocation: $116,578,313; 
Fiscal year 2005 expected allocation: $109,000,000. 

Source: Connecticut Office of Policy and Management, Fiscal and Program 
Policy Section. 

[End of table]

Delaware: 

Delaware reported receiving $24,832,878 from MSA payments in fiscal 
year 2004 and expects to receive $26,100,000 in fiscal year 2005. 

Table 13: Delaware's MSA Payment Allocations: 

Program area: Education; 
Fiscal year 2004 allocation: $1,297,100; 
Fiscal year 2005 expected allocation: $1,655,200; 
Examples of programs receiving or expected to receive allocations: 
Scholarships for nursing students at community college and those 
working in state facilities. 

Program area: General purposes; 
Fiscal year 2004 allocation: $169,700; 
Fiscal year 2005 expected allocation: $169,700; 
Examples of programs receiving or expected to receive allocations: 
Health Care Commission staff; 
survey of school-age children on alcohol, drug, and tobacco use; 
establishment and support of health library network. 

Program area: Health; 
Fiscal year 2004 allocation: $18,070,200; 
Fiscal year 2005 expected allocation: $18,773,100; 
Examples of programs receiving or expected to receive allocations: 
Breast and cervical cancer screening, Senior Prescription Assistance 
Program, several cancer resource/support programs, defibrillators. 

Program area: Social services; 
Fiscal year 2004 allocation: $430,000; 
Fiscal year 2005 expected allocation: $430,000; 
Examples of programs receiving or expected to receive allocations: 
Attendant care services for persons living in the community with 
disabilities. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $5,072,000; 
Fiscal year 2005 expected allocation: $5,072,000; 
Examples of programs receiving or expected to receive allocations: 
Tobacco prevention, control, and enforcement (e.g., Quitline smoking 
cessation programs and advertising, undercover kids, enforcement 
agents). 

Total; 
Fiscal year 2004 allocation: $25,039,000[A]; 
Fiscal year 2005 expected allocation: $26,100,000. 

Source: Delaware Health and Social Services. 

[A] Amount includes carry-over funds. 

[End of table]

Georgia: 

Georgia reported receiving $156,330,702 from MSA payments in fiscal 
year 2004 and expects to receive $146,123,673 in fiscal year 2005. 

Table 14: Georgia's MSA Payment Allocations: 

Program area: Economic development for tobacco regions; 
Fiscal year 2004 allocation: $65,834,093; 
Fiscal year 2005 expected allocation: $47,123,333; 
Examples of programs receiving or expected to receive allocations: 
OneGeorgia Authority. 

Program area: Health; 
Fiscal year 2004 allocation: $88,894,466; 
Fiscal year 2005 expected allocation: $89,293,004; 
Examples of programs receiving or expected to receive allocations: 
Support for Medicaid and State Children's Health Insurance Program, 
Critical Access Hospital Reimbursement, Medicaid Home and Community 
Based Waiver Programs, Georgia Cancer Coalition, public health 
programs. 

Program area: Social services; 
Fiscal year 2004 allocation: $7,149,804; 
Fiscal year 2005 expected allocation: $7,149,804; 
Examples of programs receiving or expected to receive allocations: Home 
and community-based services to the elderly, early intervention for 
families at risk for child abuse. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $12,506,336; 
Fiscal year 2005 expected allocation: $12,803,859; 
Examples of programs receiving or expected to receive allocations: 
Tobacco Use Prevention Program, compliance and enforcement for underage 
smoking. 

Total; 
Fiscal year 2004 allocation: $174,384,699[A]; 
Fiscal year 2005 expected allocation: $156,370,000[A]. 

Source: Georgia Office of Planning and Budget. 

[A] Amounts include carry-over funds. 

[End of table]

Hawaii: 

Hawaii reported receiving $38,837,269 from MSA payments in fiscal year 
2004 and expects to receive $42,574,552 in fiscal year 2005. 

Table 15: Hawaii's MSA Payment Allocations: 

Program area: General purposes; 
Fiscal year 2004 allocation: $2,814,702; 
Fiscal year 2005 expected allocation: $3,054,035; 
Examples of programs receiving or expected to receive allocations: 
Tobacco Enforcement Special Fund of the Attorney General's Office for 
MSA enforcement, assessments for central services and administrative 
expenses. 

Program area: Health; 
Fiscal year 2004 allocation: $12,607,898; 
Fiscal year 2005 expected allocation: $13,832,181; 
Examples of programs receiving or expected to receive allocations: 
Department of Health for public health programs, Department of Human 
Services for children's health insurance programs. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $10,086,319; 
Fiscal year 2005 expected allocation: $11,065,745; 
Examples of programs receiving or expected to receive allocations: Debt 
service on University of Hawaii revenue bonds issued for the new Health 
and Wellness Center, to include a new biomedical research center and 
medical school. 

Program area: Reserves/Rainy day funds; 
Fiscal year 2004 allocation: $8,825,529; 
Fiscal year 2005 expected allocation: $9,682,527; 
Examples of programs receiving or expected to receive allocations: 
State of Hawaii's Emergency and Budget Reserve Fund. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $4,502,821; 
Fiscal year 2005 expected allocation: $4,940,064; 
Examples of programs receiving or expected to receive allocations: 
Tobacco Prevention and Control Trust Fund. 

Total; 
Fiscal year 2004 allocation: $38,837,269; 
Fiscal year 2005 expected allocation: $42,574,552. 

Source: Hawaii Department of Budget and Finance. 

[End of table]

Idaho: 

Idaho reported receiving $22,818,949 from MSA payments in fiscal year 
2004 and expects to receive $23,830,716 in fiscal year 2005. 

Table 16: Idaho's MSA Payment Allocations: 

Program area: Health; 
Fiscal year 2004 allocation: $835,000; 
Fiscal year 2005 expected allocation: $500,000; 
Examples of programs receiving or expected to receive allocations: 
Catastrophic Health Care Cost Program for tobacco-related disease 
treatment and for caring for indigent persons. 

Program area: Social services; 
Fiscal year 2004 allocation: $270,000; 
Fiscal year 2005 expected allocation: $270,000; 
Examples of programs receiving or expected to receive allocations: 
Youth courts and status offender programs related to tobacco and 
substance abuse issues. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $1,333,700; 
Fiscal year 2005 expected allocation: $1,169,700; 
Examples of programs receiving or expected to receive allocations: 
Youth smoking cessation and reduction program; 
incorporation of tobacco control model within Idaho health care 
recommended by the Centers for Disease Control and Prevention; 
tobacco counter-marketing program; 
public health districts tobacco cessation programs; 
youth tobacco investigations. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $20,380,249; 
Fiscal year 2005 expected allocation: $21,891,016. 

Total; 
Fiscal year 2004 allocation: $22,818,949; 
Fiscal year 2005 expected allocation: $23,830,716. 

Source: Idaho Division of Financial Management. 

[End of table]

Illinois: 

Illinois reported receiving $292,256,066 from MSA payments in fiscal 
year 2004 and expects to receive $270,989,300 in fiscal year 2005. 

Table 17: Illinois's MSA Payment Allocations: 

Program area: Education; 
Fiscal year 2004 allocation: $15,760,000; 
Fiscal year 2005 expected allocation: $13,800,000; 
Examples of programs receiving or expected to receive allocations: 
Payments to Centers for Academic Excellence for medical research. 

Program area: General purposes; 
Fiscal year 2004 allocation: $40,064,867; 
Fiscal year 2005 expected allocation: $25,961,291; 
Examples of programs receiving or expected to receive allocations: 
Technology marketing, technology centers, administrative fees charged 
to the tobacco fund, audit expenses charged to the tobacco fund ($22.5 
million is automatically diverted into an escrow account for attorneys' 
fees). 

Program area: Health; 
Fiscal year 2004 allocation: $181,772,387; 
Fiscal year 2005 expected allocation: $239,867,350; 
Examples of programs receiving or expected to receive allocations: 
Medicaid drugs, drugs for Senior Citizens. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $2,963,066; 
Fiscal year 2005 expected allocation: $5,000,000; 
Examples of programs receiving or expected to receive allocations: 
Capital maintenance on state-owned facilities. 

Program area: Social services; 
Fiscal year 2004 allocation: $1,030,856; 
Fiscal year 2005 expected allocation: $1,100,000; 
Examples of programs receiving or expected to receive allocations: 
Outreach program to the aging. 

Program area: Tax reductions; 
Fiscal year 2004 allocation: $55,661,645; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Property tax reduction for senior citizens. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $7,664,670; 
Fiscal year 2005 expected allocation: $12,914,500; 
Examples of programs receiving or expected to receive allocations: 
Tobacco prevention activities of local health departments, tobacco 
control programs, tobacco enforcement programs, enforcement of MSA 
provisions, grant to the American Lung Association. 

Total; 
Fiscal year 2004 allocation: $304,917,491[A]; 
Fiscal year 2005 expected allocation: $298,643,141[A]. 

Source: Illinois Governor's Office of Management and Budget. 

[A] Amounts include carry-over funds. 

[End of table]

Indiana: 

Indiana reported receiving $126,800,000 from MSA payments in fiscal 
year 2004 and expects to receive $129,300,000 in fiscal year 2005. 

Table 18: Indiana's MSA Payment Allocations: 

Program area: Economic development for tobacco regions; 
Fiscal year 2004 allocation: $46,200,000; 
Fiscal year 2005 expected allocation: $46,200,000; 
Examples of programs receiving or expected to receive allocations: 
Rural Development Administration Fund, Rural Development Council Fund, 
Value-Added Research Fund, Technology Development Grant Fund, 21st 
Century Research and Technology Fund. 

Program area: Health; 
Fiscal year 2004 allocation: $86,800,000; 
Fiscal year 2005 expected allocation: $89,200,000; 
Examples of programs receiving or expected to receive allocations: 
State Department of Health administration, Cancer Registry, Sickle 
Cell, Aid to TB Hospitals, AIDS Education, HIV/AIDS Services, Test for 
Drug-Afflicted Babies, State Chronic Diseases, WIC Supplement, MCH 
Supplement, Breast Cancer Education and Diagnosis, Minority Health 
Initiative, Minority Epidemiology, Children's Health Insurance Program, 
Hoosier Rx, Local Health Maintenance Fund, Local Health Department 
Account, Community Health Centers. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $1,450,000; 
Fiscal year 2005 expected allocation: $1,450,000; 
Examples of programs receiving or expected to receive allocations: 
Regional health facilities. 

Program area: Social services; 
Fiscal year 2004 allocation: $24,300,000; 
Fiscal year 2005 expected allocation: $24,300,000; 
Examples of programs receiving or expected to receive allocations: 
Developmentally Disabled (DD) client services, DD Direct Care salaries. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $10,800,000; 
Fiscal year 2005 expected allocation: $10,800,000; 
Examples of programs receiving or expected to receive allocations: 
Tobacco use and prevention cessation. 

Total; 
Fiscal year 2004 allocation: $169,550,000[A]; 
Fiscal year 2005 expected allocation: $171,950,000[A]. 

Source: Indiana State Budget Agency. 

[A] Amounts include carry-over funds and interest earned. 

[End of table]

Iowa: 

Iowa reported receiving $54,609,359 from MSA payments in fiscal year 
2004 and expects to receive $55,137,861 in fiscal year 2005. In 
addition, Iowa reported receiving $63,512,236 in securitized proceeds 
in fiscal year 2004 and expects to receive $63,792,236 in fiscal year 
2005. 

Table 19: Iowa's Allocations of MSA Payments and Securitized proceeds: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $42,595,300; 
Fiscal year 2005 expected allocation: $43,007,532; 
Examples of programs receiving or expected to receive allocations: 
[Empty]. 

Program area: Education; 
Fiscal year 2004 allocation: $2,153,250; 
Fiscal year 2005 expected allocation: $2,153,250; 
Examples of programs receiving or expected to receive allocations: 
Early childhood programs. 

Program area: General purposes; 
Fiscal year 2004 allocation: $2,107,285; 
Fiscal year 2005 expected allocation: $2,237,285; 
Examples of programs receiving or expected to receive allocations: 
Correctional programs. 

Program area: Health; 
Fiscal year 2004 allocation: $66,197,195; 
Fiscal year 2005 expected allocation: $66,445,465; 
Examples of programs receiving or expected to receive allocations: 
Endowment for Iowa's Health Account. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $5,068,565; 
Fiscal year 2005 expected allocation: $5,086,565; 
Examples of programs receiving or expected to receive allocations: 
Tobacco use/control and cessation programs. 

Total; 
Fiscal year 2004 allocation: $118,121,595; 
Fiscal year 2005 expected allocation: $118,930,097;. 

Source: Iowa Department of Management. 

[End of table]

Kansas: 

Kansas reported receiving $52,349,060 from MSA payments in fiscal year 
2004 and expects to receive $52,000,000 in fiscal year 2005. 

Table 20: Kansas's MSA Payment Allocations: 

Program area: Education; 
Fiscal year 2004 allocation: $8,525,000; 
Fiscal year 2005 expected allocation: $8,525,000; 
Examples of programs receiving or expected to receive allocations: 
Parent education, 4-year-olds at risk, vision research, special 
education. 

Program area: General purposes; 
Fiscal year 2004 allocation: $11,044,144; 
Fiscal year 2005 expected allocation: $5,111,533; 
Examples of programs receiving or expected to receive allocations: To 
State General Fund. 

Program area: Health; 
Fiscal year 2004 allocation: $1,800,000; 
Fiscal year 2005 expected allocation: $1,800,000; 
Examples of programs receiving or expected to receive allocations: 
Infants and toddlers, healthy start home visitors, smoking prevention 
and cessation, telekid health care link. 

Program area: Social services; 
Fiscal year 2004 allocation: $32,407,931; 
Fiscal year 2005 expected allocation: $41,865,293; 
Examples of programs receiving or expected to receive allocations: 
Juvenile justice prevention and sanction grants, children's mental 
health initiative, family-centered systems of care, therapeutic 
preschool, childcare and child welfare community services, healthwave, 
Medicaid, smart start Kansas, immunization outreach, school violence 
prevention, family preservation, community mental health center grants. 

Total; 
Fiscal year 2004 allocation: $53,777,075[A]; 
Fiscal year 2005 expected allocation: $57,301,826[A]. 

Source: Kansas Division of the Budget. 

[A] Amounts include carry-over funds and interest earned. 

[End of table]

Kentucky: 

Kentucky reported receiving $109,482,959 from MSA payments in fiscal 
year 2004 and expects to receive $108,800,000 in fiscal year 2005. 

Table 21: Kentucky's MSA Payment Allocations: 

Program area: Economic development for tobacco regions; 
Fiscal year 2004 allocation: $43,434,000; 
Fiscal year 2005 expected allocation: $48,283,400; 
Examples of programs receiving or expected to receive allocations: 
Governor's Office for Agricultural Policy, Conservation, Environmental 
Stewardship. 

Program area: Education; 
Fiscal year 2004 allocation: $5,961,700; 
Fiscal year 2005 expected allocation: $10,952,500; 
Examples of programs receiving or expected to receive allocations: 
Families and Children--Childhood Development Program, Governor's Office 
of Early Childhood--Development Program, Kentucky's Higher Education 
Assistance Authority--Early Childhood Scholarship Program. 

Program area: General purposes; 
Fiscal year 2004 allocation: $382,959; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Directed to the General Fund. 

Program area: Health; 
Fiscal year 2004 allocation: $43,624,200; 
Fiscal year 2005 expected allocation: $38,500,700; 
Examples of programs receiving or expected to receive allocations: 
Public Health-- Health Access Nurturing Development Services, Folic 
Acid Distribution, Healthy Start, Universal Children's Immunization; 
Child advocacy centers; Early Childhood Mental and Oral Health; Mental 
Health- Substance Abuse Services to Medicaid Eligible Women with 
Dependent Children; Children with Special Health Care Needs-Universal 
Newborn Hearing Testing and Vision Screening, Council on Postsecondary 
Education--Lung Cancer Research Program; Insurance--Kentucky Access 
(High Risk Individual Insurance Pool);Testing and Vision Screening-- 
First Steps Early Intervention Program. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $11,116,000; 
Fiscal year 2005 expected allocation: $6,116,600; 
Examples of programs receiving or expected to receive allocations: Debt 
service-- Kentucky Infrastructure Authority--Water Resource 
Development. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $4,964,100; 
Fiscal year 2005 expected allocation: $4,946,800; 
Examples of programs receiving or expected to receive allocations: 
Public Health-- Smoking cessation; 
Governor's Office--Kentucky Agency for Substance Abuse Policy--Smoking 
Cessation. 

Total; 
Fiscal year 2004 allocation: $109,482,959; 
Fiscal year 2005 expected allocation: $108,800,000. 

Source: Kentucky Governor's Office for Policy Research. 

[End of table]

Louisiana: 

Louisiana reported receiving $141,621,328 from MSA payments in fiscal 
year 2004 and expects to receive $145,362,442 in fiscal year 2005. 

Table 22: Louisiana's MSA Payment Allocations: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $84,972,800; 
Fiscal year 2005 expected allocation: $87,217,465. 

Program area: General purposes; 
Fiscal year 2004 allocation: $341,260; 
Fiscal year 2005 expected allocation: $350,000; 
Examples of programs receiving or expected to receive allocations: 
Attorney General's Office for enforcement. 

Program area: Health; 
Fiscal year 2004 allocation: $11,831,735; 
Fiscal year 2005 expected allocation: $13,686,244; 
Examples of programs receiving or expected to receive allocations: 
School-based health care centers (OPH), Medicaid, Board of Regents and 
health care science grants. 

Program area: Social services; 
Fiscal year 2004 allocation: $1,489,137; 
Fiscal year 2005 expected allocation:; 
Examples of programs receiving or expected to receive allocations: 
Starting points preschool programs. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $500,000; 
Fiscal year 2005 expected allocation: $500,000; 
Examples of programs receiving or expected to receive allocations: 
Smoking prevention and cessation grants. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $42,486,396; 
Fiscal year 2005 expected allocation: $43,608,733. 

Total; 
Fiscal year 2004 allocation: $141,621,328; 
Fiscal year 2005 expected allocation: $145,362,442. 

Source: Louisiana Division of Administration, Office of Planning and 
Budget. 

[End of table]

Maine: 

Maine reported receiving $48,952,964 from MSA payments in fiscal year 
2004 and expects to receive $48,772,127 in fiscal year 2005. 

Table 23: Maine's MSA Payment Allocations: 

Program area: Budget shortfalls; 
Fiscal year 2004 allocation: $6,656,040; 
Fiscal year 2005 expected allocation: $0. 

Program area: Education; 
Fiscal year 2004 allocation: $10,166,959; 
Fiscal year 2005 expected allocation: $11,069,704; 
Examples of programs receiving or expected to receive allocations: 
Child care and development initiatives, after-school services and Head 
Start. 

Program area: General purposes; 
Fiscal year 2004 allocation: $60,089; 
Fiscal year 2005 expected allocation: $58,281; 
Examples of programs receiving or expected to receive allocations: 
Attorney General enforcement and administrative costs. 

Program area: Health; 
Fiscal year 2004 allocation: $19,425,389; 
Fiscal year 2005 expected allocation: $19,214,049; 
Examples of programs receiving or expected to receive allocations: 
Prescription drugs, Medicaid and other health initiatives. 

Program area: Social services; 
Fiscal year 2004 allocation: $5,808,184; 
Fiscal year 2005 expected allocation: $5,765,892; 
Examples of programs receiving or expected to receive allocations: 
Substance abuse prevention, intervention, testing and treatment. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $14,579,102; 
Fiscal year 2005 expected allocation: $15,120,903; 
Examples of programs receiving or expected to receive allocations: 
Community/school grants and statewide coordination to reduce tobacco 
addiction and use; 
tobacco prevention, control, and treatment. 

Total; 
Fiscal year 2004 allocation: $56,695,763[A]; 
Fiscal year 2005 expected allocation: $51,228,829[A]. 

Source: Maine Department of Administrative and Financial Services, 
Bureau of the Budget. 

[A] Amounts include carry-over funds and/or interest earned. 

[End of table]

Maryland: 

Maryland reported receiving $149,942,000 from MSA payments in fiscal 
year 2004 and expects to receive $142,607,000 in fiscal year 2005. 

Table 24: Maryland's MSA Payment Allocations: 

Program area: Education; 
Fiscal year 2004 allocation: $3,000,000; 
Fiscal year 2005 expected allocation: $3,000,000; 
Examples of programs receiving or expected to receive allocations: 
Textbooks for nonpublic schools. 

Program area: General purposes; 
Fiscal year 2004 allocation: $30,000,000; 
Fiscal year 2005 expected allocation: $30,170,000; 
Examples of programs receiving or expected to receive allocations: 
Legal fees and settlement with outside counsel. 

Program area: Health; 
Fiscal year 2004 allocation: $152,889,000; 
Fiscal year 2005 expected allocation: $98,268,000; 
Examples of programs receiving or expected to receive allocations: 
Cancer, heart, and lung screenings and treatments; 
Maryland Health Care Foundation; 
Medicaid; 
management. 

Program area: Payments to tobacco growers; 
Fiscal year 2004 allocation: $5,100,000; 
Fiscal year 2005 expected allocation: $5,653,000; 
Examples of programs receiving or expected to receive allocations: Tri- 
County Council of Southern Maryland (buyout payments to farmers). 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $13,798,000; 
Fiscal year 2005 expected allocation: $9,484,000; 
Examples of programs receiving or expected to receive allocations: 
Tobacco use prevention and cessation programs. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $10,360,000; 
Fiscal year 2005 expected allocation: $6,391,000. 

Total; 
Fiscal year 2004 allocation: $215,147,000[A]; 
Fiscal year 2005 expected allocation: $152,966,000[A]. 

Source: Maryland Department of Budget and Management. 

[A] Amounts include carry-over funds and interest earned. 

[End of table]

Massachusetts: 

Massachusetts reported receiving $253,621,276 from MSA payments in 
fiscal year 2004 and expects to receive $253,600,000 in fiscal year 
2005. 

Table 25: Massachusetts's MSA Payment Allocation: 

Program area: General purposes; 
Fiscal year 2004 allocation: $253,943,730; 
Fiscal year 2005 expected allocation: $253,600,000; 
Examples of programs receiving or expected to receive allocations: All 
MSA revenues deposited in the Commonwealth's General Fund in fiscal 
years 2004 and 2005. 

Total; 
Fiscal year 2004 allocation: $253,943,730[A]; 
Fiscal year 2005 expected allocation: $253,600,000. 

Source: Massachusetts Executive Office of Administration and Finance, 
Fiscal Affairs Division. 

[A] Amount includes interest earned. 

[End of table]

Michigan: 

Michigan reported receiving $270,540,221 from MSA payments in fiscal 
year 2004 and expects to receive $285,700,000 in fiscal year 2005. 

Table 26: Michigan's MSA Payment Allocations: 

Program area: Budget shortfalls; 
Fiscal year 2004 allocation: $64,000,000; 
Fiscal year 2005 expected allocation: $7,000,000. 

Program area: Education; 
Fiscal year 2004 allocation: $104,900,000; 
Fiscal year 2005 expected allocation: $102,200,000; 
Examples of programs receiving or expected to receive allocations: 
Scholarships and tuition incentive grants for higher education 
students, testing for K- 12 students, Michigan Education Savings Plan, 
nursing scholarships, general higher education support. 

Program area: General purposes; 
Fiscal year 2004 allocation: $400,000; 
Fiscal year 2005 expected allocation: $400,000; 
Examples of programs receiving or expected to receive allocations: 
Attorney General administrative expenses. 

Program area: Health; 
Fiscal year 2004 allocation: $107,700,000; 
Fiscal year 2005 expected allocation: $186,800,000; 
Examples of programs receiving or expected to receive allocations: 
Elder pharmaceutical assistance, Medicaid personal needs allowance, 
respite care, Medicaid support, biomedical research and development. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $9,200,000; 
Fiscal year 2005 expected allocation: $500,000. 

Total; 
Fiscal year 2004 allocation: $286,200,000[A]; 
Fiscal year 2005 expected allocation: $296,900,000[A]. 

Source: Michigan Office of Health and Human Services, State Budget 
Office. 

[A] Amounts include carry-over funds and interest earned. 

[End of table]

Missouri: 

Missouri reported receiving $142,829,966 from MSA payments in fiscal 
year 2004 and expects to receive $144,000,000 in fiscal year 2005. 

Table 27: Missouri's MSA Payment Allocations: 

Program area: Budget shortfalls; 
Fiscal year 2004 allocation: $70,715,848; 
Fiscal year 2005 expected allocation: $70,772,048. 

Program area: General purposes; 
Fiscal year 2004 allocation: $4,426,858; 
Fiscal year 2005 expected allocation: $2,427,411; 
Examples of programs receiving or expected to receive allocations: 
Transferred to state general revenue fund to support any state program 
funded from general revenue, such as education, Medicaid and 
corrections. 

Program area: Health; 
Fiscal year 2004 allocation: $69,726,564; 
Fiscal year 2005 expected allocation: $70,369,652; 
Examples of programs receiving or expected to receive allocations: 
Payments to Medicaid providers and grants to hospitals for graduate 
medical education, prescription drug assistance for low-income seniors 
through the Missouri Senior Rx Program. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $472,829; 
Fiscal year 2005 expected allocation: $482,414; 
Examples of programs receiving or expected to receive allocations: 
Enforcement of the state's laws on underage tobacco use. 

Total; 
Fiscal year 2004 allocation: $145,342,099[A]; 
Fiscal year 2005 expected allocation: $144,051,525[A]. 

Source: Missouri Division of Budget and Planning. 

[A] Amounts include carry-over funds. 

[End of table]

Montana: 

Montana reported receiving $26,672,073 from MSA payments in fiscal year 
2004 and expects to receive $26,223,000 in fiscal year 2005. 

Table 28: Montana's MSA Payment Allocations: 

Program area: General purposes; 
Fiscal year 2004 allocation: $2,933,928; 
Fiscal year 2005 expected allocation: $2,884,530; 
Examples of programs receiving or expected to receive allocations: 
General fund transfer. 

Program area: Health; 
Fiscal year 2004 allocation: $18,250,852; 
Fiscal year 2005 expected allocation: $18,601,209; 
Examples of programs receiving or expected to receive allocations: 
State Children's Health Insurance Program, Medicaid, Mental health 
services, hospice and home health and Tobacco Trust Fund. 

Program area: Social services; 
Fiscal year 2004 allocation: $2,149,579; 
Fiscal year 2005 expected allocation: $2,589,726; 
Examples of programs receiving or expected to receive allocations: 
Childcare, child support enforcement, infant mortality abatement, 
poison control, AIDS prevention, independent living and extended 
employment. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $2,514,645; 
Fiscal year 2005 expected allocation: $2,970,604; 
Examples of programs receiving or expected to receive allocations: 
Tobacco prevention. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $823,069; 
Fiscal year 2005 expected allocation: $0. 

Total; 
Fiscal year 2004 allocation: $26,672,073; 
Fiscal year 2005 expected allocation: $27,046,069[A]. 

Source: Montana Office of Budget and Planning. 

[A] Amount includes carry-over funds. 

[End of table]

Nebraska: 

Nebraska reported receiving $37,858,162 from MSA payments in fiscal 
year 2004 and expects to receive $35,600,000 in fiscal year 2005. 

Table 29: Nebraska's MSA Payment Allocations: 

Program area: General purposes; 
Fiscal year 2004 allocation: $88,437; 
Fiscal year 2005 expected allocation: $86,595; 
Examples of programs receiving or expected to receive allocations: MSA 
model statute enforcement. 

Program area: Health; 
Fiscal year 2004 allocation: $21,006,570; 
Fiscal year 2005 expected allocation: $20,333,933; 
Examples of programs receiving or expected to receive allocations: 
Behavioral health, public health, minority health, State Children's 
Health Insurance Program, biomedical research. 

Program area: Social services; 
Fiscal year 2004 allocation: $2,788,800; 
Fiscal year 2005 expected allocation: $2,730,700; 
Examples of programs receiving or expected to receive allocations: 
Community-based developmental disability services, respite care 
assistance. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $13,974,355; 
Fiscal year 2005 expected allocation: $12,448,772. 

Total; 
Fiscal year 2004 allocation: $37,858,162; 
Fiscal year 2005 expected allocation: $35,600,000. 

Source: Nebraska Department of Administrative Services, Budget 
Division. 

[End of table]

Nevada: 

Nevada reported receiving $38,299,907 from MSA payments in fiscal year 
2004 and expects to receive $38,666,164 in fiscal year 2005. 

Table 30: Nevada's MSA Payment Allocations: 

Program area: Education; 
Fiscal year 2004 allocation: $29,254,375; 
Fiscal year 2005 expected allocation: $32,966,914; 
Examples of programs receiving or expected to receive allocations: 
Scholarship program for Nevada students who attend a Nevada higher 
education institution. 

Program area: General purposes; 
Fiscal year 2004 allocation: $257,412; 
Fiscal year 2005 expected allocation: $260,971; 
Examples of programs receiving or expected to receive allocations: 
Attorney General's tobacco retail enforcement and master settlement 
legal expenses. 

Program area: Health; 
Fiscal year 2004 allocation: $14,166,437; 
Fiscal year 2005 expected allocation: $12,986,804; 
Examples of programs receiving or expected to receive allocations: 
Grants to improve health services for children and persons with 
disabilities, prescription drugs and pharmaceutical services for low-
income seniors, and an endowment fund that expends interest earnings to 
provide grants for the promotion of public health. 

Program area: Social services; 
Fiscal year 2004 allocation: $8,948,725; 
Fiscal year 2005 expected allocation: $7,437,291; 
Examples of programs receiving or expected to receive allocations: 
Grants to assist senior citizens to live independently, support senior 
services, and a homemaker program. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $5,013,173; 
Fiscal year 2005 expected allocation: $4,679,439; 
Examples of programs receiving or expected to receive allocations: 
Grants for tobacco cessation programs. 

Total; 
Fiscal year 2004 allocation: $57,640,122[A]; 
Fiscal year 2005 expected allocation: $58,331,419[A]. 

Source: Nevada Budget Office. 

[A] Amounts include carry-over funds. 

[End of table]

New Hampshire: 

New Hampshire reported receiving $41,800,000 from MSA payments in 
fiscal year 2004 and expects to receive $39,600,000 in fiscal year 
2005. 

Table 31: New Hampshire's MSA Payment Allocations: 

Program area: Education; 
Fiscal year 2004 allocation: $40,000,000; 
Fiscal year 2005 expected allocation: $39,600,000; 
Examples of programs receiving or expected to receive allocations: K-12 
adequate grants to schools. 

Program area: General purposes; 
Fiscal year 2004 allocation: $1,800,000; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: No 
specific programs. 

Total; 
Fiscal year 2004 allocation: $41,800,000; 
Fiscal year 2005 expected allocation: $39,600,000. 

Source: New Hampshire Office of Legislative Budget Assistant. 

[End of table]

New Jersey: 

New Jersey reported receiving $242,800,000 from MSA payments in fiscal 
year 2004 and expects to receive $245,100,000 in fiscal year 2005. 

Table 32: New Jersey's Allocations of MSA Payments and Securitized 
proceeds: 

Program area: Budget shortfalls; 
Fiscal year 2004 allocation: $873,300,000; 
Fiscal year 2005 expected allocation: $0. 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $120,200,000; 
Fiscal year 2005 expected allocation: $245,100,000. 

Program area: Health; 
Fiscal year 2004 allocation: $122,600,000; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Family Care, new and expanded community options for seniors, expansion 
of cancer initiative, Senior Gold Pharmaceutical Assistance. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $608,000,000; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Institutional, transportation and other projects. 

Total; 
Fiscal year 2004 allocation: $1,724,100,000[A]; 
Fiscal year 2005 expected allocation: $245,100,000. 

Source: New Jersey Office of Management and Budget. 

[A] Amount includes some securitized proceeds received in fiscal year 
2003. 

[End of table]

New Mexico: 

New Mexico reported receiving $37,449,345 from MSA payments in fiscal 
year 2004 and expects to receive $34,779,246 in fiscal year 2005. 

Table 33: New Mexico's MSA Payment Allocations: 

Program area: Education; 
Fiscal year 2004 allocation: $800,000; 
Fiscal year 2005 expected allocation: $800,000; 
Examples of programs receiving or expected to receive allocations: 
Education in trauma, critical, and emergency care and pediatrics. 

Program area: General purposes; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $12,644,246; 
Examples of programs receiving or expected to receive allocations: 
Balances after appropriations to education and health are deposited 
into the General Fund. 

Program area: Health; 
Fiscal year 2004 allocation: $36,649,345; 
Fiscal year 2005 expected allocation: $21,335,000; 
Examples of programs receiving or expected to receive allocations: 
Tobacco cessation and prevention, diabetes and HIV services and 
medication, breast and cervical cancer treatment, preventing and 
treating tobacco- related illnesses, poison control, telemedicine, 
expanded lung and illness research, Medicaid. 

Total; 
Fiscal year 2004 allocation: $37,449,345; 
Fiscal year 2005 expected allocation: $34,779,246. 

Source: New Mexico Department of Finance and Administration. 

[End of table]

New York: 

New York reported receiving $349,494,266 from MSA payments in fiscal 
year 2004 and expects to receive $406,007,613 in fiscal year 2005. In 
addition, New York reported receiving $4,200,000,000 in securitized 
proceeds in fiscal year 2004 and expects to receive no securitized 
proceeds in fiscal year 2005. 

Table 34: New York's Allocation of MSA Payments and Securitized 
proceeds: 

Program area: Budget shortfalls; 
Fiscal year 2004 allocation: $3,800,000,000; 
Fiscal year 2005 expected allocation: $582,034,000. 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $223,973,217. 

Program area: Health; 
Fiscal year 2004 allocation: $322,016,427; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Medicaid, indigent care, elderly pharmaceutical program, Family Health 
Plus, health insurance for the uninsured, breast and cervical cancer 
treatment and similar programs. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $30,000,000; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Tobacco control and prevention activities. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $400,000,000; 
Fiscal year 2005 expected allocation: $0. 

Total; 
Fiscal year 2004 allocation: $4,552,016,427; 
Fiscal year 2005 expected allocation: $806,007,217[A]. 

Source: New York State Division of the Budget. 

[A] Amount includes some securitized proceeds received in fiscal year 
2004. 

Note: These MSA payments include only the payments made to the state, 
which amount to about 51 percent of the annual payments made by the 
tobacco companies to New York. New York City and counties in the state 
receive the other 49 percent of the annual MSA payments to New York. 

[End of table]

North Carolina: 

North Carolina reported receiving $150,507,204 from MSA payments in 
fiscal year 2004 and expects to receive $163,353,241 in fiscal year 
2005. 

Table 35: North Carolina's MSA Payment Allocations: 

Program area: Economic development for tobacco regions; 
Fiscal year 2004 allocation: $75,733,669; 
Fiscal year 2005 expected allocation: $86,569,690; 
Examples of programs receiving or expected to receive allocations: 
Tobacco Trust Fund (Golden Leaf). 

Program area: General purposes; 
Fiscal year 2004 allocation: $63,046,734; 
Fiscal year 2005 expected allocation: $60,000,000. 

Program area: Health; 
Fiscal year 2004 allocation: $1,926,801; 
Fiscal year 2005 expected allocation: $4,193,069; 
Examples of programs receiving or expected to receive allocations: 
Health and Wellness Trust Fund (medication assistance and childhood 
obesity prevention). 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $1,890,482. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $10,700,000; 
Fiscal year 2005 expected allocation: $10,700,000; 
Examples of programs receiving or expected to receive allocations: 
Statewide and community-based teen tobacco use prevention and 
cessation. 

Total; 
Fiscal year 2004 allocation: $151,407,204[A]; 
Fiscal year 2005 expected allocation: $163,353,241. 

Source: North Carolina Office of State Budget and Management. 

[A] Amount includes carry-over funds. 

[End of table]

North Dakota: 

North Dakota reported receiving $23,289,073 from MSA payments in fiscal 
year 2004 and expects to receive $22,972,067 in fiscal year 2005. 

Table 36: North Dakota's MSA Payment Allocations: 

Program area: Education; 
Fiscal year 2004 allocation: $10,480,083; 
Fiscal year 2005 expected allocation: $10,337,430; 
Examples of programs receiving or expected to receive allocations: 
Forty-five percent of the MSA funds are deposited in the common schools 
trust fund and interest earned on the fund is used for K-12 education. 

Program area: Health; 
Fiscal year 2004 allocation: $482,000; 
Fiscal year 2005 expected allocation: $482,000; 
Examples of programs receiving or expected to receive allocations: 
Dental loan repayment program, breast and cervical cancer screening. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $10,480,083; 
Fiscal year 2005 expected allocation: $10,337,430; 
Examples of programs receiving or expected to receive allocations: 
Water projects. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $1,846,907; 
Fiscal year 2005 expected allocation: $1,815,207; 
Examples of programs receiving or expected to receive allocations: 
Tobacco cessation programs. 

Total; 
Fiscal year 2004 allocation: $23,289,073; 
Fiscal year 2005 expected allocation: $22,972,067. 

Source: North Dakota Office of Management and Budget, Fiscal Management 
Division. 

[End of table]

Ohio: 

Ohio reported receiving $320,531,457 from MSA payments in fiscal year 
2004 and expects to receive $290,886,750 in fiscal year 2005. 

Table 37: Ohio's MSA Payment Allocations: 

Program area: Budget shortfalls; 
Fiscal year 2004 allocation: $234,678,219; 
Fiscal year 2005 expected allocation: $0. 

Program area: Economic development for tobacco regions; 
Fiscal year 2004 allocation: $15,144,938; 
Fiscal year 2005 expected allocation: $12,600,000; 
Examples of programs receiving or expected to receive allocations: 
Grants to make capital improvements in marketable industrial sites. 

Program area: Education; 
Fiscal year 2004 allocation: $7,553,152; 
Fiscal year 2005 expected allocation: $6,274,109; 
Examples of programs receiving or expected to receive allocations: 
Technology enhancements in schools. 

Program area: General purposes; 
Fiscal year 2004 allocation: $786,109; 
Fiscal year 2005 expected allocation: $801,831; 
Examples of programs receiving or expected to receive allocations: 
Administration, oversight, enforcement activities related to the MSA. 

Program area: Health; 
Fiscal year 2004 allocation: $37,237,451; 
Fiscal year 2005 expected allocation: $34,681,892; 
Examples of programs receiving or expected to receive allocations: 
Minority health programs, alcohol and drug abuse prevention and 
biomedical tech transfer. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $5,000,000; 
Fiscal year 2005 expected allocation: $126,389,326; 
Examples of programs receiving or expected to receive allocations: 
School construction. 

Program area: Social services; 
Fiscal year 2004 allocation: $3,852,400; 
Fiscal year 2005 expected allocation: $3,855,051; 
Examples of programs receiving or expected to receive allocations: 
Funding for uncompensated health care of uninsured. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $17,487,294; 
Fiscal year 2005 expected allocation: $108,136,000; 
Examples of programs receiving or expected to receive allocations: 
Under-age tobacco use enforcement and tobacco use prevention and 
cessation programs. 

Total; 
Fiscal year 2004 allocation: $321,739,563[A]; 
Fiscal year 2005 expected allocation: $292,738,209[A]. 

Source: Ohio Office of Budget and Management. 

[A] Amounts include carry-over funds and interest earned. 

[End of table]

Oklahoma: 

Oklahoma reported receiving $65,062,578 from MSA payments in fiscal 
year 2004 and expects to receive $49,783,729 in fiscal year 2005. 

Table 38: Oklahoma's MSA Payment Allocations: 

Program area: General purposes; 
Fiscal year 2004 allocation: $1,411,918; 
Fiscal year 2005 expected allocation: $1,016,000; 
Examples of programs receiving or expected to receive allocations: 
Attorney General's Evidence Fund. 

Program area: Health; 
Fiscal year 2004 allocation: $30,964,800; 
Fiscal year 2005 expected allocation: $34,613,717; 
Examples of programs receiving or expected to receive allocations: 
Medicaid and deposit to Tobacco Settlement Endowment Trust Fund on 
behalf of health programs. 

Program area: Social services; 
Fiscal year 2004 allocation: $15,610,837; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Child welfare, foster care, services for homebound elders and senior 
nutrition. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $17,075,023; 
Fiscal year 2005 expected allocation: $14,154,012; 
Examples of programs receiving or expected to receive allocations: 
Deposit to the Tobacco Settlement Endowment Trust Fund on behalf of 
tobacco control programs. 

Total; 
Fiscal year 2004 allocation: $65,062,578; 
Fiscal year 2005 expected allocation: $49,783,729. 

Source: Oklahoma Office of State Finance. 

[End of table]

Oregon: 

Oregon reported receiving $72,065,376 from MSA payments in fiscal year 
2004 and expects to receive $73,555,259 in fiscal year 2005. In 
addition, Oregon reported receiving $109,565,000 in securitized 
proceeds in fiscal year 2004 and expects to receive no securitized 
proceeds in fiscal year 2005. 

Table 39: Oregon's Allocations of MSA Payments and Securitized 
proceeds: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $7,603,713; 
Fiscal year 2005 expected allocation: $43,860,304. 

Program area: Health; 
Fiscal year 2004 allocation: $14,608,216; 
Fiscal year 2005 expected allocation: $27,600,000; 
Examples of programs receiving or expected to receive allocations: 
Oregon health plan/family health insurance assistance program. 

Program area: Infrastructure; 
Fiscal year 2004 allocation: $109,565,000; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Capital projects at Oregon Health and Sciences University--a state 
teaching hospital. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $700,000; 
Examples of programs receiving or expected to receive allocations: 
Tobacco enforcement and prevention services. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $49,853,447; 
Fiscal year 2005 expected allocation: $51,248,402. 

Total; 
Fiscal year 2004 allocation: $181,630,376; 
Fiscal year 2005 expected allocation: $123,408,706[A]. 

Source: Oregon Department of Administrative Services. 

[A] Amount includes carry-over funds. 

[End of table]

Pennsylvania: 

Pennsylvania reported receiving $370,856,755 from MSA payments in 
fiscal year 2004 and expects to receive $357,566,328 in fiscal year 
2005. 

Table 40: Pennsylvania's MSA Payment Allocation: 

Program area: Health; 
Fiscal year 2004 allocation: $416,818,000; 
Fiscal year 2005 expected allocation: $370,857,000; 
Examples of programs receiving or expected to receive allocations: 
Smoking prevention and cessation; 
home and community-based care; 
venture capital for medical equipment, support for the uninsured; 
and catastrophic and uncompensated care. 

Total; 
Fiscal year 2004 allocation: $416,818,000[A]; 
Fiscal year 2005 expected allocation: $370,857,000[A]. 

Source: Pennsylvania Governor's Office of the Budget. 

[A] Amounts include carry-over funds and interest earned. 

[End of table]

Rhode Island: 

Rhode Island reported receiving $45,142,523 from MSA payments in fiscal 
year 2004 and expects to receive $47,381,000 in fiscal year 2005. In 
addition, Rhode Island reported receiving $1,621,487 in securitized 
proceeds in fiscal year 2004 and expects to receive no securitized 
proceeds in fiscal year 2005. 

Table 41: Rhode Island's Allocations of MSA Payments and Securitized 
proceeds: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $44,688,862; 
Fiscal year 2005 expected allocation: $47,381,000. 

Program area: General purposes; 
Fiscal year 2004 allocation: $2,075,148; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: Any 
program that receives general fund support. 

Total; 
Fiscal year 2004 allocation: $46,764,010; 
Fiscal year 2005 expected allocation: $47,381,000. 

Source: State of Rhode Island Budget Office. 

[End of table]

South Carolina: 

South Carolina reported receiving $73,124,607 from MSA payments in 
fiscal year 2004 and expects to receive $75,582,954 in fiscal year 
2005. 

Table 42: South Carolina's MSA Payment Allocation: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $73,124,607; 
Fiscal year 2005 expected allocation: $75,582,954. 

Total; 
Fiscal year 2004 allocation: $73,124,607; 
Fiscal year 2005 expected allocation: $75,582,954. 

Source: South Carolina Office of State Budget. 

[End of table]

South Dakota: 

South Dakota reported receiving $21,911,498 from MSA payments in fiscal 
year 2004 and expects to receive $23,063,730 in fiscal year 2005. 

Table 43: South Dakota's MSA Payment Allocations: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $21,911,948; 
Fiscal year 2005 expected allocation: $23,063,730. 

Program area: Education; 
Fiscal year 2004 allocation: $14,161,048; 
Fiscal year 2005 expected allocation: $13,572,737; 
Examples of programs receiving or expected to receive allocations: 
State aid to general education, special education, supplemental K-12 
allocation, technology in schools, SD Opportunity scholarship, post-
secondary vocational education. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $750,000. 

Total; 
Fiscal year 2004 allocation: $36,072,996[A]; 
Fiscal year 2005 expected allocation: $37,386,467[A]. 

Source: South Dakota Bureau of Finance and Management. 

[A] Amounts include interest earned. 

[End of table]

Tennessee: 

Tennessee reported receiving $153,272,096 from MSA payments in fiscal 
year 2004 and expects to receive $147,800,000 in fiscal year 2005. 

Table 44: Tennessee's MSA Payment Allocation: 

Program area: General purposes; 
Fiscal year 2004 allocation: $153,272,096; 
Fiscal year 2005 expected allocation: $147,800,000; 
Examples of programs receiving or expected to receive allocations: 
Allocated to the General Fund; 
not earmarked. 

Total; 
Fiscal year 2004 allocation: $153,272,096; 
Fiscal year 2005 expected allocation: $147,800,000. 

Source: Tennessee Department of Finance and Administration. 

[End of table]

Utah: 

Utah reported receiving $27,936,000 from MSA payments in fiscal year 
2004 and expects to receive $26,951,100 in fiscal year 2005. 

Table 45: Utah's MSA Payment Allocations: 

Program area: Budget shortfalls; 
Fiscal year 2004 allocation: $9,821,500; 
Fiscal year 2005 expected allocation: $0. 

Program area: General purposes; 
Fiscal year 2004 allocation: $100,000; 
Fiscal year 2005 expected allocation: $100,000; 
Examples of programs receiving or expected to receive allocations: 
Attorney General's office. 

Program area: Health; 
Fiscal year 2004 allocation: $13,002,800; 
Fiscal year 2005 expected allocation: $13,002,800; 
Examples of programs receiving or expected to receive allocations: 
State Children's Health Insurance Program, cancer research, 
immunizations, health promotion. 

Program area: Reserves/Rainy day funds; 
Fiscal year 2004 allocation: $5,587,200; 
Fiscal year 2005 expected allocation: $8,085,300; 
Examples of programs receiving or expected to receive allocations: 
Tobacco Permanent Trust Fund--an endowment that allows the Legislature 
to allocate the interest to fund programs. 

Program area: Social services; 
Fiscal year 2004 allocation: $2,000,000; 
Fiscal year 2005 expected allocation: $2,000,000; 
Examples of programs receiving or expected to receive allocations: Drug 
courts, drug board pilot program. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $4,057,900; 
Fiscal year 2005 expected allocation: $4,076,000; 
Examples of programs receiving or expected to receive allocations: 
Tobacco Quit line, TV campaign and prevention partnerships. 

Total; 
Fiscal year 2004 allocation: $34,569,400[A]; 
Fiscal year 2005 expected allocation: $27,264,100[A]. 

Source: Utah Governor's Office of Planning and Budget. 

[A] Amounts include carry-over funds. 

[End of table]

Vermont: 

Vermont reported receiving $25,819,716 from MSA payments in fiscal year 
2004 and expects to receive $24,700,000 in fiscal year 2005. 

Table 46: Vermont's MSA Payment Allocations: 

Program area: General purposes; 
Fiscal year 2004 allocation: $388,000; 
Fiscal year 2005 expected allocation: $388,000; 
Examples of programs receiving or expected to receive allocations: 
Attorney General, Tax Department, Drug Court. 

Program area: Health; 
Fiscal year 2004 allocation: $17,250,000; 
Fiscal year 2005 expected allocation: $17,250,000; 
Examples of programs receiving or expected to receive allocations: 
Medicaid state match. 

Program area: Social services; 
Fiscal year 2004 allocation: $2,885,266; 
Fiscal year 2005 expected allocation: $4,522,111; 
Examples of programs receiving or expected to receive allocations: 
Alcohol and drug programs; 
safe housing (domestic violence). 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $4,120,177; 
Fiscal year 2005 expected allocation: $4,756,157; 
Examples of programs receiving or expected to receive allocations: 
School and public education programs. 

Total; 
Fiscal year 2004 allocation: $24,643,443[A]; 
Fiscal year 2005 expected allocation: $26,916,268[A]. 

Source: Vermont Department of Finance and Management. 

[A] Amounts include carry-over funds. 

[End of table]

Virginia: 

Virginia reported receiving $128,396,522 from MSA payments in fiscal 
year 2004 and expects to receive $123,256,595 in fiscal year 2005. 

Table 47: Virginia's MSA Payment Allocations: 

Program area: Economic development for tobacco regions; 
Fiscal year 2004 allocation: $44,776,339; 
Fiscal year 2005 expected allocation: $43,094,800; 
Examples of programs receiving or expected to receive allocations: 
Economic development projects, infrastructure, education, job training, 
research and administration of the Tobacco Indemnification and 
Community Revitalization Commission. 

Program area: General purposes; 
Fiscal year 2004 allocation: $51,358,608; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Deposited to the state general fund and appropriated through the budget 
process. 

Program area: Health; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $47,542,895; 
Examples of programs receiving or expected to receive allocations: 
Deposited to the Virginia Health Care Fund and used to support the 
Medicaid Program. 

Program area: Payments to tobacco growers; 
Fiscal year 2004 allocation: $19,421,923; 
Fiscal year 2005 expected allocation: $20,000,000; 
Examples of programs receiving or expected to receive allocations: 
Indemnification payments to tobacco growers. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $12,839,652; 
Fiscal year 2005 expected allocation: $12,618,900; 
Examples of programs receiving or expected to receive allocations: 
Public education campaigns to discourage tobacco consumption by minors, 
research and the administrative budget of the Virginia Tobacco 
Settlement Foundation. 

Total; 
Fiscal year 2004 allocation: $128,396,522; 
Fiscal year 2005 expected allocation: $123,256,595. 

Source: Virginia Department of Planning and Budget. 

[End of table]

Washington: 

Washington reported receiving $127,635,700 from MSA payments in fiscal 
year 2004 and expects to receive $128,000,000 in fiscal year 2005. 

Table 48: Washington's MSA Payment Allocations: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $37,269,600; 
Fiscal year 2005 expected allocation: $37,376,000. 

Program area: Health; 
Fiscal year 2004 allocation: $90,366,100; 
Fiscal year 2005 expected allocation: $90,624,000; 
Examples of programs receiving or expected to receive allocations: 
Children's Medicaid; 
subsidized health insurance for low-income state residents; 
grants to community clinics; 
grants to local public health jurisdictions; 
statewide public health programs such as childhood immunizations. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $17,500,000; 
Fiscal year 2005 expected allocation: $0; 
Examples of programs receiving or expected to receive allocations: 
Tobacco prevention and cessation programs. 

Total; 
Fiscal year 2004 allocation: $145,135,700[A]; 
Fiscal year 2005 expected allocation: $128,000,000. 

Source: Washington State Office of Financial Management. 

[A] Amount includes carry-over funds. 

[End of table]

West Virginia: 

West Virginia reported receiving $55,663,874 from MSA payments in 
fiscal year 2004 and expects to receive $50,800,000 in fiscal year 
2005. 

Table 49: West Virginia's MSA Payment Allocations: 

Program area: Health; 
Fiscal year 2004 allocation: $21,990,532; 
Fiscal year 2005 expected allocation: $19,549,408; 
Examples of programs receiving or expected to receive allocations: 
Institutional facilities operations. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $5,850,592; 
Fiscal year 2005 expected allocation: $5,850,592; 
Examples of programs receiving or expected to receive allocations: 
Tobacco education program, ABCA Tobacco Retailer Education Program. 

Program area: Unallocated; 
Fiscal year 2004 allocation: $27,822,750; 
Fiscal year 2005 expected allocation: $25,400,000. 

Total; 
Fiscal year 2004 allocation: $55,663,874; 
Fiscal year 2005 expected allocation: $50,800,000. 

Source: West Virginia Department of Revenue, State Budget Office. 

[End of table]

Wisconsin: 

Wisconsin reported receiving $130,110,401 from MSA payments in fiscal 
year 2004 and expects to receive $137,126,872 in fiscal year 2005. 

Table 50: Wisconsin's MSA Payment Allocation: 

Program area: Debt service on securitized funds; 
Fiscal year 2004 allocation: $130,110,401; 
Fiscal year 2005 expected allocation: $137,126,872. 

Total; 
Fiscal year 2004 allocation: $130,110,401; 
Fiscal year 2005 expected allocation: $137,126,872. 

Source: Badger Tobacco Asset Securitization Corporation. 

[End of table]

Wyoming: 

Wyoming reported receiving $15,594,424 from MSA payments in fiscal year 
2004 and expects to receive $15,594,424 in fiscal year 2005. 

Table 51: Wyoming's MSA Payment Allocations: 

Program area: General purposes; 
Fiscal year 2004 allocation: $0; 
Fiscal year 2005 expected allocation: $125,000; 
Examples of programs receiving or expected to receive allocations: 
Attorney General's Office--fees. 

Program area: Health; 
Fiscal year 2004 allocation: $7,305,151; 
Fiscal year 2005 expected allocation: $7,305,151; 
Examples of programs receiving or expected to receive allocations: 
Substance abuse treatment and prevention services. 

Program area: Social services; 
Fiscal year 2004 allocation: $4,056,823; 
Fiscal year 2005 expected allocation: $3,931,823; 
Examples of programs receiving or expected to receive allocations: 
Adolescence services and drug court. 

Program area: Tobacco control; 
Fiscal year 2004 allocation: $4,232,450; 
Fiscal year 2005 expected allocation: $4,232,450; 
Examples of programs receiving or expected to receive allocations: 
Tobacco prevention, regional prenatal programs, community tobacco 
prevention activities and tobacco cessation. 

Total; 
Fiscal year 2004 allocation: $15,594,424; 
Fiscal year 2005 expected allocation: $15,594,424. 

Source: Wyoming Department of Health, Substance Abuse Division. 

[End of table]

[End of section]

Appendix V: GAO Survey on States' Allocations of Fiscal Years 2004 and 
2005 Master Settlement Agreement Payments: 

[See PDF for image]

[End of figure]

[End of section]

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Robert A. Robinson, 202-512-3841: 

Staff Acknowledgments: 

Charles M. Adams, Kim Chaffer, Lawrence J. Dyckman, Alan R. Kasdan, 
Stuart Kaufman, Karen K. Keegan, Julio A. Luna, Rosellen McCarthy, Judy 
Pagano, and Stuart Ryba: 

(360497): 

FOOTNOTES

[1] Under these agreements, tobacco companies will pay these 4 states 
$40 billion over 25 years. 

[2] This company was previously known as Philip Morris Incorporated. 

[3] Several other tobacco companies have joined the MSA since the 
agreement was signed. 

[4] For additional information on the agreement, refer to our June 2001 
report on the MSA (Tobacco Settlement: States' Use of Master Settlement 
Agreement Payments, GAO-01-851 (Washington, D.C.: June 29, 2001). 

[5] The $206 billion includes $204.5 billion in estimated total 
payments to the 46 states, the District of Columbia, and the five U.S. 
territories and an additional $1.8 billion for other initiatives agreed 
to in the MSA, including a national foundation dedicated to 
significantly reducing the use of tobacco products by youths and the 
administrative costs of the National Association of Attorneys General. 

[6] While the District of Columbia and the five U.S. territories are 
included in the MSA, this study reports only on the 46 states that 
signed the agreement. 

[7] GAO, Tobacco Settlement: States' Allocations of Phase II Funds, GAO-
03-262R (Washington, D.C.: Dec. 3, 2002); Tobacco Settlement: States' 
Allocations of Fiscal Years 2002 and 2003 Master Settlement Agreement 
Payments, GAO-03-407 (Washington, D.C.: Feb. 28, 2003); and Tobacco 
Settlement: States' Allocations of Fiscal Year 2003 and Expected Fiscal 
Year 2004 Payments, GAO-04-518 (Washington, D.C.: Mar. 19, 2004). 

[8] GAO-01-851. 

[9] Throughout this report, "fiscal year" refers to the state's fiscal 
year. In most states, the fiscal year begins on July 1 and ends on June 
30. The exceptions are in Alabama and Michigan, where the fiscal year 
begins on October 1, and in New York, where the fiscal year begins on 
April 1. 

[10] Our study focuses on the states' share of MSA payments and does 
not include information on MSA payments made to counties and cities in 
New York and California. 

[11] GAO-01-851, GAO-03-407, and GAO-04-518. 

[12] Categories include such areas as education, health, budget 
shortfalls, and debt service on securitized funds. 

[13] The $400 million represents securitized funds that New York 
carried over from fiscal year 2004. The state expects to allocate an 
additional $182 million of its fiscal year 2005 MSA funds to address 
budget shortfalls. 

[14] Fiscal year refers to the state's fiscal year. 

[15] Allocation refers to funds appropriated or otherwise designated 
(e.g., earmarked for a trust fund or an endowment that has a specific 
purpose). It also includes funds designated for debt servicing on bonds 
issued when a state securitized all or a portion of the MSA funds. 

[16] See appendix V for a copy of the survey that we sent to each of 
the 46 states. 

[17] The National Association of Attorneys General monitors the actual 
payments made to states as determined by an independent auditor. 

[18] As we reported in 2001, California counties, four California 
cities, New York counties, and New York City each receive a share of 
MSA payments. 

[19] GAO-01-851, GAO-03-407, and GAO-04-518. 

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