This is the accessible text file for GAO report number GAO-06-502 entitled 'Tobacco Settlement: States' Allocations of Fiscal Year 2005 and Expected Fiscal Year 2006 Payments' which was released on April 11, 2006. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Report to Congressional Requesters: April 2006: Tobacco Settlement: States' Allocations of Fiscal Year 2005 and Expected Fiscal Year 2006 Payments: GAO-06-502: GAO Highlights: Highlights of GAO-06-502, a report to congressional requesters: Why GAO Did This Study: In the 1990’s, states sued major tobacco companies to obtain reimbursement for health impairments caused by the public’s use of tobacco. In 1998, four of the nation’s largest tobacco companies signed a Master Settlement Agreement (MSA) to make annual payments to 46 states in perpetuity as reimbursement for past tobacco-related health care costs. Some states have arranged to receive advance 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, through fiscal year 2006, on how states use MSA payments made by tobacco companies. To conduct this study, GAO surveys the 46 states. This is the fifth and final of a series of reports that provides information on * the payments the 46 states received in fiscal year 2005 and expect to receive in fiscal year 2006 and * states’ allocations of these funds to various program categories and changes from prior years. What GAO Found: The 46 states that are party to the MSA reported receiving about $5.8 billion in fiscal year 2005 and expect to receive about $5.4 billion in fiscal year 2006. Over the previous 5 years, on average, states received $9.3 billion annually. The recent decrease in tobacco settlement funds provided to states has occurred because securitized proceeds—payments states obtained from the sale of bonds backed by future MSA payments—have declined. Proceeds declined because only one state (Virginia) chose to issue a bond and receive proceeds in fiscal year 2005, and the two states (California and New York) with the largest payments issued bonds in prior years. In fiscal year 2006, states reported that all of the tobacco settlement funds they expect to receive will be payments from tobacco companies, and none from securitized proceeds. The MSA allows states to use their tobacco settlement payments for any purpose. States reported that they used the largest portion of the fiscal year 2005 payments and proceeds (32 percent) to fund health- related programs and the next largest portion (24 percent) to fund debt service on securitized proceeds. States expect health programs to account for the same proportion of funds in fiscal year 2006, while they expect debt service to increase to 29 percent. Categories to Which States Allocated the Largest Portions of Tobacco Settlement Payments and Securitized Proceeds (Fiscal Year 2005 and Expected Fiscal Year 2006): [See PDF for image] [End of figure] www.gao.gov/cgi-bin/getrpt?GAO-06-502. To view the full product, including the scope and methodology, click on the link above. For more information, contact Robert A. Robinson at (202) 512-3841 or robinsonr@gao.gov. [End of section] Contents: Letter: Results in Brief: States Received About $5.8 Billion in MSA Payments and Securitized Proceeds in Fiscal Year 2005 and Expect to Receive Somewhat Less in Fiscal Year 2006: States Allocated the Largest Portion of Their Funds to Address Health- Related Programs and Debt Service on Securitized Proceeds in Fiscal Year 2005 and Expect to Do the Same in Fiscal Year 2006: Appendixes: Appendix I: Objectives, Scope, and Methodology: 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 2006: Appendix IV: State-Specific Information on Amounts of MSA Payments and Securitized Proceeds Received and Allocated: Appendix V: GAO Survey on States' Allocations of Fiscal Years 2005 and 2006 MSA Payments: Appendix VI: GAO Contact and Staff Acknowledgments: Tables: Table 1: MSA Payments and Securitized Proceeds States Reported Receiving in Fiscal Year 2005 and Expect to Receive in Fiscal Year 2006: Table 2: MSA Payments and Securitized Proceeds Received by the 46 States Since Fiscal Year 2000: Table 3: Total Amount of Securitized Proceeds Received by States, Fiscal Years 2000-2005: Table 4: Allocation of States' Combined MSA Payments and Securitized Proceeds, Fiscal Year 2005: Table 5: Expected Allocation of States' Combined MSA Payments and Securitized Proceeds, Fiscal Year 2006: Table 6: Allocations of MSA Payments for 46 States: Table 7: Alabama's MSA Payment Allocations: Table 8: Alaska's MSA Payment Allocations: Table 9: Arizona's MSA Payment Allocations: Table 10: Arkansas' MSA Payment Allocations: Table 11: California's MSA Payment Allocations: Table 12: Colorado's MSA Payment Allocations: Table 13: Connecticut's MSA Payment Allocations: Table 14: Delaware's MSA Payment Allocations: Table 15: Georgia's MSA Payment Allocations: Table 16: Hawaii's MSA Payment Allocations: Table 17: Idaho's MSA Payment Allocations: Table 18: Illinois' MSA Payment Allocations: Table 19: Indiana's MSA Payment Allocations: Table 20: Iowa's Allocations of MSA Payments and Securitized Proceeds: Table 21: Kansas' MSA Payment Allocations: Table 22: Kentucky's MSA Payment Allocations: Table 23: Louisiana's MSA Payment Allocations: Table 24: Maine's MSA Payment Allocations: Table 25: Maryland's MSA Payment Allocations: Table 26: Massachusetts' MSA Payment Allocations: Table 27: Michigan's MSA Payment Allocations: Table 28: Missouri's MSA Payment Allocations: Table 29: Montana's MSA Payment Allocations: Table 30: Nebraska's MSA Payment Allocations: Table 31: Nevada's MSA Payment Allocations: Table 32: New Hampshire's MSA Payment Allocations: Table 33: New Jersey's MSA Payment Allocations: Table 34: New Mexico's MSA Payment Allocations: Table 35: New York's Allocations of MSA Payments and Securitized Proceeds: Table 36: North Carolina's MSA Payment Allocations: Table 37: North Dakota's MSA Payment Allocations: Table 38: Ohio's MSA Payment Allocations: Table 39: Oklahoma's MSA Payment Allocations: Table 40: Oregon's MSA Payment Allocations: Table 41: Pennsylvania's MSA Payment Allocations: Table 42: Rhode Island's MSA Payment Allocations: Table 43: South Carolina's MSA Payment Allocations: Table 44: South Dakota's Allocations of MSA Payments and Securitized Proceeds: Table 45: Tennessee's MSA Payment Allocations: Table 46: Utah's MSA Payment Allocations: Table 47: Vermont's MSA Payment Allocations: Table 48: Virginia's Allocations of MSA Payment and Securitized Proceeds: Table 49: Washington's MSA Payment Allocations: Table 50: West Virginia's MSA Payment Allocations: Table 51: Wisconsin's MSA Payment Allocations: Table 52: Wyoming's MSA Payment Allocations: Figure: Figure 1: States' Allocations of Combined MSA Payments and Securitized Proceeds for Fiscal Years 2000 through 2005, and Expected Allocations for Fiscal Year 2006: Abbreviations: MSA: Master Settlement Agreement: Letter April 11, 2006: 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, four 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).[Footnote 4] The MSA commits the tobacco companies to make annual payments to the 46 states and the aforementioned entities in perpetuity as reimbursement for health care costs, such as Medicaid expenditures, related to tobacco use.[Footnote 5] Each state receives a share of the annual MSA payments based on a fixed percentage identified in the MSA. These percentages were negotiated during the settlement and were based, in part, on smoking- related health care costs for each state. The total payment fluctuates annually based on a formula that considers participating manufacturers' annual U.S. shipments of tobacco as compared with those of 1997, as well as other factors such as inflation. The MSA imposed no requirements on how states spend their payments. The Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill) requires GAO to report annually, from fiscal years 2002 through 2006, on how states use MSA payments made by tobacco companies. In addition to these payments, 15 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.[Footnote 6] States can securitize the expected payment stream to receive funds up front rather than over time as MSA payments are made. This report also includes information about states' receipt and allocation of these securitized proceeds.[Footnote 7] This report is the fifth and final in a series of reports responding to the 2002 Farm Bill requirement.[Footnote 8]In addition, we previously reported in June 2001 on states' receipt and use of MSA payments for fiscal years 2000 and 2001.[Footnote 9] This report discusses the (1) amount of payments, including securitized proceeds, received by the 46 states party to the MSA during fiscal year 2005, the amount of payments these states expect to receive in fiscal year 2006, and (2) states' allocation of these funds to various program categories for fiscal year 2005 and expected allocations for fiscal year 2006. 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 2005 and 2006.[Footnote 10],[Footnote 11] We asked the states to categorize their MSA payment allocations for fiscal year 2005 and their expected allocations for fiscal year 2006 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 several steps to assess the reliability of the states' data, including independently corroborating the data to the extent possible. We determined that the data were reliable enough for our purposes. In addition, we compared the data we received for fiscal years 2005 and 2006 with the payment and allocation information we collected from states for our earlier reports.[Footnote 12] We conducted our work from September 2005 through March 2006 in accordance with generally accepted government auditing standards. See appendix I for more information on our scope and methodology and for detailed definitions of the categories used in this report.[Footnote 13] Appendix II shows each state's percentage share of annual MSA payments. Results in Brief: The 46 states party to the MSA expect to receive a total of about $11.3 billion in fiscal years 2005 and 2006, mostly from payments made by tobacco companies. These states reported receiving over $5.8 billion in fiscal year 2005 and expect to receive $5.4 billion in fiscal year 2006. These amounts are substantially less than those of previous years, when total payments and proceeds averaged about $9.3 billion annually. The decreases occurred because only one state, Virginia, chose to issue a bond and receive securitized proceeds ($390 million) in 2005, and none plan to do so in 2006. Since the MSA was signed, 15 of the 46 states securitized all or part of their payments, including the two states (California and New York) with the largest payments, which alone received $6.7 billion in securitized proceeds in 2 prior years. Of the $46.7 billion states reported receiving over the first 5 years, about $31.1 billion were MSA payments from the tobacco companies and about $15.6 billion were securitized proceeds. States allocated the largest portions of their fiscal year 2005 tobacco settlement funds to health-related programs (32 percent) and debt service on securitized proceeds (24 percent). They expect health programs to remain about 32 percent and debt service to increase to 29 percent for fiscal year 2006. These two categories increased substantially from fiscal year 2004, when health-related programs represented 20 percent and debt service was 9 percent. However, while the percentage allocations to some program categories increased in fiscal year 2005, the dollars allocated to these categories decreased because of the nearly $4 billion decrease in securitized proceeds from fiscal year 2004 to 2005. States Received About $5.8 Billion in MSA Payments and Securitized Proceeds in Fiscal Year 2005 and Expect to Receive Somewhat Less in Fiscal Year 2006: The 46 states party to the MSA reported receiving about $5.5 billion in MSA payments from the tobacco companies and about $390 million in securitized proceeds for 2005. For fiscal year 2006, these 46 states expect to receive close to the same amount of MSA payments;[Footnote 14] however no states expect to receive securitized proceeds. While the fiscal year 2005 and expected fiscal year 2006 MSA payments are similar to those of 2004, the securitized proceeds for the 2 years are about $4 billion and $4.4 billion less than in fiscal year 2004, respectively. Table 1 shows the payments and proceeds for each state for fiscal years 2005 and 2006. Table 1: MSA Payments and Securitized Proceeds States Reported Receiving in Fiscal Year 2005 and Expect to Receive in Fiscal Year 2006: State: Alabama; Fiscal year 2005: MSA payments received: $101,871,492; Fiscal year 2005: Securitized proceeds received: $0; Total: $101,871,492; Expected fiscal year 2006: MSA payments expected to be received: $101,871,679; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $101,871,679. State: Alaska; Fiscal year 2005: MSA payments received: $21,759,260; Fiscal year 2005: Securitized proceeds received: $0; Total: $21,759,260; Expected fiscal year 2006: MSA payments expected to be received: $22,133,477; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $22,133,477. State: Arizona; Fiscal year 2005: MSA payments received: $93,933,400; Fiscal year 2005: Securitized proceeds received: $0; Total: $93,933,400; Expected fiscal year 2006: MSA payments expected to be received: $89,553,200; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $89,553,200. State: Arkansas; Fiscal year 2005: MSA payments received: $52,774,224; Fiscal year 2005: Securitized proceeds received: $0; Total: $52,774,224; Expected fiscal year 2006: MSA payments expected to be received: $49,500,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $49,500,000. State: California[A]; Fiscal year 2005: MSA payments received: $406,932,000; Fiscal year 2005: Securitized proceeds received: $0; Total: $406,932,000; Expected fiscal year 2006: MSA payments expected to be received: $401,637,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $401,637,000. State: Colorado; Fiscal year 2005: MSA payments received: $87,367,598; Fiscal year 2005: Securitized proceeds received: $0; Total: $87,367,598; Expected fiscal year 2006: MSA payments expected to be received: $88,934,450; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $88,934,450. State: Connecticut; Fiscal year 2005: MSA payments received: $118,320,645; Fiscal year 2005: Securitized proceeds received: $0; Total: $118,320,645; Expected fiscal year 2006: MSA payments expected to be received: $111,000,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $111,000,000. State: Delaware; Fiscal year 2005: MSA payments received: $25,207,000; Fiscal year 2005: Securitized proceeds received: $0; Total: $25,207,000; Expected fiscal year 2006: MSA payments expected to be received: $27,698,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $27,698,000. State: Georgia; Fiscal year 2005: MSA payments received: $156,427,234; Fiscal year 2005: Securitized proceeds received: $0; Total: $156,427,234; Expected fiscal year 2006: MSA payments expected to be received: $146,123,673; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $146,123,673. State: Hawaii; Fiscal year 2005: MSA payments received: $38,357,999; Fiscal year 2005: Securitized proceeds received: $0; Total: $38,357,999; Expected fiscal year 2006: MSA payments expected to be received: $42,154,625; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $42,154,625. State: Idaho; Fiscal year 2005: MSA payments received: $23,151,453; Fiscal year 2005: Securitized proceeds received: $0; Total: $23,151,453; Expected fiscal year 2006: MSA payments expected to be received: $24,071,285; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $24,071,285. State: Illinois; Fiscal year 2005: MSA payments received: $296,629,800; Fiscal year 2005: Securitized proceeds received: $0; Total: $296,629,800; Expected fiscal year 2006: MSA payments expected to be received: $282,459,316; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $282,459,316. State: Indiana; Fiscal year 2005: MSA payments received: $130,000,535; Fiscal year 2005: Securitized proceeds received: $0; Total: $130,000,535; Expected fiscal year 2006: MSA payments expected to be received: $132,132,122; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $132,132,122. State: Iowa; Fiscal year 2005: MSA payments received: $55,425,528; Fiscal year 2005: Securitized proceeds received: $0; Total: $55,425,528; Expected fiscal year 2006: MSA payments expected to be received: $56,409,091; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $56,409,091. State: Kansas; Fiscal year 2005: MSA payments received: $53,131,448; Fiscal year 2005: Securitized proceeds received: $0; Total: $53,131,448; Expected fiscal year 2006: MSA payments expected to be received: $52,000,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $52,000,000. State: Kentucky; Fiscal year 2005: MSA payments received: $112,241,980; Fiscal year 2005: Securitized proceeds received: $0; Total: $112,241,980; Expected fiscal year 2006: MSA payments expected to be received: $108,600,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $108,600,000. State: Louisiana; Fiscal year 2005: MSA payments received: $144,591,814; Fiscal year 2005: Securitized proceeds received: $0; Total: $144,591,814; Expected fiscal year 2006: MSA payments expected to be received: $145,366,560; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $145,366,560. State: Maine; Fiscal year 2005: MSA payments received: $49,033,129; Fiscal year 2005: Securitized proceeds received: $0; Total: $49,033,129; Expected fiscal year 2006: MSA payments expected to be received: $49,594,690; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $49,594,690. State: Maryland; Fiscal year 2005: MSA payments received: $151,263,000; Fiscal year 2005: Securitized proceeds received: $0; Total: $151,263,000; Expected fiscal year 2006: MSA payments expected to be received: $149,503,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $149,503,000. State: Massachusetts; Fiscal year 2005: MSA payments received: $257,411,796; Fiscal year 2005: Securitized proceeds received: $0; Total: $257,411,796; Expected fiscal year 2006: MSA payments expected to be received: $253,349,780; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $253,349,780. State: Michigan; Fiscal year 2005: MSA payments received: $274,326,923; Fiscal year 2005: Securitized proceeds received: $0; Total: $274,326,923; Expected fiscal year 2006: MSA payments expected to be received: $285,500,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $285,500,000. State: Missouri; Fiscal year 2005: MSA payments received: $144,964,644; Fiscal year 2005: Securitized proceeds received: $0; Total: $144,964,644; Expected fiscal year 2006: MSA payments expected to be received: $154,000,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $154,000,000. State: Montana; Fiscal year 2005: MSA payments received: $27,070,703; Fiscal year 2005: Securitized proceeds received: $0; Total: $27,070,703; Expected fiscal year 2006: MSA payments expected to be received: $26,102,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $26,102,000. State: Nebraska; Fiscal year 2005: MSA payments received: $37,919,415; Fiscal year 2005: Securitized proceeds received: $0; Total: $37,919,415; Expected fiscal year 2006: MSA payments expected to be received: $36,273,307; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $36,273,307. State: Nevada; Fiscal year 2005: MSA payments received: $38,872,322; Fiscal year 2005: Securitized proceeds received: $0; Total: $38,872,322; Expected fiscal year 2006: MSA payments expected to be received: $39,507,406; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $39,507,406. State: New Hampshire; Fiscal year 2005: MSA payments received: $42,400,000; Fiscal year 2005: Securitized proceeds received: $0; Total: $42,400,000; Expected fiscal year 2006: MSA payments expected to be received: $43,000,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $43,000,000. State: New Jersey; Fiscal year 2005: MSA payments received: $246,462,646; Fiscal year 2005: Securitized proceeds received: $0; Total: $246,462,646; Expected fiscal year 2006: MSA payments expected to be received: $249,152,772; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $249,152,772. State: New Mexico; Fiscal year 2005: MSA payments received: $38,009,047; Fiscal year 2005: Securitized proceeds received: $0; Total: $38,009,047; Expected fiscal year 2006: MSA payments expected to be received: $29,657,921; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $29,657,921. State: New York[A]; Fiscal year 2005: MSA payments received: $410,564,424; Fiscal year 2005: Securitized proceeds received: $0; Total: $410,564,424; Expected fiscal year 2006: MSA payments expected to be received: $434,741,632; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $434,741,632. State: North Carolina; Fiscal year 2005: MSA payments received: $148,640,949; Fiscal year 2005: Securitized proceeds received: $0; Total: $148,640,949; Expected fiscal year 2006: MSA payments expected to be received: $163,353,241; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $163,353,241. State: North Dakota; Fiscal year 2005: MSA payments received: $23,326,754; Fiscal year 2005: Securitized proceeds received: $0; Total: $23,326,754; Expected fiscal year 2006: MSA payments expected to be received: $22,972,067; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $22,972,067. State: Ohio; Fiscal year 2005: MSA payments received: $321,050,059; Fiscal year 2005: Securitized proceeds received: $0; Total: $321,050,059; Expected fiscal year 2006: MSA payments expected to be received: $321,050,059[B]; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $321,050,059[B]. State: Oklahoma; Fiscal year 2005: MSA payments received: $66,034,977; Fiscal year 2005: Securitized proceeds received: $0; Total: $66,034,977; Expected fiscal year 2006: MSA payments expected to be received: $49,348,303; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $49,348,303. State: Oregon; Fiscal year 2005: MSA payments received: $73,142,434; Fiscal year 2005: Securitized proceeds received: $0; Total: $73,142,434; Expected fiscal year 2006: MSA payments expected to be received: $75,110,359; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $75,110,359. State: Pennsylvania; Fiscal year 2005: MSA payments received: $366,258,217; Fiscal year 2005: Securitized proceeds received: $0; Total: $366,258,217; Expected fiscal year 2006: MSA payments expected to be received: $351,180,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $351,180,000. State: Rhode Island; Fiscal year 2005: MSA payments received: $45,817,205; Fiscal year 2005: Securitized proceeds received: $0; Total: $45,817,205; Expected fiscal year 2006: MSA payments expected to be received: $47,988,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $47,988,000. State: South Carolina; Fiscal year 2005: MSA payments received: $73,361,299; Fiscal year 2005: Securitized proceeds received: $0; Total: $73,361,299; Expected fiscal year 2006: MSA payments expected to be received: $74,329,662; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $74,329,662. State: South Dakota; Fiscal year 2005: MSA payments received: $22,238,977; Fiscal year 2005: Securitized proceeds received: $0; Total: $22,238,977; Expected fiscal year 2006: MSA payments expected to be received: $23,232,155; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $23,232,155. State: Tennessee; Fiscal year 2005: MSA payments received: $156,708,209; Fiscal year 2005: Securitized proceeds received: $0; Total: $156,708,209; Expected fiscal year 2006: MSA payments expected to be received: $153,000,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $153,000,000. State: Utah; Fiscal year 2005: MSA payments received: $28,353,400; Fiscal year 2005: Securitized proceeds received: $0; Total: $28,353,400; Expected fiscal year 2006: MSA payments expected to be received: $29,541,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $29,541,000. State: Vermont; Fiscal year 2005: MSA payments received: $26,205,607; Fiscal year 2005: Securitized proceeds received: $0; Total: $26,205,607; Expected fiscal year 2006: MSA payments expected to be received: $24,500,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $24,500,000. State: Virginia; Fiscal year 2005: MSA payments received: $130,315,484; Fiscal year 2005: Securitized proceeds received: $389,977,667; Total: $520,293,151; Expected fiscal year 2006: MSA payments expected to be received: $132,777,945; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $132,777,945. State: Washington; Fiscal year 2005: MSA payments received: $130,879,000; Fiscal year 2005: Securitized proceeds received: $0; Total: $130,879,000; Expected fiscal year 2006: MSA payments expected to be received: $131,000,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $131,000,000. State: West Virginia; Fiscal year 2005: MSA payments received: $56,495,804; Fiscal year 2005: Securitized proceeds received: $0; Total: $56,495,804; Expected fiscal year 2006: MSA payments expected to be received: $55,400,000; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $55,400,000. State: Wisconsin; Fiscal year 2005: MSA payments received: $132,054,977; Fiscal year 2005: Securitized proceeds received: $0; Total: $132,054,977; Expected fiscal year 2006: MSA payments expected to be received: $138,929,751; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $138,929,751. State: Wyoming; Fiscal year 2005: MSA payments received: $15,827,492; Fiscal year 2005: Securitized proceeds received: $0; Total: $15,827,492; Expected fiscal year 2006: MSA payments expected to be received: $15,827,492; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $15,827,492. State: Total; Fiscal year 2005: MSA payments received: $5,453,132,303[]; Fiscal year 2005: Securitized proceeds received: $389,977,667; Total: $5,843,109,970[A]; Expected fiscal year 2006: MSA payments expected to be received: $5,441,567,020[A, B]; Expected fiscal year 2006: Securitized proceeds expected to be received: $0; Total: $5,441,567,020[A, B]. Sources: State budget offices or their designees. [A] 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. [B] We used Ohio's 2005 MSA payment as an estimate for its expected 2006 payment based on Ohio's budget document, which advises state agencies to expect the same or less tobacco funds for that year as was received in 2005. In responding to our survey, Ohio declined to provide an estimate of its 2006 expected payment because of uncertainties in adjustments in MSA payments that may result from changes in participating manufacturers' share of the tobacco market. [End of table] Since fiscal year 2000, states have received a total of about $53 billion in MSA payments and securitized proceeds; specifically, about $37 billion from MSA payments and $16 billion in securitized proceeds (see table 2). The amount of total payments and proceeds in fiscal year 2005 ($5.8 billion) was significantly less than in fiscal year 2004, when New York alone received $4.2 billion in securitized proceeds. States that have issued bonds backed by MSA payments must pay for debt service on these bonds. Table 2: MSA Payments and Securitized Proceeds Received by the 46 States 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: $3,838,376,465; Total: $10,076,769,961. 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: 2005; MSA payments: $5,453,132,303; Securitized proceeds: $389,977,667; Total: $5,843,109,970. Fiscal year: Total; MSA payments: $36,537,983,481; Securitized proceeds: $16,014,717,324; Total: $52,552,700,805. Sources: [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-851], [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-407], [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-518], [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-312], state budget offices or their designees, and GAO analysis. Note: This table does not include payments or proceeds that went to cities and counties in California and New York. [End of table] In fiscal year 2005, Virginia was the only state that received securitized proceeds. Fifteen states have received a total of about $16 billion in proceeds from the sale of bonds since fiscal year 2000, as shown in table 3. Five of the states--Alabama, Alaska, Iowa, Oregon and Rhode Island--have received proceeds in more than one year. Table 3: Total Amount of Securitized Proceeds Received by States, Fiscal Years 2000-2005: State: Alabama; Total securitized proceeds: $153,760,000. State: Arkansas; Total securitized proceeds: $58,268,549. State: Alaska; Total securitized proceeds: $203,000,000. State: California; Total securitized proceeds: $2,485,000,000. State: Iowa; Total securitized proceeds: $643,108,448. State: Louisiana; Total securitized proceeds: $1,069,510,894. State: New Jersey; Total securitized proceeds: $2,751,814,469. State: New York; Total securitized proceeds: $4,200,000,000. State: Oregon; Total securitized proceeds: $657,565,000[A]. State: Rhode Island; Total securitized proceeds: $545,859,897. State: South Carolina; Total securitized proceeds: $785,900,000. State: South Dakota; Total securitized proceeds: $278,045,000. State: Washington; Total securitized proceeds: $517,905,000. State: Virginia; Total securitized proceeds: $389,977,667. State: Wisconsin; Total securitized proceeds: $1,275,002,400. Total; Total securitized proceeds: $16,014,717,324[A]. Sources: [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-851], [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-407], [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-518], [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-312], state budget offices or their designees, and GAO analysis. [A] Oregon issued bonds, but did not securitize them with tobacco settlement payments. [End of table] States Allocated the Largest Portion of Their Funds to Address Health- Related Programs and Debt Service on Securitized Proceeds in Fiscal Year 2005 and Expect to Do the Same in Fiscal Year 2006: The 46 states reported that in fiscal year 2005 they allocated the largest portion of their combined MSA payments and securitized proceeds (32 percent) to health-related programs, and the next largest portion (24 percent) was allocated to debt service on securitized proceeds. In fiscal year 2006, the states expected the funding proportion that is devoted to health programs to remain at 32 percent and that which is devoted to debt service to increase to 29 percent. These two categories increased substantially from fiscal year 2004, when health-related programs represented 20 percent and debt service was 9 percent. The increases were accompanied by substantial decreases in state allocations to cover state budget shortfalls. Also, while the percentage allocations to some program categories increased in fiscal year 2005, the total number of dollars allocated to these categories decreased because of the nearly $4 billion decrease in securitized proceeds from fiscal year 2004 to 2005. For example, the percentage allocation to health care increased from 20 to 32 percent, while the dollar amount decreased from about $2.26 billion in fiscal year 2004 to $1.87 billion in fiscal year 2005 and is expected to remain about the same in fiscal year 2006. Examples of the health-related programs included Medicaid, Children's Health Insurance Program, and cancer research and prevention. Figure 1 and appendix III provide more details on states' allocations of their combined MSA payments and securitized proceeds for fiscal years 2000 through 2005, and expected allocations for fiscal year 2006. In addition, between fiscal years 2004 and 2005, the portion of funds that all states allocated to cover budget shortfalls decreased substantially from 44 percent to 4 percent, as shown in figure 1. Our analysis shows that changes in the allocations (primarily securitized proceeds) by New York and New Jersey were the primary cause of that decrease. The funds (about $6.3 billion) allocated by these two states accounted for over half of the total funds ($11.4 billion) that all states allocated in fiscal year 2004, but these amounts declined substantially in fiscal year 2005 and are expected to further decline in 2006. Specifically, in fiscal year 2004, New York allocated $3.8 billion to budget shortfalls while New Jersey allocated $873 million. These two states' allocations accounted for about 92 percent of all funds allocated to budget shortfalls in fiscal year 2004. In fiscal year 2005, however, New York allocated only $354 million to budget shortfalls while New Jersey did not allocate any funds to budget shortfalls. In fiscal year 2006, neither New York nor New Jersey expect to allocate any funds to budget shortfalls. Figure 1: States' Allocations of Combined MSA Payments and Securitized Proceeds for Fiscal Years 2000 through 2005, and Expected Allocations for Fiscal Year 2006: [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 year 2000 to 2001. [End of figure] 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 2005 and 2006, respectively. Table 4: Allocation of States' Combined MSA Payments and Securitized Proceeds, Fiscal Year 2005: [See PDF for image] Sources: State budget offices and their designees (data); GAO (analysis). Notes: Percentages may not add up to 100 because of rounding. Appendix IV shows the dollar amount. [End of table] Table 5: Expected Allocation of States' Combined MSA Payments and Securitized Proceeds, Fiscal Year 2006: [See PDF for image] Source: State budget offices and their designees (data); GAO (analysis): Notes: 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 others upon request. Copies are also available at no charge on the GAO Web site at [Hyperlink, http://www.gao.gov]. If you or your staff have any questions about this report, please contact me at (202) 512-3841 or [Hyperlink, robinsonr@gao.gov]. Contact points for our Offices of Congressional Relations or Public Affairs may be found on the last page of this report. Key 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: [End of section] Appendix I: Objectives, Scope, and Methodology: The Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill) requires GAO to report annually, from fiscal years 2002 through 2006, on how states use Master Settlement Agreement (MSA) payments made by tobacco companies. This report is the fifth and final 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]). In March 2005, we issued the report 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]). 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-01-8]). To respond to the 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 2005 and the amount of payments these states expect to receive during fiscal year 2006 and (2) states' allocations of MSA funds to various program categories for fiscal year 2005 and states' expected allocations for fiscal year 2006.[Footnote 15],[Footnote 16] To address these objectives, we surveyed[Footnote 17] the executive budget offices, or their designees, in the 46 states party to the MSA. In addition, we performed some reliability testing and independently corroborated these data, to the extent possible. We reviewed and compared MSA payment data reported by states with amounts provided by the National Association of Attorneys General.[Footnote 18] We contacted state officials to discuss any data entries on the surveys that were questionable, and resolved all discrepancies between the survey data and the data provided by National Association of Attorneys General. We also reviewed previous GAO reports and other relevant studies. Based on this work, we determined that the data were reliable enough for our purposes. We conducted our work from September 2005 through March 2006 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 19] 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 2006 payments, we were unable to obtain final information on the actual MSA payments states received during fiscal year 2006. Consequently, we obtained information on states' expected fiscal year 2006 MSA payments. Survey Methodology and Categorization of States' Allocations: We used a survey instrument similar to the one used to obtain information for our March 2005 report. In September 2005, we contacted the 46 state budget officials, or their designees, who completed the surveys for our March 2005 report. The officials in many of these states indicated they would be the respondents for this year's survey and several identified new respondents. In September 2005, 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 MSA payments states received in fiscal year 2005 and MSA payments they expect to receive in fiscal year 2006, and the states' allocations and expected allocations of MSA payments in fiscal years 2005 and 2006, respectively. We also obtained information on the states' proceeds, if any, from securitization or expected securitization in fiscal years 2005 and 2006, 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 2005 and 2006 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 are relying on state-reported information. 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. In addition, we took information on MSA payments and securitized proceeds received and allocated for fiscal years 2000 through 2004 that we collected for previous GAO reports dealing with the MSA[Footnote 20] and compared it with receipts and allocations for fiscal years 2005 and 2006. Categories of States' Allocations: To standardize the information reported by the 46 states, we developed the following categories and definitions for the program areas to which states allocated their payments. 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, which 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 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 (SCHIP); 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--e.g., 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: Each of the 46 states receives a share of the annual MSA payments based on the following fixed percentages identified in the MSA. Table 6: 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-05-312] and the MSA. [End of table] [End of section] Appendix III: States' Allocations of Combined MSA Payments and Securitized Proceeds for Fiscal Years 2000 through 2006: [See PDF for image] Sources: [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-312] and state budget offices or their designees (data); GAO (analysis). Note: Percentages may not add up to 100 percent and allocations may not add up to total allocations 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 MSA Payments and Securitized Proceeds Received and Allocated: This appendix presents the following information for each of the 46 states party to the MSA: * the amount of MSA payments received and the categories to which they were allocated for fiscal year 2005; * the amount of MSA payments expected to be received and the expected categories to which they will be allocated for fiscal year 2006; 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 2005 and 2006, respectively, if applicable (applies to four states). Tables 7 through 52 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 Virginia received securitized proceeds in fiscal year 2005; no states expect to receive proceeds in fiscal year 2006. However, Iowa, New York, and South Dakota allocated or expected to allocate funds composed of securitized proceeds received in prior years. In these four cases, we combined securitized proceeds with MSA payments. Alabama: Alabama reported receiving $101,871,492 from MSA payments in fiscal year 2005 and expects to receive $101,871,679 in fiscal year 2006. Table 7: Alabama's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $13,000,000; Fiscal year allocation: Expected 2006: $13,000,000. Program area: Education; Fiscal year allocation: 2005: $11,675,163; Fiscal year allocation: Expected 2006: $11,675,188; Examples of programs receiving or expected to receive allocations: Alternative schools, Department of Education. Program area: General purposes; Fiscal year allocation: 2005: $6,008,160; Fiscal year allocation: Expected 2006: $53,008,172; Examples of programs receiving or expected to receive allocations: Juvenile probation officers, administration, forensic sciences. Program area: Health; Fiscal year allocation: 2005: $45,449,741; Fiscal year allocation: Expected 2006: $45,449,837; Examples of programs receiving or expected to receive allocations: Public health, mental health, Medicaid, senior services. Program area: Social services; Fiscal year allocation: 2005: $25,207,739; Fiscal year allocation: Expected 2006: $25,207,792; Examples of programs receiving or expected to receive allocations: Child welfare, children's programs, youth services, rehabilitation services. Program area: Tobacco control; Fiscal year allocation: 2005: $530,689; Fiscal year allocation: Expected 2006: $530,690; Examples of programs receiving or expected to receive allocations: Tobacco enforcement for minors. Total; Fiscal year allocation: 2005: $101,871,492; Fiscal year allocation: Expected 2006: $148,871,679[A]. Source: Alabama Executive Budget Office. [A] Includes carry-over funds. [End of table] Alaska: Alaska reported receiving $21,759,260 from MSA payments in fiscal year 2005 and expects to receive $22,133,477 in fiscal year 2006. Table 8: Alaska's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $17,407,408; Fiscal year allocation: Expected 2006: $16,900,000. Program area: Tobacco control; Fiscal year allocation: 2005: $4,351,852; Fiscal year allocation: Expected 2006: $5,085,339; Examples of programs receiving or expected to receive allocations: Tobacco use prevention programs, use cessation grants, enforcement, counter marketing, evaluation of programs. Total; Fiscal year allocation: 2005: $21,759,260; Fiscal year allocation: Expected 2006: $21,985,339. Source: Alaska Department of Revenue - Tax Division. [End of table] Arizona: Arizona reported receiving $93,933,400 from MSA payments in fiscal year 2005 and expects to receive $89,553,200 in fiscal year 2006. Table 9: Arizona's MSA Payment Allocations: Program area: Health; Fiscal year allocation: 2005: $94,142,500; Fiscal year allocation: Expected 2006: $89,553,200; Examples of programs receiving or expected to receive allocations: Health services, including behavioral health. Total; Fiscal year allocation: 2005: $94,142,500[A]; Fiscal year allocation: Expected 2006: $89,553,200. Source: Arizona Governor's Budget Office. [A] Includes interest earned. [End of table] Arkansas: Arkansas reported receiving $52,774,224 from MSA payments in fiscal year 2005 and expects to receive $49,500,000 in fiscal year 2006. Table 10: Arkansas' MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $5,000,000; Fiscal year allocation: Expected 2006: $5,000,000. Program area: Education; Fiscal year allocation: 2005: $2,508,007; Fiscal year allocation: Expected 2006: $2,337,289; Examples of programs receiving or expected to receive allocations: University of Arkansas' School of Public Health. Program area: Health; Fiscal year allocation: 2005: $30,235,237; Fiscal year allocation: Expected 2006: $27,230,395; Examples of programs receiving or expected to receive allocations: Prevention and cessation, biomedical research, Medicaid, minority health. Program area: Tobacco control; Fiscal year allocation: 2005: $15,030,980; Fiscal year allocation: Expected 2006: $14,932,316; Examples of programs receiving or expected to receive allocations: Enforcement related to sales to minors. Total; Fiscal year allocation: 2005: $52,774,224; Fiscal year allocation: Expected 2006: $49,500,000. Source: Arkansas Department of Finance and Administration. [End of table] California: California reported receiving $406,932,000 from MSA payments in fiscal year 2005 and expects to receive $401,637,000 in fiscal year 2006. Table 11: California's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $406,932,000; Fiscal year allocation: Expected 2006: $401,637,000. Total; Fiscal year allocation: 2005: $406,932,000; Fiscal year allocation: Expected 2006: $401,637,000. Source: California Department of Finance. Notes: These MSA payments exclude payments made to California cities and counties. Cities and counties in the state received the same amount as the state. [End of table] Colorado: Colorado reported receiving $87,367,598 from MSA payments in fiscal year 2005 and expects to receive $88,934,450 in fiscal year 2006. Table 12: Colorado's MSA Payment Allocations: Program area: Education; Fiscal year allocation: 2005: $16,355,403; Fiscal year allocation: Expected 2006: $4,446,723; Examples of programs receiving or expected to receive allocations: Read to Achieve. Program area: General purposes; Fiscal year allocation: 2005: $64,530,052; Fiscal year allocation: Expected 2006: $34,909,422. Program area: Health; Fiscal year allocation: 2005: $36,172,817; Fiscal year allocation: Expected 2006: $39,905,273; Examples of programs receiving or expected to receive allocations: Visiting Nurses, Primary and Preventive Care grants, Children's Health Plan Plus and Prenatal Health Care, dental loan repayment, breast and cervical cancer, children's mental health, Ryan White AID/HIV, children with autism, the Medicaid Management Information System. Program area: Infrastructure; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $7,114,156. Program area: Social services; Fiscal year allocation: 2005: $4,304,053; Fiscal year allocation: Expected 2006: $4,446,723; Examples of programs receiving or expected to receive allocations: Veteran's Trust Fund, Tony Grampsas Youth Services. Program area: Tobacco control; Fiscal year allocation: 2005: $2,951,553; Fiscal year allocation: Expected 2006: $0; Examples of programs receiving or expected to receive allocations: Tobacco use cessation. Total; Fiscal year allocation: 2005: $124,313,878[A]; Fiscal year allocation: Expected 2006: $90,822,297[B]. Source: Colorado Governor's Office of State Planning and Budgeting. [A] Includes carry-over funds and interest earned. [B] Includes interest earned. [End of table] Connecticut: Connecticut reported receiving $118,320,645 from MSA payments in fiscal year 2005 and expects to receive $111,000,000 in fiscal year 2006. Table 13: Connecticut's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $112,984,760; Fiscal year allocation: Expected 2006: $94,875,000; Examples of programs receiving or expected to receive allocations: General Fund. Program area: Health; Fiscal year allocation: 2005: $2,000,000; Fiscal year allocation: Expected 2006: $16,000,000; Examples of programs receiving or expected to receive allocations: Biomedical Research Trust Fund, Tobacco and Health Trust Fund. Program area: Tobacco control; Fiscal year allocation: 2005: $125,000; Fiscal year allocation: Expected 2006: $125,000. Program area: Unallocated; Fiscal year allocation: 2005: $3,210,885; Fiscal year allocation: Expected 2006: $0. Total; Fiscal year allocation: 2005: $118,320,645; Fiscal year allocation: Expected 2006: $111,000,000. Source: Connecticut Office of Policy and Management, Fiscal and Program Policy Section. [End of table] Delaware: Delaware reported receiving $25,207,000 from MSA payments in fiscal year 2005 and expects to receive $27,698,000 in fiscal year 2006. Table 14: Delaware's MSA Payment Allocations: Program area: Program area: Education; Fiscal year allocation: 2005: $1,926,000; Fiscal year allocation: $2,188,000; Examples of programs receiving or expected to receive allocations: Examples of programs receiving or expected to receive allocations: Scholarships for nursing students at community college, survey on alcohol use, 5-year study and guidelines for lesser known illnesses. Program area: Program area: General purposes; Fiscal year allocation: 2005: $57,100; Fiscal year allocation: $57,100; Examples of programs receiving or expected to receive allocations: Examples of programs receiving or expected to receive allocations: Funding for one full-time staff to assist the Delaware Health Care Commission. Program area: Program area: Health; Fiscal year allocation: 2005: $16,193,400; Fiscal year allocation: $16,849,500; Examples of programs receiving or expected to receive allocations: Examples of programs receiving or expected to receive allocations: Delaware Prescription Drug Assistance Program, Medicaid coverage for Supplemental Security Income Transition and for Pregnant Women's Diabetes Pilot Program, Uninsured Action Plan, various cancer programs, Public Access Defibrillation Program. Program area: Program area: Social services; Fiscal year allocation: 2005: $2,888,700; Fiscal year allocation: $2,926,500; Examples of programs receiving or expected to receive allocations: Examples of programs receiving or expected to receive allocations: Supplemental Security Income supplement, substance abuse transitional housing, Heroin Residential Program, assisted living, attendant care services, caregiver support. Program area: Program area: Tobacco control; Fiscal year allocation: 2005: $4,684,500; Fiscal year allocation: $4,684,500; Examples of programs receiving or expected to receive allocations: Examples of programs receiving or expected to receive allocations: Tobacco use prevention education, enforcement activities, Smoking Cessation Quitline. Program area: Program area: Unallocated; Fiscal year allocation: 2005: $542,700; Fiscal year allocation: $992,400. Program area: Total; Fiscal year allocation: 2005: $26,292,400[A]; Fiscal year allocation: $27,698,000. Source: Delaware Department of Health and Social Services. [A] Includes carry-over funds. [End of table] Georgia: Georgia reported receiving $156,427,234 from MSA payments in fiscal year 2005 and expects to receive $146,123,673 in fiscal year 2006. Table 15: Georgia's MSA Payment Allocations: Program area: Economic development for tobacco regions; Fiscal year allocation: 2005: $47,123,333; Fiscal year allocation: Expected 2006: $47,123,333; Examples of programs receiving or expected to receive allocations: One Georgia Authority. Program area: Health; Fiscal year allocation: 2005: $89,362,868; Fiscal year allocation: Expected 2006: $99,148,370; Examples of programs receiving or expected to receive allocations: Medicaid, state children's health insurance programs, critical access hospital reimbursement, public health, Medicaid home and community- based waiver programs, Georgia Cancer Coalition (includes the Georgia Cancer Coalition Eminent Cancer Scientists and Clinicians Program for Cancer Research). Program area: Social services; Fiscal year allocation: 2005: $7,149,804; Fiscal year allocation: Expected 2006: $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 allocation: 2005: $12,733,995; Fiscal year allocation: Expected 2006: $3,205,245; Examples of programs receiving or expected to receive allocations: Tobacco Use Prevention Program, compliance and enforcement for underage smokers. Program area: Unallocated; Fiscal year allocation: 2005: $5,723. Total; Fiscal year allocation: 2005: $156,375,723[A]; Fiscal year allocation: Expected 2006: $156,626,752[B]. Source: Georgia Office of Planning and Budget. [A] Payments received in fiscal year 2004 were budgeted for fiscal year 2005. [B] Payments received in fiscal year 2005 were budgeted for fiscal year 2006. [End of table] Hawaii: Hawaii reported receiving $38,357,999 from MSA payments in fiscal year 2005 and expects to receive $42,154,625 in fiscal year 2006. Table 16: Hawaii's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $2,784,010; Fiscal year allocation: Expected 2006: $3,027,143; Examples of programs receiving or expected to receive allocations: Centralized administrative services, Tobacco Enforcement Special Fund for the Attorney General's Office for MSA Enforcement. Program area: Health; Fiscal year allocation: 2005: $12,450,896; Fiscal year allocation: Expected 2006: $13,694,619; Examples of programs receiving or expected to receive allocations: Department of Health's public health programs, Department of Human Service's children's health insurance programs. Program area: Infrastructure; Fiscal year allocation: 2005: $9,960,717; Fiscal year allocation: Expected 2006: $10,955,695; 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 fund; Fiscal year allocation: 2005: $8,715,627; Fiscal year allocation: Expected 2006: $9,586,233; Examples of programs receiving or expected to receive allocations: State of Hawaii's Emergency and Budget Reserve Fund, health and social service programs. Program area: Tobacco control; Fiscal year allocation: 2005: $4,446,749; Fiscal year allocation: Expected 2006: $4,890,935; Examples of programs receiving or expected to receive allocations: Tobacco Prevention and Control Trust Fund. Total; Fiscal year allocation: 2005: $38,357,999; Fiscal year allocation: Expected 2006: $42,154,625. Source: Hawaii Department of Budget and Finance. [End of table] Idaho: Idaho reported receiving $23,151,453 from MSA payments in fiscal year 2005 and expects to receive $24,071,285 in fiscal year 2006. Table 17: Idaho's MSA Payment Allocations: Program area: Health; Fiscal year allocation: 2005: $500,000; Fiscal year allocation: Expected 2006: $0; Examples of programs receiving or expected to receive allocations: Catastrophic Health Care Cost Program for tobacco-related disease treatment. Program area: Social services; Fiscal year allocation: 2005: $270,000; Fiscal year allocation: Expected 2006: $270,000; Examples of programs receiving or expected to receive allocations: Youth courts and status offender programs as they relate to tobacco and substance abuse issues. Program area: Tobacco control; Fiscal year allocation: 2005: $1,169,700; Fiscal year allocation: Expected 2006: $430,000; Examples of programs receiving or expected to receive allocations: Development of statewide youth coalitions, tobacco counter-marketing, public health districts' tobacco use cessation programs, youth tobacco investigations. Program area: Unallocated; Fiscal year allocation: 2005: $21,211,753; Fiscal year allocation: Expected 2006: $23,371,285. Total; Fiscal year allocation: 2005: $23,151,453; Fiscal year allocation: Expected 2006: $24,071,285. Source: Idaho Division of Financial Management. [End of table] Illinois: Illinois reported receiving $296,629,800 from MSA payments in fiscal year 2005 and expects to receive $282,459,316 in fiscal year 2006. Table 18: Illinois' MSA Payment Allocations: Program area: Education; Fiscal year allocation: 2005: $13,800,000; Fiscal year allocation: Expected 2006: $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 allocation: 2005: $49,001,698; Fiscal year allocation: Expected 2006: $26,553,172; 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, Court of Claims awards. Program area: Health; Fiscal year allocation: 2005: $203,765,481; Fiscal year allocation: Expected 2006: $238,414,550; Examples of programs receiving or expected to receive allocations: Medicaid drugs, drugs for senior citizens. Program area: Infrastructure; Fiscal year allocation: 2005: $1,817,343; Fiscal year allocation: Expected 2006: $7,602,749; Examples of programs receiving or expected to receive allocations: Capital maintenance on state owned facilities. Program area: Social services; Fiscal year allocation: 2005: $9,319,189; Fiscal year allocation: Expected 2006: $9,990,900; Examples of programs receiving or expected to receive allocations: Outreach programs to the aging. Program area: Tobacco control; Fiscal year allocation: 2005: $7,539,377; Fiscal year allocation: Expected 2006: $12,917,900; Examples of programs receiving or expected to receive allocations: Tobacco prevention activities of local health departments, tobacco control programs, tobacco enforcement of MSA provisions, grant to the American Lung Association. Total; Fiscal year allocation: 2005: $285,243,088[A]; Fiscal year allocation: Expected 2006: $309,279,271[A]. Source: Illinois Governor's Office of Management and Budget. [A] Includes carry-over funds and interest earned. [End of table] Indiana: Indiana reported receiving $130,000,535 from MSA payments in fiscal year 2005 and expects to receive $132,132,122 in fiscal year 2006. Table 19: Indiana's MSA Payment Allocations: Program area: Economic development for tobacco regions; Fiscal year allocation: 2005: $46,300,000; Fiscal year allocation: Expected 2006: $43,100,000; Examples of programs receiving or expected to receive allocations: Value Added Research Fund, Rural Development Administration Fund, Rural Development Council Fund, Technology Development Grant Fund, 21st Century Research and Technology Fund, Commission on Hispanic and Latino Affairs. Program area: General purposes; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $300,000; Examples of programs receiving or expected to receive allocations: Attorney General's Office. Program area: Health; Fiscal year allocation: 2005: $87,400,000; Fiscal year allocation: Expected 2006: $92,200,000; Examples of programs receiving or expected to receive allocations: Breast cancer education and diagnosis; prostate cancer education and diagnosis; sickle cell; State Department of Health Administration; cancer registry; minority health initiative; HIV/AIDS services; testing for drug-afflicted babies; AIDS education; state chronic diseases; Women, Infants, and Children supplement; Maternal and Child Health supplement; aid to TB hospitals; Local Health Maintenance Fund; Local Health Department Trust Account; Community Health Centers; minority epidemiology; Children's Health Insurance Program; Prescription Drug Account/Hoosier Rx; Community Health Centers. Program area: Infrastructure; Fiscal year allocation: 2005: $2,900,000; Fiscal year allocation: Expected 2006: $8,200,000; Examples of programs receiving or expected to receive allocations: Regional health care construction. Program area: Social services; Fiscal year allocation: 2005: $28,300,000; Fiscal year allocation: Expected 2006: $33,900,000; Examples of programs receiving or expected to receive allocations: Developmentally Disabled Client Services, Division of Disability, Aging and Rehabilitative Services; Social Services Block Grant. Program area: Tobacco control; Fiscal year allocation: 2005: $10,800,000; Fiscal year allocation: Expected 2006: $10,100,000; Examples of programs receiving or expected to receive allocations: Tobacco use prevention and cessation. Total; Fiscal year allocation: 2005: $175,700,000[A]; Fiscal year allocation: Expected 2006: $187,800,000[A]. Source: Indiana State Budget Agency. [A] Includes carry-over funds and interest earned. [End of table] Iowa: Iowa reported receiving $55,425,528 from MSA payments in fiscal year 2005 and expects to receive $56,409,091 in fiscal year 2006. In addition, Iowa reported $63,852,236 was available in fiscal year 2005 from a fund composed of (1) securitized proceeds received in prior years and (2) interest earned on these proceeds. Iowa expects $66,284,236 to be available from this fund in fiscal year 2006. Table 20: Iowa's Allocations of MSA Payments and Securitized Proceeds: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $42,978,000; Fiscal year allocation: Expected 2006: $43,680,000. Program area: Education; Fiscal year allocation: 2005: $2,153,250; Fiscal year allocation: Expected 2006: $2,153,250; Examples of programs receiving or expected to receive allocations: Early childhood development. Program area: General purposes; Fiscal year allocation: 2005: $2,297,285; Fiscal year allocation: Expected 2006: $3,331,285; Examples of programs receiving or expected to receive allocations: Correctional programs. Program area: Health; Fiscal year allocation: 2005: $66,837,664; Fiscal year allocation: Expected 2006: $68,517,227; Examples of programs receiving or expected to receive allocations: Medicaid, substance abuse. Program area: Tobacco control; Fiscal year allocation: 2005: $5,011,565; Fiscal year allocation: Expected 2006: $5,011,565; Examples of programs receiving or expected to receive allocations: Tobacco use, control, cessation programs. Total; Fiscal year allocation: 2005: $119,277,764[A]; Fiscal year allocation: Expected 2006: $122,693,327[A]. Source: Iowa Department of Management. [A] Includes carry-over funds and interest earned. [End of table] Kansas: Kansas reported receiving $53,131,448 from MSA payments in fiscal year 2005 and expects to receive $52,000,000 in fiscal year 2006. Table 21: Kansas' MSA Payment Allocations: Program area: Education; Fiscal year allocation: 2005: $8,684,755; Fiscal year allocation: Expected 2006: $9,329,045; 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 allocation: 2005: $752,882; Fiscal year allocation: Expected 2006: $252,882; Examples of programs receiving or expected to receive allocations: State General Fund, Children's Cabinet Administration. Program area: Health; Fiscal year allocation: 2005: $1,337,792; Fiscal year allocation: Expected 2006: $1,300,000; Examples of programs receiving or expected to receive allocations: Healthy Start Home Visitor, Telekid Health Care Link. Program area: Social services; Fiscal year allocation: 2005: $41,865,293; Fiscal year allocation: Expected 2006: $41,863,081; 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 (early childhood care and education), immunization outreach, school violence prevention, family preservation, attendant care for independent living. Program area: Tobacco control; Fiscal year allocation: 2005: $500,000; Fiscal year allocation: Expected 2006: $1,000,000; Examples of programs receiving or expected to receive allocations: Smoking prevention and cessation. Total; Fiscal year allocation: 2005: $53,140,722[ A]; Fiscal year allocation: Expected 2006: $53,745,008[A]. Source: Kansas Division of the Budget. [A] Includes interest earned. [End of table] Kentucky: Kentucky reported receiving $112,241,980 from MSA payments in fiscal year 2005 and expects to receive $108,600,000 in fiscal year 2006. Table 22: Kentucky's MSA Payment Allocations: Program area: Economic development for tobacco regions; Fiscal year allocation: 2005: $48,195,900; Fiscal year allocation: Expected 2006: $33,541300; Examples of programs receiving or expected to receive allocations: Governor's Office for Agricultural Policy, Conservation: Environmental Stewardship. Program area: Education; Fiscal year allocation: 2005: $10,908,800; Fiscal year allocation: Expected 2006: $10,908,800; Examples of programs receiving or expected to receive allocations: Families and Children: Early Childhood Development Program, Governor's Office of Early Childhood Development Program; Kentucky Higher Education Assistance Authority: Early Childhood Scholarship Program. Program area: General purposes; Fiscal year allocation: 2005: $3,616,980; Fiscal year allocation: Expected 2006: $175,000; Examples of programs receiving or expected to receive allocations: General Fund, Department of Revenue: enforcement. Program area: Health; Fiscal year allocation: 2005: $38,461,300; Fiscal year allocation: Expected 2006: $38,370,400; Examples of programs receiving or expected to receive allocations: Public Health: Health Access Nurturing Development Service, 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). Program area: Infrastructure; Fiscal year allocation: 2005: $6,116,600; Fiscal year allocation: Expected 2006: $20,671,200; Examples of programs receiving or expected to receive allocations: Debt Service: Water Resource Development, Rural Development Bond Fund. Program area: Tobacco control; Fiscal year allocation: 2005: $4,942,400; Fiscal year allocation: Expected 2006: $4,933,300; Examples of programs receiving or expected to receive allocations: Smoking cessation. Total; Fiscal year allocation: 2005: $112,241,980; Fiscal year allocation: Expected 2006: $108,600,000. Source: Kentucky Governor's Office for Policy Research. [End of table] Louisiana: Louisiana reported receiving $144,591,814 from MSA payments in fiscal year 2005 and expects to receive $145,366,560 in fiscal year 2006. Table 23: Louisiana's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $86,242,759; Fiscal year allocation: Expected 2006: $87,148,112. Program area: General purposes; Fiscal year allocation: 2005: $350,000; Fiscal year allocation: Expected 2006: $350,000; Examples of programs receiving or expected to receive allocations: Attorney General enforcement programs. Program area: Health; Fiscal year allocation: 2005: $14,377,675; Fiscal year allocation: Expected 2006: $13,758,480; Examples of programs receiving or expected to receive allocations: Medicaid, School-based Health Centers, Louisiana Children's Health Insurance Programs, health care science grants. Program area: Tobacco control; Fiscal year allocation: 2005: $500,000; Fiscal year allocation: Expected 2006: $500,000; Examples of programs receiving or expected to receive allocations: Smoking prevention and cessation grants. Program area: Unallocated; Fiscal year allocation: 2005: $43,121,380; Fiscal year allocation: Expected 2006: $43,609,968. Total; Fiscal year allocation: 2005: $144,591,814[A]; Fiscal year allocation: Expected 2006: $145,366,560. Source: Louisiana Division of Administration, Office of Planning and Budget. [A] Includes carry-over funds. [End of table] Maine: Maine reported receiving $49,033,129 from MSA payments in fiscal year 2005 and expects to receive $49,594,690 in fiscal year 2006. Table 24: Maine's MSA Payment Allocations: Program area: Budget shortfalls; Fiscal year allocation: 2005: $55,218; Fiscal year allocation: Expected 2006: $451,010. Program area: Education; Fiscal year allocation: 2005: $10,423,452; Fiscal year allocation: Expected 2006: $10,793,711; Examples of programs receiving or expected to receive allocations: Child care and development activities, after-school services, Head Start. Program area: General purposes; Fiscal year allocation: 2005: $56,552; Fiscal year allocation: Expected 2006: $65,747; Examples of programs receiving or expected to receive allocations: Attorney General enforcement and administration. Program area: Health; Fiscal year allocation: 2005: $17,883,261; Fiscal year allocation: Expected 2006: $17,920,623; Examples of programs receiving or expected to receive allocations: Prescription drugs, Medicaid, other health initiatives. Program area: Social services; Fiscal year allocation: 2005: $5,658,262; Fiscal year allocation: Expected 2006: $5,741,915; Examples of programs receiving or expected to receive allocations: Substance abuse prevention, intervention, testing, treatment. Program area: Tobacco control; Fiscal year allocation: 2005: $15,159,818; Fiscal year allocation: Expected 2006: $15,295,990; Examples of programs receiving or expected to receive allocations: Community and school grants and statewide coordination to reduce tobacco addiction and use; tobacco prevention, control, treatment. Total; Fiscal year allocation: 2005: $49,236,563[A]; Fiscal year allocation: Expected 2006: $50,268,996[A]. Source: Maine Department of Administrative and Financial Services, Bureau of the Budget. [A] Includes carry-over funds and interest earned. [End of table] Maryland: Maryland reported receiving $151,263,000 from MSA payments in fiscal year 2005 and expects to receive $149,503,000 in fiscal year 2006. Table 25: Maryland's MSA Payment Allocations: Program area: Education; Fiscal year allocation: 2005: $3,000,000; Fiscal year allocation: Expected 2006: $3,000,000; Examples of programs receiving or expected to receive allocations: Text books for nonpublic schools. Program area: General purposes; Fiscal year allocation: 2005: $30,169,000; Fiscal year allocation: Expected 2006: $30,052,000; Examples of programs receiving or expected to receive allocations: Legal fees (settlement with outside counsel), Attorney General's Office for Nonparticipating Manufacturers' Enforcement. Program area: Health; Fiscal year allocation: 2005: $99,924,000; Fiscal year allocation: Expected 2006: $104,362,000; Examples of programs receiving or expected to receive allocations: Medicaid, cancer prevention, screening and treatment; heart and lung disease; breast and cervical cancer; management; drug addiction. Program area: Payments to tobacco growers; Fiscal year allocation: 2005: $5,653,000; Fiscal year allocation: Expected 2006: $5,956,000; Examples of programs receiving or expected to receive allocations: Tri- County Council of Southern Maryland. Program area: Tobacco control; Fiscal year allocation: 2005: $9,854,000; Fiscal year allocation: Expected 2006: $9,230,000; Examples of programs receiving or expected to receive allocations: Countermarketing, minority outreach and technical assistance, surveillance and evaluation, administration. Program area: Unallocated; Fiscal year allocation: 2005: $2,663,000; Fiscal year allocation: Expected 2006: $0. Total; Fiscal year allocation: 2005: $151,263,000; Fiscal year allocation: Expected 2006: $152,600,000[A]. Source: Maryland Department of Budget and Management. [A] Includes carry-over funds. [End of table] Massachusetts: Massachusetts reported receiving $254,593,761 from MSA payments in fiscal year 2005 and expects to receive $253,349,780 in fiscal year 2006. Table 26: Massachusetts' MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $254,593,761; Fiscal year allocation: Expected 2006: $253,349,780; Examples of programs receiving or expected to receive allocations: Commonwealth's General Fund. Total; Fiscal year allocation: 2005: $254,593,761; Fiscal year allocation: Expected 2006: $253,349,780. Source: Massachusetts Executive Office of Administration and Finance. [End of table] Michigan: Michigan reported receiving $274,326,923 from MSA payments in fiscal year 2005 and expects to receive $285,500,000 in fiscal year 2006. Table 27: Michigan's MSA Payment Allocations: Program area: Budget shortfalls; Fiscal year allocation: 2005: $7,000,000; Fiscal year allocation: Expected 2006: $0. Program area: Education; Fiscal year allocation: 2005: $99,300,000; Fiscal year allocation: Expected 2006: $166,300,000; Examples of programs receiving or expected to receive allocations: Merit Award scholarships and tuition incentive grants for higher education students, Michigan Educational Assessment Program testing for K-12 students, nursing scholarships, Michigan Education Savings Plan, general higher education support. Program area: General purposes; Fiscal year allocation: 2005: $368,200; Fiscal year allocation: Expected 2006: $386,800; Examples of programs receiving or expected to receive allocations: Attorney General administration. Program area: Health; Fiscal year allocation: 2005: $185,100,000; Fiscal year allocation: Expected 2006: $122,300,000; Examples of programs receiving or expected to receive allocations: Elder pharmaceutical assistance, Medicaid personal needs allowance, respite care, Medicaid support, biomedical research and development. Total; Fiscal year allocation: 2005: $291,768,200[A]; Fiscal year allocation: Expected 2006: $288,986,800[A]. Source: Michigan Office of Health and Human Services, State Budget Office. [A] Includes carry-over funds and interest earned. [End of table] Missouri: Missouri reported receiving $144,964,644 from MSA payments in fiscal year 2005 and expects to receive $154,000,000 in fiscal year 2006. Table 28: Missouri's MSA Payment Allocations: Program area: Budget shortfalls; Fiscal year allocation: 2005: $72,149,994; Fiscal year allocation: Expected 2006: $84,089,532. Program area: General purposes; Fiscal year allocation: 2005: $2,375,886; Fiscal year allocation: Expected 2006: $2,145,573; Examples of programs receiving or expected to receive allocations: General revenue fund to support programs such as education, Medicaid, corrections. Program area: Health; Fiscal year allocation: 2005: $70,369,652; Fiscal year allocation: Expected 2006: $67,282,481; Examples of programs receiving or expected to receive allocations: Payments to Medicaid providers, 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 allocation: 2005: $482,414; Fiscal year allocation: Expected 2006: $482,414; Examples of programs receiving or expected to receive allocations: Enforcement of state laws on underage tobacco use. Total; Fiscal year allocation: 2005: $145,377,946[A]; Fiscal year allocation: Expected 2006: $154,000,000. Source: Missouri Division of Budget and Planning. [A] Includes carry-over funds. [End of table] Montana: Montana reported receiving $27,070,703 from MSA payments in fiscal year 2005 and expects to receive $26,102,000 in fiscal year 2006. Table 29: Montana's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $2,977,777; Fiscal year allocation: Expected 2006: $2,871,220; Examples of programs receiving or expected to receive allocations: General Fund. Program area: Health; Fiscal year allocation: 2005: $19,263,236; Fiscal year allocation: Expected 2006: $14,065,685; Examples of programs receiving or expected to receive allocations: State Children's Health Insurance Program (SCHIP), Medicaid, Mental Health Services, Hospice and Home Health, Tobacco Trust Fund, Montana Comprehensive Health Insurance. Program area: Social services; Fiscal year allocation: 2005: $2,844,884; Fiscal year allocation: Expected 2006: $0; Examples of programs receiving or expected to receive allocations: Childcare, child support enforcement, infant mortality abatement, poison control, AIDS prevention, independent living, extended employment. Program area: Tobacco control; Fiscal year allocation: 2005: $2,509,368; Fiscal year allocation: Expected 2006: $6,825,385; Examples of programs receiving or expected to receive allocations: Tobacco prevention. Program area: Unallocated; Fiscal year allocation: 2005: $524,562; Fiscal year allocation: Expected 2006: $2,339,710. Total; Fiscal year allocation: 2005: $28,119,823[ A]; Fiscal year allocation: Expected 2006: $26,102,000. Source: Montana Office of Budget and Program Planning. [A] Includes carry over funds. [End of table] Nebraska: Nebraska reported receiving $37,919,415 from MSA payments in fiscal year 2005 and expects to receive $36,273,307 in fiscal year 2006. Table 30: Nebraska's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $86,595; Fiscal year allocation: Expected 2006: $88,437; Examples of programs receiving or expected to receive allocations: MSA and tobacco tax law enforcement. Program area: Health; Fiscal year allocation: 2005: $20,216,433; Fiscal year allocation: Expected 2006: $21,678,570; Examples of programs receiving or expected to receive allocations: Behavioral health (Medicaid and non-Medicaid), public health, State Children's Health Insurance Program, biomedical research. Program area: Social services; Fiscal year allocation: 2005: $2,848,200; Fiscal year allocation: Expected 2006: $2,983,029; Examples of programs receiving or expected to receive allocations: Community-based developmental disability services, respite care assistance. Program area: Tobacco control; Fiscal year allocation: 2005: $2,500,000; Fiscal year allocation: Expected 2006: $2,500,000; Examples of programs receiving or expected to receive allocations: Tobacco use prevention, control, and cessation programs for youth and adults. Program area: Unallocated; Fiscal year allocation: 2005: $12,268,187; Fiscal year allocation: Expected 2006: $9,023,271. Total; Fiscal year allocation: 2005: $37,919,415; Fiscal year allocation: Expected 2006: $36,273,307. Source: Nebraska Department of Administrative Services-Budget Division. [End of table] Nevada: Nevada reported receiving $38,872,322 from MSA payments in fiscal year 2005 and expects to receive $39,507,406 in fiscal year 2006. Table 31: Nevada's MSA Payment Allocations: Program area: Education; Fiscal year allocation: 2005: $33,003,114; Fiscal year allocation: Expected 2006: $16,250,000; 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 allocation: 2005: $286,523; Fiscal year allocation: Expected 2006: $427,350; 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 allocation: 2005: $12,990,070; Fiscal year allocation: Expected 2006: $12,523,141; 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, endowment fund to provide grants for the promotion of public health. Program area: Social services; Fiscal year allocation: 2005: $10,121,699; Fiscal year allocation: Expected 2006: $5,757,637; Examples of programs receiving or expected to receive allocations: Grants that assist senior citizens to live independent of care facilities, senior services, homemaker program. Program area: Tobacco control; Fiscal year allocation: 2005: $4,680,754; Fiscal year allocation: Expected 2006: $4,528,847; Examples of programs receiving or expected to receive allocations: Grants to help fund tobacco cessation programs. Total; Fiscal year allocation: 2005: $61,082,160[A]; Fiscal year allocation: Expected 2006: $39,486,975[A]. Source: State Treasurer's Office. [A] Includes carry-over funds and interest earned. [End of table] New Hampshire: New Hampshire reported receiving $42,400,000 from MSA payments in fiscal year 2005 and expects to receive $43,000,000 in fiscal year 2006. Table 32: New Hampshire's MSA Payment Allocations: Program area: Education; Fiscal year allocation: 2005: $40,000,000; Fiscal year allocation: Expected 2006: $43,000,000; Examples of programs receiving or expected to receive allocations: Education Trust Fund, which distributes grants to school districts. Program area: General purposes; Fiscal year allocation: 2005: $2,400,000; Fiscal year allocation: Expected 2006: $0; Examples of programs receiving or expected to receive allocations: General Fund. Total; Fiscal year allocation: 2005: $42,400,000; Fiscal year allocation: Expected 2006: $43,000,000. Source: New Hampshire Office of Legislative Budget Assistant. [End of table] New Jersey: New Jersey reported receiving $246,462,646 from MSA payments in fiscal year 2005 and expects to receive $249,152,772 in fiscal year 2006. Table 33: New Jersey's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $245,110,225; Fiscal year allocation: Expected 2006: $249,152,772. Program area: Health; Fiscal year allocation: 2005: $135,242; Fiscal year allocation: Expected 2006: $0; Examples of programs receiving or expected to receive allocations: New Jersey Family Care, new and expanded Community Options for Seniors, expansion of Cancer Initiative, Senior Gold Pharmaceutical Assistance. Total; Fiscal year allocation: 2005: $245,245,467; Fiscal year allocation: Expected 2006: $249,152,772. Source: New Jersey Office of Management and Budget. [End of table] New Mexico: New Mexico reported receiving $38,009,047 from MSA payments in fiscal year 2005 and expects to receive $29,657,921 in fiscal year 2006. Table 34: New Mexico's MSA Payment Allocations: Program area: General Purposes; Fiscal year allocation: 2005: $26,139,047; Fiscal year allocation: Expected 2006: $17,787,921. Program area: Health; Fiscal year allocation: 2005: $11,870,000; Fiscal year allocation: Expected 2006: $11,870,000; Examples of programs receiving or expected to receive allocations: Lung and tobacco illness research, poison control. Total; Fiscal year allocation: 2005: $38,009,047; Fiscal year allocation: Expected 2006: $29,657,921. Source: New Mexico Department of Finance and Administration. [End of table] New York: New York reported receiving $410,564,424 from MSA payments in fiscal year 2005 and expects to receive $434,741,632 in fiscal year 2006. 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. Table 35: New York's Allocations of MSA Payments and Securitized Proceeds: Program area: Budget shortfalls; Fiscal year allocation: 2005: $354,313,266; Fiscal year allocation: Expected 2006: $0. Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $447,946,434; Fiscal year allocation: Expected 2006: $434,741,632. Total; Fiscal year allocation: 2005: $802,259,700[A]; Fiscal year allocation: Expected 2006: $434,741,632. Source: New York State Division of the Budget. [A] This amount includes securitized proceeds received in fiscal year 2004. [End of table] North Carolina: North Carolina reported receiving $148,640,949 from MSA payments in fiscal year 2005 and expects to receive $163,353,241 in fiscal year 2006. Table 36: North Carolina's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $1,979,096. Program area: Economic development for tobacco regions; Fiscal year allocation: 2005: $27,200,505; Fiscal year allocation: Expected 2006: $5,059,214; Examples of programs receiving or expected to receive allocations: Aerospace Alliance Initiative Awards, Economic Catalyst Awards, Diversification Initiatives, Agri-Economic Development, Workforce Development, Conservation of Natural Resources. Program area: Education; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $2,000,000; Examples of programs receiving or expected to receive allocations: Golden Leaf Foundation. Program area: General purposes; Fiscal year allocation: 2005: $60,000,000; Fiscal year allocation: Expected 2006: $34,000,000; Examples of programs receiving or expected to receive allocations: General Fund. Program area: Health; Fiscal year allocation: 2005: $53,500,000; Fiscal year allocation: Expected 2006: $40,245,278; Examples of programs receiving or expected to receive allocations: Senior Care Prescription Drug Program, Childhood Obesity Reduction, Medication Assistance Program, Health Disparities. Program area: Infrastructure; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $1,979,096; Examples of programs receiving or expected to receive allocations: Tobacco Trust fund transfer. Program area: Tobacco control; Fiscal year allocation: 2005: $15,000,000; Fiscal year allocation: Expected 2006: $15,000,000; Examples of programs receiving or expected to receive allocations: Youth tobacco use prevention and cessation, enforcement of tobacco laws prohibiting sales to minors. Total; Fiscal year allocation: 2005: $155,700,505[A]; Fiscal year allocation: Expected 2006: $100,262,684[A]. Source: North Carolina Office of State Budget and Management. [A] Includes carry-over funds and interest earned. In addition, officials reported that they excluded the allocation for administrative expenses for fiscal year 2005 because the data were not available. [End of table] North Dakota: North Dakota reported receiving $23,326,754 from MSA payments in fiscal year 2005 and expects to receive $22,972,067 in fiscal year 2006. Table 37: North Dakota's MSA Payment Allocations: Program area: Education; Fiscal year allocation: 2005: $10,497,039; Fiscal year allocation: Expected 2006: $10,337,430; Examples of programs receiving or expected to receive allocations: 45 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 allocation: 2005: $489,862; Fiscal year allocation: Expected 2006: $229,721; Examples of programs receiving or expected to receive allocations: Dental loan repayment program, breast and cervical cancer screening. Program area: Infrastructure; Fiscal year allocation: 2005: $10,497,039; Fiscal year allocation: Expected 2006: $10,337,430; Examples of programs receiving or expected to receive allocations: Water projects. Program area: Tobacco control; Fiscal year allocation: 2005: $1,842,814; Fiscal year allocation: Expected 2006: $2,067,486; Examples of programs receiving or expected to receive allocations: Tobacco cessation programs. Total; Fiscal year allocation: 2005: $23,326,754; Fiscal year allocation: Expected 2006: $22,972,067. Source: North Dakota Office of Management and Budget, Fiscal Management Division. [End of table] Ohio: Ohio reported receiving $321,050,059 from MSA payments in fiscal year 2005. We used Ohio's 2005 MSA payment as an estimate for its expected 2006 payment based on Ohio's budget documents, which advise state agencies to expect the same or less tobacco funds for that year as was received in 2005. In responding to our survey, Ohio declined to provide an estimate of their 2006 expected payment because of uncertainties in adjustments in MSA payments that may result from changes in participating manufacturers' share of the tobacco market. Table 38: Ohio's MSA Payment Allocations: Program area: Economic development for tobacco regions; Fiscal year allocation: 2005: $15,584,593; Fiscal year allocation: Expected 2006: $13,030,277; Examples of programs receiving or expected to receive allocations: Programs to increase the variety, quantity, and value of nontobacco agricultural products, strategic investment in communities adversely impacted by a reduction in tobacco demand, education and training for tobacco growers. Program area: Education; Fiscal year allocation: 2005: $9,277,865; Fiscal year allocation: Expected 2006: $6,274,109; Examples of programs receiving or expected to receive allocations: Technology enhancements in schools. Program area: General purposes; Fiscal year allocation: 2005: $9,533,109; Fiscal year allocation: Expected 2006: $17,971,831; Examples of programs receiving or expected to receive allocations: Administration, oversight, and enforcement activities related to the MSA, law enforcement facilities improvements. Program area: Health; Fiscal year allocation: 2005: $37,307,790; Fiscal year allocation: Expected 2006: $52,080,892; Examples of programs receiving or expected to receive allocations: Minority health programs, alcohol and drug abuse prevention, biomedical technology transfer, support for children's hospitals, lung cancer and disease research and prevention. Program area: Infrastructure; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $245,922,706; Examples of programs receiving or expected to receive allocations: School construction. Program area: Social services; Fiscal year allocation: 2005: $3,725,000; Fiscal year allocation: Expected 2006: $3,982,451; Examples of programs receiving or expected to receive allocations: Funding for uncompensated health care of uninsured. Program area: Tobacco control; Fiscal year allocation: 2005: $37,050,428; Fiscal year allocation: Expected 2006: $47,905,890; Examples of programs receiving or expected to receive allocations: Underage tobacco enforcement, use prevention and cessation programs. Total; Fiscal year allocation: 2005: $112,478,785[A]; Fiscal year allocation: Expected 2006: $387,168,156[A]. Source: Ohio Office of Budget and Management. [A] Ohio supports each year's programs with MSA payments received during the prior fiscal year as well as interest earned. [End of table] Oklahoma: Oklahoma reported receiving $66,034,977 from MSA payments in fiscal year 2005 and expects to receive $49,348,303 in fiscal year 2006. Table 39: Oklahoma's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $1,806,502; Fiscal year allocation: Expected 2006: $1,500,000; Examples of programs receiving or expected to receive allocations: Attorney General's Evidence Fund. Program area: Health; Fiscal year allocation: 2005: $40,445,047; Fiscal year allocation: Expected 2006: $32,649,026; Examples of programs receiving or expected to receive allocations: Medicaid, Tobacco Settlement Endowment Trust Fund (to be used for health programs). Program area: Social services; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $4,345,788; Examples of programs receiving or expected to receive allocations: Child welfare, foster care services for homebound elders, senior nutrition. Program area: Tobacco control; Fiscal year allocation: 2005: $18,886,011; Fiscal year allocation: Expected 2006: $15,199,277; Examples of programs receiving or expected to receive allocations: Tobacco Settlement Endowment Trust Fund (to be used for control programs). Program area: Unallocated; Fiscal year allocation: 2005: $4,897,417; Fiscal year allocation: Expected 2006: $0. Total; Fiscal year allocation: 2005: $66,034,977; Fiscal year allocation: Expected 2006: $53,694,091[A]. Source: Oklahoma Office of State Finance. [A] Includes carry-over funds. [End of table] Oregon: Oregon reported receiving $73,142,434 from MSA payments in fiscal year 2005 and expects to receive $75,110,359 in fiscal year 2006. Table 40: Oregon's MSA Payment Allocations: Program area: Debt service; Fiscal year allocation: 2005: $43,770,304; Fiscal year allocation: Expected 2006: $58,737,984. Program area: Health; Fiscal year allocation: 2005: $27,600,000; Fiscal year allocation: Expected 2006: $12,250,000; Examples of programs receiving or expected to receive allocations: Oregon Health Plan, the state's Medicaid acute health care delivery system. Program area: Tobacco control; Fiscal year allocation: 2005: $700,000; Fiscal year allocation: Expected 2006: $0. Program area: Unallocated; Fiscal year allocation: 2005: $50,925,577; Fiscal year allocation: Expected 2006: $4,122,375. Total; Fiscal year allocation: 2005: $122,995,881[A]; Fiscal year allocation: Expected 2006: $75,110,359. Source: Oregon Department of Administrative Services. [A] Includes carry-over funds. [End of table] Pennsylvania: Pennsylvania reported receiving $366,258,217 from MSA payments in fiscal year 2005 and expects to receive $351,180,000 in fiscal year 2006. Table 41: Pennsylvania's MSA Payment Allocations: Program area: Health[A]; Fiscal year allocation: 2005: $326,354,000; Fiscal year allocation: Expected 2006: $333,295,000; Examples of programs receiving or expected to receive allocations: Health research, adult health insurance, uncompensated care, medical assistance for workers with disabilities, community medical assistance. Program area: Tobacco control; Fiscal year allocation: 2005: $44,503,000; Fiscal year allocation: Expected 2006: $32,963,000; Examples of programs receiving or expected to receive allocations: Tobacco use prevention and cessation. Total; Fiscal year allocation: 2005: $370,857,000[ A]; Fiscal year allocation: Expected 2006: $366,258,000[A]. Source: Pennsylvania Governor's Office of the Budget. [A] Includes carry-over funds. [End of table] Rhode Island: Rhode Island reported receiving $45,817,205 from MSA payments in fiscal year 2005 and expects to receive $47,988,000 in fiscal year 2006. Table 42: Rhode Island's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $45,315,618; Fiscal year allocation: Expected 2006: $47,988,000. Total; Fiscal year allocation: 2005: $45,315,618; Fiscal year allocation: Expected 2006: $47,988,000. Source: State of Rhode Island Budget Office. [End of table] South Carolina: South Carolina reported receiving $73,361,299 from MSA payments in fiscal year 2005 and expects to receive $74,329,662 in fiscal year 2006. Table 43: South Carolina's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $73,361,299; Fiscal year allocation: Expected 2006: $74,329,662. Total; Fiscal year allocation: 2005: $73,361,299; Fiscal year allocation: Expected 2006: $74,329,662. Source: South Carolina Office of State Budget. [End of table] South Dakota: South Dakota reported receiving $22,238,977 from MSA payments in fiscal year 2005 and expects to receive $23,232,155 in fiscal year 2006. In addition, South Dakota reported $14,322,737 was available in fiscal year 2005 from a fund composed of (1) securitized proceeds received in prior years and (2) interest earned on these proceeds. South Dakota expects $15,005,263 to be available from this fund in fiscal year 2006. Table 44: South Dakota's Allocations of MSA Payments and Securitized Proceeds: Program area: Debt service on securitized funds[A]; Fiscal year allocation: 2005: $23,222,138; Fiscal year allocation: Expected 2006: $17,167,994. Program area: Education[B]; Fiscal year allocation: 2005: $13,572,737; Fiscal year allocation: Expected 2006: $15,005,263; Examples of programs receiving or expected to receive allocations: General and special education, technology in schools, scholarships, postsecondary vocational education. Program area: Tobacco control[B]; Fiscal year allocation: 2005: $750,000; Fiscal year allocation: Expected 2006: $0; Examples of programs receiving or expected to receive allocations: Tobacco prevention and reduction plan. Total; Fiscal year allocation: 2005: $37,544,875; Fiscal year allocation: Expected 2006: $32,173,257. Source: South Dakota Bureau of Finance and Management and South Dakota Health and Education Facilities Authority. [A] The Education Enhancement Funding Corporation pays for the debt service on securitized funds because the MSA payments are issued directly to the corporation rather than to the state. [B] The state allocates these funds based on interest earned. [End of table] Tennessee: Tennessee reported receiving $156,708,209 from MSA payments in fiscal year 2005 and expects to receive $153,000,000 in fiscal year 2006. Table 45: Tennessee's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $156,708,209; Fiscal year allocation: Expected 2006: $153,000,000; Examples of programs receiving or expected to receive allocations: General Fund. Total; Fiscal year allocation: 2005: $156,708,209; Fiscal year allocation: Expected 2006: $153,000,000. Source: Tennessee Department of Finance and Administration. [End of table] Utah: Utah reported receiving $28,353,400 from MSA payments in fiscal year 2005 and expects to receive $29,541,000 in fiscal year 2006. Table 46: Utah's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $100,000; Fiscal year allocation: Expected 2006: $100,000; Examples of programs receiving or expected to receive allocations: Attorney General's Office. Program area: Health; Fiscal year allocation: 2005: $12,891,800; Fiscal year allocation: Expected 2006: $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 allocation: 2005: $8,506,000; Fiscal year allocation: Expected 2006: $7,385,300; 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 allocation: 2005: $2,000,000; Fiscal year allocation: Expected 2006: $2,000,000; Examples of programs receiving or expected to receive allocations: Drug Courts, Drug Board Pilot Program. Program area: Tobacco control; Fiscal year allocation: 2005: $4,076,000; Fiscal year allocation: Expected 2006: $4,062,100; Examples of programs receiving or expected to receive allocations: Tobacco Quit Line, TV campaign, prevention partnerships. Program area: Unallocated; Fiscal year allocation: 2005: $779,600; Fiscal year allocation: Expected 2006: $2,990,800. Total; Fiscal year allocation: 2005: $28,353,400; Fiscal year allocation: Expected 2006: $29,541,000. Source: Utah Governor's Office of Planning and Budget. [End of table] Vermont: Vermont reported receiving $26,205,607 from MSA payments in fiscal year 2005 and expects to receive $24,500,000 in fiscal year 2006. Table 47: Vermont's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $158,000; Fiscal year allocation: Expected 2006: $158,000; Examples of programs receiving or expected to receive allocations: Tax and Fund administration. Program area: Health; Fiscal year allocation: 2005: $21,111,951; Fiscal year allocation: Expected 2006: $21,233,111; Examples of programs receiving or expected to receive allocations: State Medicaid Match, drug and alcohol programs. Program area: Social services; Fiscal year allocation: 2005: $652,349; Fiscal year allocation: Expected 2006: $579,000; Examples of programs receiving or expected to receive allocations: Safe housing (project against domestic violence). Program area: Tobacco control; Fiscal year allocation: 2005: $4,919,317; Fiscal year allocation: Expected 2006: $5,132,698; Examples of programs receiving or expected to receive allocations: Media campaigns, marketing enforcement. Total; Fiscal year allocation: 2005: $26,841,617[A]; Fiscal year allocation: Expected 2006: $27,102,809[A]. Source: Vermont Department of Finance and Management. [A] Includes carry-over funds. [End of table] Virginia: Virginia reported receiving $130,315,484 from MSA payments in fiscal year 2005 and expects to receive $132,444,540 in fiscal year 2006. In addition, Virginia reported receiving $389,977,677 in securitized proceeds in fiscal year 2005. Table 48: Virginia's Allocations of MSA Payment and Securitized Proceeds: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $33,444,540. Program area: Economic development for tobacco regions; Fiscal year allocation: 2005: $45,157,742; Fiscal year allocation: Expected 2006: $75,601,135; Examples of programs receiving or expected to receive allocations: Economic development projects, infrastructure, education, job training, research, administration of the Tobacco Indemnification and Community Revitalization Commission. Program area: Health; Fiscal year allocation: 2005: $52,126,193; Fiscal year allocation: Expected 2006: $52,977,816; Examples of programs receiving or expected to receive allocations: Virginia Health Care Fund for support of the Medicaid program. Program area: Payments to tobacco growers; Fiscal year allocation: 2005: $20,000,000; Fiscal year allocation: Expected 2006: $13,710,000; Examples of programs receiving or expected to receive allocations: Indemnification payments to tobacco growers. Program area: Tobacco control; Fiscal year allocation: 2005: $13,031,549; Fiscal year allocation: Expected 2006: $13,244,454; Examples of programs receiving or expected to receive allocations: Public education campaigns to discourage tobacco consumption by minors, research, administrative budget of the Virginia Tobacco Settlement Foundation. Total; Fiscal year allocation: 2005: $130,315,484; Fiscal year allocation: Expected 2006: $188,977,945[A]. Source: Virginia Department of Planning and Budget. [A] Includes carry-over funds and interest earned. [End of table] Washington: Washington reported receiving $130,879,000 from MSA payments in fiscal year 2005 and expects to receive $131,000,000 in fiscal year 2006. Table 49: Washington's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $38,217,000; Fiscal year allocation: Expected 2006: $38,252,000. Program area: Health; Fiscal year allocation: 2005: $92,662,000; Fiscal year allocation: Expected 2006: $92,748,000; Examples of programs receiving or expected to receive allocations: Health services, including state match on optional children's Medicaid and State Children's Health Insurance Program; 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 allocation: 2005: $16,164,000; Fiscal year allocation: Expected 2006: $17,500,000; Examples of programs receiving or expected to receive allocations: Tobacco prevention and cessation. Total; Fiscal year allocation: 2005: $147, 043,000[A]; Fiscal year allocation: Expected 2006: $148,500,000[A]. Source: Washington State Office of Financial Management. [A] Includes carryover funds. [End of table] West Virginia: West Virginia reported receiving $56,495,804 from MSA payments in fiscal year 2005 and expects to receive $55,400,000 in fiscal year 2006. Table 50: West Virginia's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $0; Fiscal year allocation: Expected 2006: $30,000,000; Examples of programs receiving or expected to receive allocations: Worker's Compensation Debt Reduction Fund. Program area: Health; Fiscal year allocation: 2005: $19,549,408; Fiscal year allocation: Expected 2006: $20,078,744; Examples of programs receiving or expected to receive allocations: Institutional facilities operation. Program area: Reserves/rainy day funds; Fiscal year allocation: 2005: $28,247,902; Fiscal year allocation: Expected 2006: $0; Examples of programs receiving or expected to receive allocations: Medical Trust Fund. Program area: Tobacco control; Fiscal year allocation: 2005: $5,850,592; Fiscal year allocation: Expected 2006: $5,850,592; Examples of programs receiving or expected to receive allocations: Tobacco Education Program, Alcohol Beverage Control Administration's Tobacco Retailer Education Program. Program area: Unallocated; Fiscal year allocation: 2005: $2,847,902; Fiscal year allocation: Expected 2006: $0. Total; Fiscal year allocation: 2005: $56,495,804; Fiscal year allocation: Expected 2006: $55,929,336[A]. Source: West Virginia Department of Revenue-State Budget Office. [A] Includes carry-over funds and interest earned. [End of table] Wisconsin: Wisconsin reported receiving $132,054,977 from MSA payments in fiscal year 2005 and expects to receive $138,929,751 in fiscal year 2006. Table 51: Wisconsin's MSA Payment Allocations: Program area: Debt service on securitized funds; Fiscal year allocation: 2005: $132,054,977; Fiscal year allocation: Expected 2006: $138,929,751. Total; Fiscal year allocation: 2005: $132,054,977; Fiscal year allocation: Expected 2006: $138,929,751. Source: Wisconsin Department of Administration. [End of table] Wyoming: Wyoming reported receiving $15,827,492 from MSA payments in fiscal year 2005 and expects to receive $15,827,492 in fiscal year 2006. Table 52: Wyoming's MSA Payment Allocations: Program area: General purposes; Fiscal year allocation: 2005: $261,245; Fiscal year allocation: Expected 2006: $261,245; Examples of programs receiving or expected to receive allocations: Alcohol compliance, attorney. Program area: Health; Fiscal year allocation: 2005: $6,918,275; Fiscal year allocation: Expected 2006: $6,918,275; Examples of programs receiving or expected to receive allocations: Substance abuse treatment and prevention and intervention services. Program area: Social services; Fiscal year allocation: 2005: $2,967,736; Fiscal year allocation: Expected 2006: $2,967,736; Examples of programs receiving or expected to receive allocations: Drug court-related juvenile and family mentoring, community services, day care, intensive supervised probation. Program area: Tobacco control; Fiscal year allocation: 2005: $5,680,236; Fiscal year allocation: Expected 2006: $5,680,236; Examples of programs receiving or expected to receive allocations: Tobacco prevention, regional prenatal programs, community tobacco prevention activities, tobacco cessation, media. Total; Fiscal year allocation: 2005: $15,827,492[A]; Fiscal year allocation: Expected 2006: $15,827,492[A]. Source: Wyoming Department of Health, Substance Abuse Division. [End of table] [End of section] Appendix V: GAO Survey on States' Allocations of Fiscal Years 2005 and 2006 MSA 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: In addition to the contact named above, Charles M. Adams, Assistant Director; Beverly Peterson; Bernice H. Dawson; Chuck Bausell; Kevin Bray; Stuart Kaufman; and Alison O'Neill made key contributions to this report. (360634): FOOTNOTES [1] Under these agreements, tobacco companies will pay these four states $40 billion over 25 years. [2] Previously known as Philip Morris Incorporated. [3] A number of tobacco companies have joined since the agreement was signed. [4] For additional information on the agreement, refer to our June 2001 report on the MSA, GAO, Tobacco Settlement: States' Use of Master Settlement Agreement Payments, GAO-01-851 (Washington, D.C.: June 29, 2001). [5] Total payments were originally estimated at over $200 billion through 2025, but this estimate does not take into account adjustments in tobacco companies' payments that have or will occur. [6] The bonds for Oregon, 1 of the 15 states, were not securitized with tobacco settlement payments. [7] While the District of Columbia and the five U.S. territories are included in the agreement, this study reports only on the 46 states that signed the agreement. [8] GAO, Tobacco Settlement: States' Allocations of Phase II Funds, GAO- 03-262R (Washington, D.C.: Dec. 3, 2002); GAO, Tobacco Settlement: States' Allocations of Fiscal Years 2002 and 2003 Master Settlement Agreement Payments, GAO-03-407 (Washington, D.C.: Feb. 28, 2003); GAO, Tobacco Settlement: States' Allocations of Fiscal Year 2003 and Expected Fiscal Year 2004 Payments, GAO-04-518 (Washington, D.C.: Mar. 19, 2004); and GAO, Tobacco Settlement: States' Allocations of Fiscal Year 2004 and Expected Fiscal Year 2005 Payments, GAO-05-312 (Washington, D.C.: Mar. 21, 2005). [9] GAO-01-851. [10] 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. [11] 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. [12] GAO-01-851, GAO-03-407, GAO-04-518, and GAO-05-312. [13] Categories include such areas as education, health, budget shortfalls, and debt service on securitized funds. [14] There is a possibility that this amount could be reduced because of certain provisions in the MSA. In April 2006, participating manufacturers might withhold as much as about $1.1 billion from their expected payments for fiscal year 2006 because the MSA was found to be a significant factor in the 7.9 percent decline in their share of the cigarette market over several years following the MSA. However, according to an official from the National Association of Attorneys General, the participating manufacturers are not entitled to withhold funds from expected payments, and any reductions to 2006 payments, based on manufacturers' market share loss, would be provisional pending determinations that each state enacted and diligently enforced a statute provided in the MSA designed to counterbalance the effects of the MSA by requiring nonparticipating manufacturers to pay funds into escrow. [15] Fiscal year refers to the state's fiscal year. [16] 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 MSA funds. [17] See appendix V for a copy of the survey that we sent to each of the 46 states. [18] The National Association of Attorneys General monitors the actual payments made to states, as determined by an independent auditor. [19] As we reported in 2001, California counties, four California cities, New York counties, and New York City each receive a share of MSA payments. [20] GAO-01-851, GAO-03-407, GAO-04-518, and GAO-05-312. GAO's Mission: The Government Accountability Office, the investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO's commitment to good government is reflected in its core values of accountability, integrity, and reliability. 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