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Vermont Legislature
Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Vermont Snags $28 Million Windfall In Settlement With Tobacco Companies

Attorney General TJ Donovan at a podium
Peter Hirschfeld
VPR File
Attorney General TJ Donovan announced a $28 million settlement with tobacco companies Thursday. Gov. Phil Scott and legislative leaders say they'll use $14 million to combat the state's opioid problem. They have yet to decide how to spend the remainder.

A legal settlement with tobacco companies has resulted in a financial windfall for the state of Vermont.

Elected officials gathered in Montpelier Thursday afternoon to announce that the state will get a $28 million lump sum payment as part of a settlement with tobacco companies.

Vermont already gets between $22 million and $29 million a year as part of a 20-year-old settlement with the tobacco companies. The settlement announced on Thursday is a one-time, lump sum check on top of those annual payments.

By the time statewide elected officials announced this windfall, they’d already decided how to spend a good chunk of it.

“Half of that $28 million, approximately $14 million, will go to address the issue of addiction in our state,” says Attorney General TJ Donovan, whose office negotiated the deal.

Donovan says when the state inked the initial “Master Settlement Agreement” with tobacco companies back in 1998, tobacco products posed the single greatest threat to public health in Vermont. Today, he says opioids have taken over that distinction.

"Right now we're trying to pick our heads up from the details of the budget and look at some of the broader opportunities of the best way to invest this for Vermont's future. — House Speaker Mitzi Johnson

Gov. Phil Scott says the $14 million infusion into Vermont’s substance abuse programs will save lives and repair families.  

“In the coming days and weeks, we will be working to identify the most impactful ways to invest these dollars across all four legs of the stool,” Scott says.

According to Scott, those four legs are “prevention, treatment, recovery and enforcement.” But lawmakers and the governor have yet to decide precisely which substance abuse programs to invest in.

Also unclear at this point is what happens to the remainder of the windfall.

“That’s to be determined,” Scott says. “Obviously we have some thoughts. This was news to us this week, the settlement that came forward.”

State Treasurer Beth Pearce was on hand for the announcement on Thursday, and she couldn’t resist offering her own suggestion.

“I will put in a little bit of a push that the pension monies could use a little dollars there,” Pearce says.

It won’t take long for other constituencies to begin making their own pleas for a share of the newfound dollars.

The Vermont House will have to make some decisions about how that money should be spent sooner than later. That’s because the House Committee on Appropriations is putting the final touches on its budget this week.

“So right now we’re trying to pick our heads up from the details of the budget and look at some of the broader opportunities of the best way to invest this for Vermont’s future,” says House Speaker Mitzi Johnson.

Finding consensus on that question will add yet another layer of complexity to budget negotiations this year between the Republican governor and Democratically controlled House and Senate.

The Vermont Statehouse is often called the people’s house. I am your eyes and ears there. I keep a close eye on how legislation could affect your life; I also regularly speak to the people who write that legislation.
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