The Arkansas Board of Finance last week approved a new plan for investing the state’s allocation of tobacco settlement funds that could bring in an additional $1 million a year in interest.
Arkansas has received $476 million from the Master Settlement Agreement since 2000. The state Tobacco Settlement Commission oversees the money, and allocates it among seven health-related programs.
The commission is funded by interest earned by the $100 million currently in the settlement fund.
The commission asked the Finance Board to move $92 million from a money market account and move it into one- to six-month certificates of deposit. The state will keep $9.7 million in the money market account.
The chief investment officer for the state treasurer’s office said the move would boost earnings on the tobacco settlement money to slightly more than $1 million a year.
The fund earned $49,000 in interest in fiscal 2010.
The money comes from the 1998 MSA between tobacco companies and 47 states, which is expected to total $206 billion over 25 years.
Arkansas receives approximately $60 million a year as its share of the settlement.
Guidelines for how the settlement money is allocated were approved by Arkansas voters in 2000.
