Chris Rizo Jun. 8, 2008, 5:11pm
Atty. Gen. Catherine Cortez Masto
Gov. Jim Gibbons
Lt. Gov. Brian Krolicki
CARSON CITY, Nev. (Legal Newsline)-A plan to securitize Nevada's tobacco settlement payments to help plug a $1 billion revenue shortfall could jeopardize future funds from the Master Settlement Agreement, Attorney General Catherine Cortez Masto warns.
In a letter to Republican Gov. Jim Gibbons, who is considering the plan, Masto said "at stake" is Nevada's future entitlement to tens of millions of dollars in payments from the settlement reached in 1998 between tobacco companies and 46 states.
Lt. Gov. Brian Krolicki, the former state treasurer, recently outlined the securitization plan. He said the one-time bond sale could generate $600 million.
Under the plan, the state would give up $1.25 billion in future settlement funds to get a roughly $600,000 lump sum, which proponents of the plan say will help the state avert deep budget cuts.
The bonds would be paid off over 23 years, and the state would incur no liability.
Nevada has received annual payments totaling more than $367 million since 2000.
Of the money the Silver State receives annually from the multi-state settlement, 40 percent currently goes to the state's Millennium Scholarship program, which provides scholarships to students who go to Nevada colleges and universities.
The remaining funds go to help bankroll various public health programs and services.
Krolicki, a Republican, says other funding sources can be found for the programs.
The Master Settlement Agreement was to reached to settle lawsuits that state attorneys generalfiled to recover government costs associated with people who became ill from smoking or tobacco-related illnesses.
The settlement agreement was reached originally by the nation's four largest tobacco companies: Philip Morris USA, R. J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corp., and Lorillard Tobacco Company.
More than 40 other tobacco companies later joined the agreement.
From Legal Newsline: Reach reporter Chris Rizo by e-mail at email@example.com.