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Some plain talk on cash crisis  

Paterson, a former Senate Democratic leader, and Sampson clashed in public for the second time in just over a month. The Senate leader suggested that refinancing tobacco bonds could generate $500 million (that move, however, would add to long-term costs). Tobacco bonds are payments the state makes in return for up-front cash it received from federal tobacco lawsuit settlements.

Paterson called the idea a "non-starter" and, after the meeting, said the notion represented "phony revenues."

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Paterson Shoots Down Senate Plan 

In a public meeting with legislative leaders, Governor Paterson shot down a plan floated by Senate democrats to refinance tobacco settlement bonds. New York State is facing a $3 billion deficit, and needs to come up with revenue quickly. Senators predict their tobacco proposal could raise $500 million. But Paterson says the money isn't guaranteed and couldn't come fast enough to pay bills due this December.

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New York Faces December Cash Squeeze, Governor Says (Update1)  

Tobacco Bonds

The tobacco bonds are backed by remuneration from tobacco companies to settle lawsuits and appropriations by the Legislature if those payments aren’t sufficient, according to the official statement for bonds sold in 2003. The sale of the bonds, to close a deficit in 2003, led to a reduction in the state’s bond rating by Standard & Poor’s. . . .

New York’s Local Government Assistance Corp., backed by sales tax receipts, or the Tobacco Settlement Financing Corp., backed by tobacco company payments to settle lawsuits, have about $7.44 billion of debt outstanding. Bondholders are scheduled to receive payments of $891 million in the year ended March 31, 2010, according to the state’s annual information statement.

The Senate Democrats’ proposal for the tobacco bonds would have the state sell new bonds with a thinner cushion of excess payments from tobacco companies than exists for the bonds sold in 2003, said Travis Proulx, a spokesman for Sampson. That would allow the state to sell $500 million of additional bonds, with the exact amount depending on how much of projected payments by tobacco companies the state wants to pledge to bondholders.

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McConnell tapped tobacco war chest to fund 9-year lead paint battle 

For nine years prospective federal judge nominee Jack McConnell battled paint makers with boundless powers he received from attorneys general he helped elect.

As he awaits the nomination process, McConnell, of the Motley Rice firm in Providence, continues in his role as Rhode Island Democratic Party treasurer.

Had he been successful in carrying out the mammoth lead paint abatement plan he devised in 1999, and which fell apart last year, McConnell and other lawyers would have shared hundreds of millions in fees, maybe billions.

According to court records, the abatement plan would have bulldozed Rhode Island from end to end. State and federal housing laws and regulations that would forbid entering properties without warrants would have been suspended. . ..

The firm identifies him as negotiator and primary drafter of the master tobacco settlement agreement of 1998.

Whitehouse explained to reporters that the state wouldn't spend any money on lead abatement because Motley Rice had "a big war chest from the tobacco litigation," according to a report in the Providence Journal.

"McConnell brings horses in a big way," Whitehouse said. "He's part of a great firm with very deep pockets."

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• Texas lost $19.5 million to Madoff 

The Texas treasury lost $19.5 million through an investment in the Ponzi scheme run by convicted financial swindler Bernard Madoff.

The money was part of a $224.5 million investment the Texas Treasury Safekeeping Trust Co. had with a Texas-based hedge fund called Austin Capital Safe Harbor. Austin Capital closed in May due to losses it suffered in one of Madoff's scam investment funds.

Comptroller Susan Combs chairs the Treasury Safekeeping Trust, which manages $50 billion in tobacco lawsuit settlement funds, TexPool investments for 2,000 local governments and Treasury Pool for managing state funds.

Combs spokesman R.J. DeSilva said the $19.5 million was written off last December after Austin Capital notified the state the money had been lost when Madoff's Ponzi scheme collapsed. The treasury had been investing with Austin Capital since 2006.

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Ohio Judge’s Ruling Represents an Important Step Toward Preserving Tobacco Funds, Protecting the Health of Ohioans  

Today in Columbus, Ohio, Judge David Fais of the Franklin County Court of Common Pleas permanently enjoined the State from dissolving the endowment of the Ohio Tobacco Prevention Foundation (OTPF). This decision is a major step forward in the effort spearheaded by the American Legacy Foundation's to safeguard the state's tobacco prevention money for its intended purpose: to save Ohioans' lives. Two Ohioans were also plaintiffs in the case: Robert Miller and David Weinmann, both longtime smokers who relied on services and programs supported by the Ohio Tobacco Prevention Foundation to quit smoking, brought claims on behalf of the intended beneficiaries of OTPF - Ohio smokers.

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• Lawyer denies shop makes cigarettes 

The state says a Brookline business that sells loose tobacco to customers who roll their own cigarettes on machines inside the shop is a cigarette manufacturer and is obligated to pay into a tobacco settlement fund.

But an attorney for North of the Border Tobacco, which operates under the name Tobacco Haven, told a Merrimack County Superior Court judge Tuesday that his client isn't manufacturing cigarettes and should not be obligated to pay.

Judge Larry Smukler heard arguments in the case and will issue a ruling in the next 30 to 60 days. In August, the New Hampshire attorney general's office cited the small business for possible violation of state laws, saying a violation might put the state at risk of losing millions of dollars in tobacco settlement funds.

Assistant Attorney General David Rienzo, who works for the consumer protection and antitrust bureau, said the case was the first in the state and possibly the country.

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• Governor blasted over anti-smoking program cuts 

A leading researcher of secondhand smoke sharply criticized the governor and the Legislature on Wednesday for cutting tobacco-control programs nearly in half, saying the cost to the health-care system will quickly overcome any short-term savings.

"Gov. Gregoire is no longer the anti-tobacco governor," Stanton Glantz, professor of cardiology at the University of California, San Francisco, told a group of public health professionals meeting at the Yakima Convention Center.

"The fact that she let the program be gutted means she's just riding on the old coattails."

Gov. Chris Gregoire made her name as state attorney general in 1998 by leading the states in negotiating a master settlement with tobacco companies that poured billions into state coffers nationwide.

That settlement still brings in about $120 million a year to Washington state, with most going to pay for state-subsidized health care.

But the 2009 Legislature cut 43 percent from the state's $28.5 million-a-year tobacco-control program

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Gregoire criticized for anti-smoking cuts 

A leading researcher of secondhand smoke says Gov. Chris Gregoire is no longer the anti-tobacco governor.

Stanton Glantz is a professor of cardiology at the University of California, San Francisco, who spoke Wednesday to a group of public health professionals meeting at the Yakima Convention Center.

He criticized the governor and the Washington Legislature for cutting tobacco-control programs.

"The fact that she let the program be gutted means she's just riding on the old coattails," Glantz said. . . .

Gregoire spokesman Glenn Kuper told The Yakima Herald-Republic that she instilled a culture of tobacco prevention in the state but many programs had to be cut because of the budget shortfall.

"We have tougher indoor smoking laws, adult smoking rates are down more than 30 percent, and youth smoking overall has dropped by about half," Kuper said.

The big tobacco settlement still brings in about $120 million a year to Washington state, with most going to pay for state-subsidized health care.

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LETTER: It should matter to officials that anti-smoking efforts work  

As a chemical dependency therapist, a cardiac rehab specialist and a smoking cessation specialist, I am appalled that settlement funding is being reduced for prevention and cessation programs ("State Cuts Imperil No-Smoking Efforts," Sept. 28). What is the logic behind this? . . .

When prevention programs reach youth and make an impact on a young person's life, why doesn't this matter? When someone with heart disease quits smoking and increases her survival rate, why doesn't this matter? When a group member announced that she can walk up a hill since quitting, why doesn't this matter?

I ask someone why doesn't any of this matter? What is the logic?

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State cuts imperil no-smoking efforts 

Faced with a 50 percent cut in state funding, Tobacco Free Allegheny plans to dismantle nine of its 12 contracted programs after Wednesday.

"Should the budget materialize with full funding, we can restore the programs, but we're not overly optimistic that will happen," Executive Director Cindy Thomas said.

"We're spending at the rate of a full budget -- we thought we were getting just over $2.1 million. If the cut goes through ... we'll only have $1 million for the year."

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MINOTT: Pennsylvania's smoking prevention programs on the budget chopping block  

In 1998, Pennsylvania's attorney general settled a lawsuit with the country's major tobacco companies recovering some of the financial burden imposed by the industry's predatory practices. Big Tobacco was made to pay $11.3 billion over 20 years.

In 2001, the Pennsylvania Legislature passed Act 77 that allocated that money to various health care concerns. Almost all of the funds went to offset the costs of gaps in insurance and into supporting research. Only a small portion was dedicated to preventing tobacco use among children and helping adults stop smoking.

Despite the minimal allocations, Pennsylvania's smoking cessation and prevention programs have been extremely successful. . . .

What is particularly frustrating is that the tobacco settlement fund is designed specifically to address the harms caused by tobacco and yet those are the programs being cut so the money can be used elsewhere. Joseph Otis Minott The proposed budget before the Pennsylvania Legislature that drastically cuts smoking cessation and prevention programs will only add to the continuing health care crises in Pennsylvania.

As someone who has spent decades working to protect the environmental health of Pennsylvanians, I have been calling, writing and e-mailing Pennsylvania's legislators to beg them not to make these shortsighted cuts.

Most offices are not aware of the proposed cuts and seem to understand why they are a bad idea. Every so often, I get "we had to make cuts somewhere."

This is not an acceptable answer.

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Tobacco settlement grant transferred from SOCAG to Health Department  

Jackson County Commissioners held their regular meeting on at 10 a.m. Tuesday in the Commissioners’ Office in the Jackson County Courthouse. The minutes for the Sept. 14, Sept. 21, and Sept. 29 meetings , reports and blanket purchase orders were all approved.

The Jackson County Treasurer, Janet S. Wright introduced an item for consideration. This was the reinvestment or liquidation of a $500,000 certificate of deposit (CD) that was due on Sept. 30. With interest rates low everywhere right now, the commissioners voted to keep the money invested in a local bank, in a CD with an interest of rate of 1.1%. These funds are for the Sales Tax Revolving Fund.

Holly Grace Campbell, director of ACMI House was ill so Rick Crouch, public relations coordinator of Southwest Oklahoma Community Action Group, Inc. (SOCAG) was present to give information on the client-load of ACMI House. He said that ACMI house holds between 10-13 females and it is almost always full. Males in need of housing for domestic abuse are provided temporary housing in motel rooms. Domestic abuse, according to Crouch, is a much bigger problem than he thought it was.

In light of the serious nature of domestic violence, the commissioners approved a proclamation for “Domestic Violence Awareness Month” be recognized in October.

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New Jersey Tobacco Settlement Bonds Are Smoking: Chart of Day 

Now may be the time to sell your tobacco bonds.

The CHART OF THE DAY shows how one issue, the Tobacco Settlement Financing Corporation of New Jersey’s 5 percent bond due in 2041, has outperformed the Bond Buyer 40, a price index of long-term benchmark municipal debt, since the end of the first quarter of 2009. The New Jersey security gained 83 percent by the end of the third quarter, while the index rose 32 percent.

Long-term tobacco bonds, sold by states and municipalities to cash in on their shares of the 1998 settlement with cigarette makers, have rallied more than any other major segment of the municipal market this year, according to Bank of America Corp.’s Merrill Lynch & Co. About $37 billion of such bonds have been sold.

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• General Tobacco Appeals California Ruling 

MAYODAN, N.C. – General Tobacco (GT) announced that it has appealed the interpretation of the Master Settlement Agreement (MSA) by the Superior Court of California. The company also answered a claim by Arkansas Attorney General Dustin McDaniel seeking payments from General Tobacco for products it sold before joining the MSA.

The continuing legal issue in both matters involves the fairness of the MSA which dictates that later market entrants, such as GT, have to pay the states substantially more than certain competitors pay.

J. Ronald Denman, GT executive vice president, said none of the largest cigarette companies, which were sued by the states for decades of misleading the public about the harms of tobacco products, paid anything for pre-MSA sales.

“In addition, to induce some of the oldest tobacco companies to join the MSA, the states agreed to yearly sales exemptions giving those companies hundreds of millions of dollars in free sales. GT was offered no such exemption and must pay the MSA for every sale made each year,” he said in a press release.

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