CLOSING NEWS
United States
In a continuation of a story Tobacco Asia ran a few issues back, Louisiana Gov. Bobby Jindal’s administration is moving ahead with a plan to sell the state’s remaining share of the huge tobacco settlement, despite criticism the move would waste a valuable asset for a quick fix to budget problems.
A board that oversees the settlement agreed to the idea, though several more approvals will be needed before a sale. Treasurer John Kennedy objected, saying the plan is driven by desperation to find money for a budget deep in the red.
As Jindal has stuck to a pledge against raising taxes, he and lawmakers have refused to match the state’s spending to its revenue. They have plugged budget holes with short-term financing like money from property sales, legal settlements and trust funds, creating shortfalls year after year. Kennedy called the tobacco plan more of the same maneuvering, as the state faces a US$1.6 billion budget gap next year. Kristy Nichols, the commissioner of administration, said the Jindal proposal did not involve a one-year cash infusion, but $750 million that could be spent over eight years, mainly to pay for Louisiana’s free college tuition program.
The state sold 60% of its settlement to investors for US$1.2 billion in 2001.