March 11, 2014
(Charleston-AP) -- Senators are unlikely to approve Gov. Wise's plan to use future tobacco settlement payments to get $630 million in upfront cash. That's what Senate President Earl Ray Tomblin predicts.
Tomblin says the state can't afford to lose annual payments it gets from the 1998 federal tobacco settlement. West Virginia faces a 120 million-dollar deficit next year and soaring deficits beyond that.
The state was promised about $2 billion in future tobacco payments. This year it is getting $56 million, an amount that's been dropping as cigarette sales decline. About half goes to the state budget.
Wise wants to use future tobacco payments to float a bond, then use the upfront cash to pay for future trooper and judge pensions. That would free the budget from $475 million in future pension payments -- $25 million next year. Without Wise's plan, soon annual pension payments would exceed the amount the state would collect in tobacco money.
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