Ark. weighs bonds as one option for tobacco share
An Arkansas House committee began exploring this week how to manage the state's $1.6 billion share of the national tobacco settlement, including the option of selling bonds backed by future tobacco revenues.
``I think they're taking (tobacco bonds) more seriously, that it is a viable option to look at,'' Bridgette Pool, Arkansas House counsel, said.
The House Tobacco Settlement Task Force, formed by House Speaker Bob Johnson, held its first meeting on Wednesday.
James Haddon, a managing director in Salomon Smith Barney's public finance department, addressed the committee on different financing options for the tobacco money, including securitization and placing the money in various types of trust funds, Pool said. Salomon was hired by New York City and Nassau County, N.Y., to underwrite their tobacco securitization deals.
Pool said some Arkansas legislators mistakenly believed tobacco bonds would require a full faith and credit pledge from the state. Now that they realize a bond issue can be structured without a risk to the state, that the tobacco money would decline in the future, ``There are a lot more open minds,'' Pool said.