House passed version of the bill last week - Senate panel kills bill to sell tobacco payout
RICHMOND - A suspicious Senate Finance Committee effectively killed legislation Tuesday that would have allowed Virginia to sell half of its stake in the national tobacco settlement to investors and use the proceeds to assist farmers and tobacco-dependent
The committee's decision had less to do with the merits of the proposal than it did with the ongoing budget battle between the Senate and Gov. Jim Gilmore.
Sen. William Wampler, R-Bristol, said committee members were concerned Gilmore would amend the legislation (HB 1726 and 1727) to propose the sale of Virginia's entire settlement share, a plan the panel already has rejected.
"If the governor would say he would sign a 50 percent bill, we would have reported it" to the full Senate, Wampler said.
The sale would have generated a revenue windfall of about $580 million, which would have gone to a trust fund to compensate growers and support economic development initiatives in communities hurt by the decline of the state's tobacco industry. Supporters of the plan said the trust fund would guarantee a more reliable source of income than settlement payments received in annual installments of $73 to $93 million over 20 years.
The House of Delegates approved the plan last week. But no one on the Senate Finance Committee would even second a motion to consider the bills Tuesday. Del. Ted Bennett, D-Halifax County, called the committee's rejection "very disappointing."
"It points out why our farmers are more afraid of the General Assembly than the tobacco companies," he said.
Bennett is a member of a bipartisan commission of lawmakers, government officials and farmers that has the responsibility of spending half of the state's settlement money. A separate panel controls the 10 percent set aside for anti-smoking programs, and the full General Assembly puts the remaining 40 percent into the state's general fund.
Gilmore wanted to sell the state's entire 20-year settlement share, including the 40 percent controlled by the legislature. That amount - an estimated $460 million - would have gone to a trust fund for college building projects and economic development programs. It also would have allowed the state to hit a revenue target needed to trigger the next phase of the car-tax reduction.
Wampler said Gilmore could have made another attempt at selling the entire settlement if the Senate sent him the bill that died Tuesday.
"If you give him a bill that has 50 percent in it, he can amend it to 100 percent," Wampler said.
Bennett called Wampler's rationale "spurious" and said lawmakers would have killed any attempt by the governor to amend the legislation.
"This is just very, very bad policy," Bennett said. "I don't understand the Senate's recalcitrance."