Virginia Senate Committee Kills Tobacco Bond Plan
NEW YORK (Reuters) - Virginia's Senate Finance Committee on Friday rejected a plan by Gov. James Gilmore to sell tobacco settlement-backed bonds, a spokeswoman in the governor's office said.
Although the plan passed in the Assembly, the Senate Finance Committee's quash of the proposal kills the plan for this legislative session, which ends on Saturday, said Lila White, a spokeswoman for the governor.
Gilmore had called for a securitization of 50 percent of the revenues the state will receive from a national settlement with tobacco companies, which would amount to about $811 million.
The bonds would have created a permanent trust fund and a source of funds for economic development in the tobacco-dependent communities in Southeast and Southwest Virginia.
``Members of the Senate Finance Committee are clearly indifferent to Virginia's tobacco farming communities,'' Gilmore said in prepared remarks.
``Their vote to kill my plan to securitize 50 percent of the Master Tobacco Settlement effectively increases the financial risks associated with depending on an unstable, 20-year revenue source,'' Gilmore said.
Sen. John Chichester, chairman of the Senate Finance Committee, was unavailable for comment.