Westchester Cty, N.Y., eyes $100 mln tobacco bonds
Westchester County, N.Y., Executive Andy Spano on Thursday proposed a $100 million bond issue backed by revenues from the county's share of a $206 billion national tobacco industry settlement with states.
Spano said he would send legislation to the Board of Legislators as early as next week calling for the county to securitize about $100 million of tobacco money that the county is expected to receive in the years 2011-2029.
Overall, Westchester County is slated to receive $480 million in payments from the tobacco settlement over 25 years.
The bond issue would provide tax relief for county residents next year, and in the future will offset a $40 million loss in state aid, Spano said.
``By coming up with an innovative plan to securitize the money we will get from the tobacco settlement, we can offset this hit from the state and additionally provide a $5 million tax decrease for our residents next year,'' Spano said in written remarks.
For the first 10 years of the settlement, the county would receive about $20 million of payments a year. Spano said the county would use that money to eliminate a financial obligation to the Westchester County Medical Center.
Spano said when he came into office, the county had a large financial burden to the medical center. The administration renegotiated the agreement and reduced the overall subsidy for a $185 million savings to taxpayers. With the tobacco revenues, the county's financial obligation can be reduced to zero, and at the same time, it would have money to help build a new Children's Hospital, he said.
Westchester County would follow in the footsteps of New York City and Nassau County, both of which plan to sell tobacco-backed bonds in November.