State will get tobacco money for Millennium Scholarships
April 15, 2003
Nevada and other states in the tobacco settlement will get their April tobacco money after all.
Philip Morris USA, the largest U.S. cigarette maker, announced it will be able to pay the states $2.6 billion by today after an Illinois judge agreed not to demand a $12 billion bond from the company to appeal a class action lawsuit over “light” cigarettes.
That means Nevada will get its $16 million sometime today, ensuring there is sufficient funding to continue tobacco-settlement programs.
State Treasurer Brian Krolicki said that is good news for Millennium Scholars, people covered under the Senior Rx program and others who receive benefits from the tobacco settlement.
But Krolicki said the situation points out the need for changes such as securitization of the tobacco money to eliminate the chance the fund could be reduced or cut off.
“We need to shift this burden to the marketplace by securitizing our portion of the master settlement agreement,” said Krolicki.
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Instead of $12 billion, the Illinois judge agreed to allow Philip Morris to put its existing $6 billion bond into escrow pending resolution of the appeal, and to accept another $800 million in cash from the cigarette maker.