BATON ROUGE, LA (WAFB) - State officials have filed a legislation that will assist in funding TOPS and coastal projects.
Friday, Representative Bryan Adams filed a legislation that would allow the Tobacco Settlement Financing Corporation to issue bonds for 40 percent for the state's tobacco settlement revenue. The bonds would generate between $30 million and $60 million a year for TOPS through the year 2023 and $430 million for coastal projects and restoration.
In 2001, to offset declining tobacco revenue, the legislature approved issuing bonds for 60 percent of the state's tobacco settlement revenues. The original bonds are expected to be paid off within the next 10 years which would allow those settlement revenues to be available for investments.
"With cigarette taxes increasing, smoking bans becoming more popular and the rise of e-cigarettes, there's a real potential for revenue losses to states," says Adams. "It's time for Louisiana to consider transferring its risk to bondholders."
Due to looming state budget cuts, some state lawmakers recently proposed a cap on TOPS and removing automatic increases in TOPS rewards.
Louisiana coastal restoration funding is currently at risk under President Barack Obama's proposed spending plan that would scrap plans for gulf states to share in offshore oil royalties that included and estimated $170 million for Louisiana.
"There is a lot of uncertainty around the future of tobacco use," says Commissioner of Administration Kristy Nichols. "This option allows us to reduce our risk, create a long-term revenue source for TOPS and generate additional revenue for coastal restoration. It's a net positive for the state and something we encourage the Legislature to consider."
The sale of the bonds must be approved by the State Bond Commission, the Joint Legislative Committee on the Budget and the full Legislature before bonds can be issued.