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Extra tobacco settlement money could help N.H. balance this year’s budget

A long-running legal dispute over settlement payments by tobacco companies has been resolved, state officials announced yesterday, freeing up money that could help New Hampshire balance its budget this year.

Through the end of March, the state’s revenues were running $14.5 million below projections. Gov. Maggie Hassan had asked the Legislature for authority to raid dedicated state funds to close any deficit for the fiscal year that ends June 30.

But Hassan, a Democrat, said yesterday that the roughly $15 million in extra tobacco settlement money now available could make that plan – which was unpopular with Republicans – moot.

“These dollars will be key to addressing the projected fiscal year 2013 deficit, and could help eliminate the need for alternative plans under consideration,” Hassan said in a statement.

That could create an additional headache, though, since the House earlier this month passed a state budget for the next two years that counts on $24.1 million in extra tobacco settlement cash.

House budget writers were trying to account for possible delays in resolving the legal dispute, “and I guess there were no delays, which is good news,” said Rep. Mary Jane Wallner, a Concord Democrat and chairwoman of the House Finance Committee.

The Senate Finance Committee is now working on the budget, and House and Senate negotiators are expected to hammer out a final budget in June. Using extra tobacco money this year, instead of next year, would leave a hole to be filled in the next budget.

“We’ll have to look at it when we get to committee of conference and see how we deal with it,” Wallner said.

In 1998, the big U.S. tobacco companies agreed to make annual payments to 46 states, including New Hampshire. Since 2006, some of the money has been withheld over a dispute about the treatment of the tobacco companies that didn’t participate in the settlement by several states.

This year, the Legislature fast-tracked passage of a bill allowing the attorney general’s office to join a multistate resolution of the dispute. Yesterday, outgoing Attorney General Mike Delaney announced New Hampshire and 19 other states had reached an agreement with the tobacco companies to end the fight.

As a result, the state will get a lump-sum payment of the withheld payments, then pay part of it back over five years, according to Associate Attorney General Richard Head.

The bottom line, Head said, is that the state gets about $15 million more than expected this year. It will have to pay some money back to the tobacco companies for the next four years, but he said the amount to be paid back is similar to the amount that they’ve withheld annually since 2006.

All in all, “it’ll look about the same as what we’ve received over the last few years,” Head said.

(Ben Leubsdorf can be reached at 369-3307 or or on Twitter @BenLeubsdorf.)

Legacy Comments6

Contrary to popular opinion, since the days of Mel Thomson we have funded our operating budgets on a series of questionable but legal gimmicks. We have a quaint saying of "no new taxes" but that is simply because we call them fees. We have the quaint Mediscam system of exploiting Washington for medicaid taxes on hospitals and we have the whole Tobacco settlement fraud. The tobacco settlement was supposed to help with smoking cessation programs and to cover increased health costs related to smoking. NH has directed it's share to the general fund except for fiscal year 2008-09 when they allocated $4 million. That is a total of $4 million since 2003 of the $1,304,689,150.27 that NH has received as of 2012.. This is not a democratic or republican slight-of-hand, it is a NH one. So the next time you cut and paste tax and spend democrats into a comment, remember you are fooling nobody. You only have to scratch the surface of politics to see that there is no difference except for the rhetoric.

I thought this money was supposed to used for smoking prevention, not balancing the budget. Oh well, thats what nice about NH, we can vote them out every 2 years.

Is this money supposed to be used to balance the budget?

The original intention was to fund smoking cessation programs and recover smoking related healthcare costs. So in other word, yup all goes to balancing the budget.

That's what I thought.

the tax and spend democrats now plan on running the state on gambling and tobacco taxes........the typical democrat formula for fiscal stability.....seriously why does anyone vote for this ilk

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