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The State of the Tobacco Settlement: Are Settlement Funds Being Used to Finance State Government Budget Deficits? A Research Note
Author(s) -
Johnson Craig L.
Publication year - 2004
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/j.0275-1100.2004.02401006.x
Subject(s) - settlement (finance) , state (computer science) , finance , securitization , government (linguistics) , economics , bond , business , state government , market economy , payment , linguistics , philosophy , algorithm , computer science , incentive
In the Master Settlement Agreement, the major U.S. tobacco companies agreed to pay approximately $229 billion between 1999 and 2025 to 46 states, the District ofColumbia, and five U.S. territories. The windfall raises important spending andfinancing decisions for state governments. This research note analyzes how governments are spending their settlement proceeds, especially whether states are using funds to finance current budget deficits, and investigates the financing practice by several states of selling their right to future settlement proceeds to support the issuance and repayment of tobacco securitization bonds.