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N.H. Receives $14M Tobacco Settlement

Hassan Wants to Put Funds Toward Budget, GOP Disagrees

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, D-Concord, 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 repay part of it 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.