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Remainder of money from Tobacco lawsuit to go towards TOPS - KATC.com | Continuous News Coverage | Acadiana-Lafayette

Remainder of money from Tobacco lawsuit to go towards TOPS

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The Tobacco Settlement Board votes to sell bonds with the remainder of the Tobacco lawsuit. The Tobacco Settlement Board votes to sell bonds with the remainder of the Tobacco lawsuit.

The remaining money Louisiana received from lawsuits against tobacco companies will now be going towards funding the TOPS scholarship program.

Louisiana is one of many states that received money in 1998 after lawsuits were filed against tobacco companies because of smoker deaths and health costs. In 2001, the Tobacco Settlement Board voted to sell 60 percent of the money received from the lawsuit in bonds, which generated $1.6 billion to go towards health costs, education programs and TOPS.

On Tuesday, the board voted 12-1 to sell the remainder of the lawsuit in bonds. The board estimates this move will generate about $750 million to go towards TOPS.

But not everyone supported of the decision.

From the moment the meeting started, state Treasurer John Kennedy voiced his opposition.

"You dangle $700 million in front of the Legislature right now and it will be spent as fast as green grass through a goose," Kennedy said.

Kennedy said he worries the money will end up going towards Medicaid, but state Commissioner of Administration Kristy Nichols, Gov. Bobby Jindal's top economic adviser, tried to assuage his fears.

"The Constitution provides that if we sell these bonds, that revenue has got to go to TOPS," Nichols said.

Many on the board said the decision is crucial before tobacco companies run out of money.

"There is risk with the consumption of tobacco going down," Nichols said. "That effectively puts our revenue stream that comes from the tobacco companies at risk."

Kennedy said he understands the risk, but still feels this is too rushed.

"I'm not against settling the income strain, I just want more time to study it," Kennedy said.

This decision is not set in stone yet. The sale has to be approved by the state bond commission. From there it goes to the Legislature and then, if approved, it goes back to the board for final resolutions.

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