Tobacco Settlement Funds to Help Pay Debt
The county would use $912 million it is receiving from the national tobacco settlement to pay off bankruptcy debts and to build jail beds and other projects, according to plans unveiled Tuesday by the county’s chief financial officer.
The proposal won a favorable reception from the Board of Supervisors, which on Tuesday also added two law enforcement projects to its long-term priority list: a 390-bed juvenile hall in the south county and a facility for inmates with drug and alcohol problems.
The county is scheduled to receive $30 million to $38 million per year from the tobacco settlement until 2025. Chief Financial Officer Gary Burton wants the county to create a nonprofit organization that would issue bonds based on the settlement revenues. The county would use proceeds from the bond sale, along with other savings, to pay off nearly $560 million in debts incurred when it emerged from bankruptcy in 1996.
Paying off bankruptcy debt ahead of schedule, officials added, allows the county to avoid large interest payments.
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