Tobacco Facts.

The commission assigned to examine New Hampshire state properties for possible sale or lease is taking a closer look at another option — borrowing against tobacco settlement money to plug a budget hole.

The commission, established by the Legislature this year, has to make recommendations to bring in $60 million to help close a $295 million budget gap. Its final report is due Jan. 1.

Members examined an analysis Thursday of how money New Hampshire gets from a nationwide settlement with tobacco companies could be used to fulfill the $60 million goal. Currently, the state gets more than $40 million a year in payments.

Under a proposal outlined by state Treasurer Catherine Provencher, a commission member, the state would issue 20-year bonds backed by future tobacco settlement payments. The state would pay about 16 percent of those future payments to make up the amount. Provencher said the amount would be paid off in 13 years.

“It’s a tangible item at this time,” said Commission Chairman Lou D’Allesandro. “Tobacco is the one thing on the table that does produce revenue for us.”

The use of tobacco settlement money to help fill the budget gap would require legislative approval. Such proposals have been brought up in the past in New Hampshire to balance the budget, but they were not popular, partly due to doubts over whether the revenue amount would remain constant.

“Many states have done this in the past; many states are looking at it as we speak,” D’Allesandro said.

The commission has been looking at possible properties to sell or lease since it started meeting in August, but has run into some obstacles. For example, not all properties have a current market value. Other properties need multiple agencies to approve their sale, or they’re blocked for sale by statute or some other complication.

One property the commission plans to visit on Oct. 11 is the site of the former Laconia State School, a group of over 20 buildings from the turn of the century that served as an institution for children and adults. It closed in 1991. The commission also plans to meet with city officials in Concord to identify properties. It also has plans to reach out to other communities across the state.

The commission’s assignment was brought up on Monday during the first debate between Republican gubernatorial candidate John Stephen and Gov. John Lynch. Stephen accused Lynch of using accounting gimmicks and one-time money to balance the budget. He pointed out that “not one piece of land has been sold yet” for the $60 million fix.

Lynch didn’t specifically comment on the property sale issue, but he said state auditors concluded that spending has gone down in his administration and the state has shown strong fiscal management.

By KATHY McCORMACK
Businessweek

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