The Senate Ways and Means Committee may exclude from projected revenues $24.1 million from a new settlement with tobacco companies.
This key component of the House budget was called into question today as the senators met to begin hammering out revenue estimates for their version of the 2014-2015 budget.
Testimony from Assistant Attorney General David Rienzo suggests the money may not be available in the next budget cycle because other states, those that are not parties to the new agreement, will seek to block it from taking effect. This led committee Chairman, Sen. Bob Odell, to suggest that it would be unwise to rely on such revenue in putting together the FY14-15 budget.
As passed on April 3, the House’s version of the budget expects that New Hampshire will receive, on net, $21.6 million in FY 2014 and $2.5 million in FY 2015 due to a new legal settlement with cigarette manufacturers. New Hampshire is one of roughly 30 states that have elected to settle a dispute with cigarette manufacturers over the enforcement of the 1998 master settlement agreement (MSA). This new agreement will likely yield a net lump sum payment for the state of about $17 million, with modest increases in the size of the annual payments the state currently receives.
The Office of the Legislative Budget Assistant had suggested to the House Finance Committee back in March that the state could receive payment as early as April 15, 2013.
But the timing of that lump sum payment appears uncertain. Consequently, the Senate’s version of the budget may have to reduce spending by that amount or compensate by generating additional revenue from other sources.