Securitization of tobacco settlement payments to reduce states' conflict of interest

Health Affairs

Volumn 23, Issue 5, 2004, Pages 188-193

  Sindelar, Jody ^a,b   Falba, Tracy ^a,c  

^a YALE UNIVERSITY SCHOOL OF MEDICINE   (United States)

^b NATIONAL BUREAU OF ECONOMIC RESEARCH   (United States)

^c CENTURY ^*  (South Korea)

Author keywords

[No Author keywords available]

Indexed keywords

CONFLICT; ECONOMIC ASPECT; FINANCIAL MANAGEMENT; HEALTH; HEALTH CARE ORGANIZATION; MARKET; POLICY; PROSPECTIVE PAYMENT; REVIEW; TOBACCO INDUSTRY;

CONFLICT OF INTEREST; LIABILITY, LEGAL; STATE GOVERNMENT; TOBACCO INDUSTRY; UNITED STATES;

EID: 4644297093     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.23.5.188     Document Type: Review

References (22)

1. S.A. Schroeder, "Tobacco Control in the Wake of the 1998 Master Settlement Agreement," New England Journal of Medicine 350, no. 3 (2004): 293-301.
2. American Lung Association, "Securitization, Breaking the Promise" (New York: ALA, September 2002); Campaign for Tobacco-Free Kids, "Securitizing State Tobacco Settlement Payments: Myths versus Facts," tobaccofreekids.org/research/factsheets/pdf/0132.pdf (8 June 2004); Campaign for Tobacco-Free Kids, Show Us the Money: A Report on the States' Allocation of the Tobacco Settlement Dollars, January 2003, www.tobaccofreekids.org/reports/ settlements/2003/fullreport.pdf (9 June 2003); J. Kasprak, "Securitization of Tobacco Settlement Funds," OLR Research Report R-0736 (Hartford, Conn.: Connecticut General Assembly, 20 September 2002); and National Conference of State Legislatures, "Securitization of Tobacco Settlement Revenue," 18 April 2003, www.ncsl.org/programs/fiscal/securtsr.htm (8 June 2004).
3. American Lung Association, "Securitization, Breaking the Promise" (New York: ALA, September 2002); Campaign for Tobacco-Free Kids, "Securitizing State Tobacco Settlement Payments: Myths versus Facts," tobaccofreekids.org/research/factsheets/pdf/0132.pdf (8 June 2004); Campaign for Tobacco-Free Kids, Show Us the Money: A Report on the States' Allocation of the Tobacco Settlement Dollars, January 2003, www.tobaccofreekids.org/reports/ settlements/2003/fullreport.pdf (9 June 2003); J. Kasprak, "Securitization of Tobacco Settlement Funds," OLR Research Report R-0736 (Hartford, Conn.: Connecticut General Assembly, 20 September 2002); and National Conference of State Legislatures, "Securitization of Tobacco Settlement Revenue," 18 April 2003, www.ncsl.org/programs/fiscal/securtsr.htm (8 June 2004).
4. American Lung Association, "Securitization, Breaking the Promise" (New York: ALA, September 2002); Campaign for Tobacco-Free Kids, "Securitizing State Tobacco Settlement Payments: Myths versus Facts," tobaccofreekids.org/research/factsheets/pdf/0132.pdf (8 June 2004); Campaign for Tobacco-Free Kids, Show Us the Money: A Report on the States' Allocation of the Tobacco Settlement Dollars, January 2003, www.tobaccofreekids.org/reports/ settlements/2003/fullreport.pdf (9 June 2003); J. Kasprak, "Securitization of Tobacco Settlement Funds," OLR Research Report R-0736 (Hartford, Conn.: Connecticut General Assembly, 20 September 2002); and National Conference of State Legislatures, "Securitization of Tobacco Settlement Revenue," 18 April 2003, www.ncsl.org/programs/fiscal/securtsr.htm (8 June 2004).
5. American Lung Association, "Securitization, Breaking the Promise" (New York: ALA, September 2002); Campaign for Tobacco-Free Kids, "Securitizing State Tobacco Settlement Payments: Myths versus Facts," tobaccofreekids.org/research/factsheets/pdf/0132.pdf (8 June 2004); Campaign for Tobacco-Free Kids, Show Us the Money: A Report on the States' Allocation of the Tobacco Settlement Dollars, January 2003, www.tobaccofreekids.org/reports/ settlements/2003/fullreport.pdf (9 June 2003); J. Kasprak, "Securitization of Tobacco Settlement Funds," OLR Research Report R-0736 (Hartford, Conn.: Connecticut General Assembly, 20 September 2002); and National Conference of State Legislatures, "Securitization of Tobacco Settlement Revenue," 18 April 2003, www.ncsl.org/programs/fiscal/securtsr.htm (8 June 2004).
6. American Lung Association, "Securitization, Breaking the Promise" (New York: ALA, September 2002); Campaign for Tobacco-Free Kids, "Securitizing State Tobacco Settlement Payments: Myths versus Facts," tobaccofreekids.org/research/factsheets/pdf/0132.pdf (8 June 2004); Campaign for Tobacco-Free Kids, Show Us the Money: A Report on the States' Allocation of the Tobacco Settlement Dollars, January 2003, www.tobaccofreekids.org/reports/ settlements/2003/fullreport.pdf (9 June 2003); J. Kasprak, "Securitization of Tobacco Settlement Funds," OLR Research Report R-0736 (Hartford, Conn.: Connecticut General Assembly, 20 September 2002); and National Conference of State Legislatures, "Securitization of Tobacco Settlement Revenue," 18 April 2003, www.ncsl.org/programs/fiscal/securtsr.htm (8 June 2004).
7. California and New York issued bonds backed by general revenues of the state.
8. For more information on these choices, see National Governors' Association, "Analysis of Securitizing Tobacco Settlement Funds," State of Indiana, Working Draft (Washington: NGA, 21 December 1999); American Lung Association, "Securitizing Tobacco Settlement Funds Questions and Answers," 2003, www.californialung.org/spotlight/securitizing000710.html (8 June 2004); and E.M. Quigley, "Securitizing Tobacco Settlements: The Basics, the Benefits, the Risks," New England Fiscal Facts - Federal Reserve Bank of Boston no. 30 (Winter 2002/2003): 1-5.
9. For more information on these choices, see National Governors' Association, "Analysis of Securitizing Tobacco Settlement Funds," State of Indiana, Working Draft (Washington: NGA, 21 December 1999); American Lung Association, "Securitizing Tobacco Settlement Funds Questions and Answers," 2003, www.californialung.org/spotlight/securitizing000710.html (8 June 2004); and E.M. Quigley, "Securitizing Tobacco Settlements: The Basics, the Benefits, the Risks," New England Fiscal Facts - Federal Reserve Bank of Boston no. 30 (Winter 2002/2003): 1-5.
10. For more information on these choices, see National Governors' Association, "Analysis of Securitizing Tobacco Settlement Funds," State of Indiana, Working Draft (Washington: NGA, 21 December 1999); American Lung Association, "Securitizing Tobacco Settlement Funds Questions and Answers," 2003, www.californialung.org/spotlight/securitizing000710.html (8 June 2004); and E.M. Quigley, "Securitizing Tobacco Settlements: The Basics, the Benefits, the Risks," New England Fiscal Facts - Federal Reserve Bank of Boston no. 30 (Winter 2002/2003): 1-5.
11. F. Modigliani and M. Miller, "The Cost of Capital, Corporation Finance, and the Theory of Investment," American Economic Review 48, no. 3 (1958): 261-297.
12. T. Falba, A. Snyder, and J. Sindelar, "The Effects of Securitizing MSA Funds on Tobacco Control Activities by State" (Unpublished manuscript, Yale University, 2004).
13. "Philip Morris Asks Illinois Court to Cut Bond for Appeal," 4 April 2003, www.tobacco.org/news/122134.html (8 June 2004); "Illinois Tobacco Judgment Threatens Kentucky's Budget," Kansas City Star, 1 April 2003; "Illinois Court Reduces $12 Billion Bond," 14 April 2003, www.industrypages.com/artman/publish/Industry_News_2529.stm (8 June 2004); "Philip Morris Claims Ruling Threatens Tobacco-Settlement Payments," 31 March 2003, jointogether.org/sa/news/summaries/reader/0,1854,562438,00.html (8 June 2004); "Judge Considers Arguments in Tobacco Fraud Case," 12 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562107,00.html (8 June 2004); "Philip Morris, Hit Hard by Ruling, Seeks Bond Reform," 26 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562373,00 .html (8 June 2004); "Philip Morris Sued for Deception," 28 January 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,556294,00.html (8 June 2004); and "States Would Suffer without Philip Morris Payment," 2 April 2003, www.tobacco.org/news/121751.html (8 June 2004).
14. "Philip Morris Asks Illinois Court to Cut Bond for Appeal," 4 April 2003, www.tobacco.org/news/122134.html (8 June 2004); "Illinois Tobacco Judgment Threatens Kentucky's Budget," Kansas City Star, 1 April 2003; "Illinois Court Reduces $12 Billion Bond," 14 April 2003, www.industrypages.com/artman/publish/Industry_News_2529.stm (8 June 2004); "Philip Morris Claims Ruling Threatens Tobacco-Settlement Payments," 31 March 2003, jointogether.org/sa/news/summaries/reader/0,1854,562438,00.html (8 June 2004); "Judge Considers Arguments in Tobacco Fraud Case," 12 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562107,00.html (8 June 2004); "Philip Morris, Hit Hard by Ruling, Seeks Bond Reform," 26 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562373,00 .html (8 June 2004); "Philip Morris Sued for Deception," 28 January 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,556294,00.html (8 June 2004); and "States Would Suffer without Philip Morris Payment," 2 April 2003, www.tobacco.org/news/121751.html (8 June 2004).
15. "Philip Morris Asks Illinois Court to Cut Bond for Appeal," 4 April 2003, www.tobacco.org/news/122134.html (8 June 2004); "Illinois Tobacco Judgment Threatens Kentucky's Budget," Kansas City Star, 1 April 2003; "Illinois Court Reduces $12 Billion Bond," 14 April 2003, www.industrypages.com/artman/publish/Industry_News_2529.stm (8 June 2004); "Philip Morris Claims Ruling Threatens Tobacco-Settlement Payments," 31 March 2003, jointogether.org/sa/news/summaries/reader/0,1854,562438,00.html (8 June 2004); "Judge Considers Arguments in Tobacco Fraud Case," 12 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562107,00.html (8 June 2004); "Philip Morris, Hit Hard by Ruling, Seeks Bond Reform," 26 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562373,00 .html (8 June 2004); "Philip Morris Sued for Deception," 28 January 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,556294,00.html (8 June 2004); and "States Would Suffer without Philip Morris Payment," 2 April 2003, www.tobacco.org/news/121751.html (8 June 2004).
16. "Philip Morris Asks Illinois Court to Cut Bond for Appeal," 4 April 2003, www.tobacco.org/news/122134.html (8 June 2004); "Illinois Tobacco Judgment Threatens Kentucky's Budget," Kansas City Star, 1 April 2003; "Illinois Court Reduces $12 Billion Bond," 14 April 2003, www.industrypages.com/artman/publish/Industry_News_2529.stm (8 June 2004); "Philip Morris Claims Ruling Threatens Tobacco-Settlement Payments," 31 March 2003, jointogether.org/sa/news/summaries/reader/0,1854,562438,00.html (8 June 2004); "Judge Considers Arguments in Tobacco Fraud Case," 12 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562107,00.html (8 June 2004); "Philip Morris, Hit Hard by Ruling, Seeks Bond Reform," 26 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562373,00 .html (8 June 2004); "Philip Morris Sued for Deception," 28 January 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,556294,00.html (8 June 2004); and "States Would Suffer without Philip Morris Payment," 2 April 2003, www.tobacco.org/news/121751.html (8 June 2004).
17. "Philip Morris Asks Illinois Court to Cut Bond for Appeal," 4 April 2003, www.tobacco.org/news/122134.html (8 June 2004); "Illinois Tobacco Judgment Threatens Kentucky's Budget," Kansas City Star, 1 April 2003; "Illinois Court Reduces $12 Billion Bond," 14 April 2003, www.industrypages.com/artman/publish/Industry_News_2529.stm (8 June 2004); "Philip Morris Claims Ruling Threatens Tobacco-Settlement Payments," 31 March 2003, jointogether.org/sa/news/summaries/reader/0,1854,562438,00.html (8 June 2004); "Judge Considers Arguments in Tobacco Fraud Case," 12 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562107,00.html (8 June 2004); "Philip Morris, Hit Hard by Ruling, Seeks Bond Reform," 26 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562373,00 .html (8 June 2004); "Philip Morris Sued for Deception," 28 January 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,556294,00.html (8 June 2004); and "States Would Suffer without Philip Morris Payment," 2 April 2003, www.tobacco.org/news/121751.html (8 June 2004).
18. "Philip Morris Asks Illinois Court to Cut Bond for Appeal," 4 April 2003, www.tobacco.org/news/122134.html (8 June 2004); "Illinois Tobacco Judgment Threatens Kentucky's Budget," Kansas City Star, 1 April 2003; "Illinois Court Reduces $12 Billion Bond," 14 April 2003, www.industrypages.com/artman/publish/Industry_News_2529.stm (8 June 2004); "Philip Morris Claims Ruling Threatens Tobacco-Settlement Payments," 31 March 2003, jointogether.org/sa/news/summaries/reader/0,1854,562438,00.html (8 June 2004); "Judge Considers Arguments in Tobacco Fraud Case," 12 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562107,00.html (8 June 2004); "Philip Morris, Hit Hard by Ruling, Seeks Bond Reform," 26 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562373,00 .html (8 June 2004); "Philip Morris Sued for Deception," 28 January 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,556294,00.html (8 June 2004); and "States Would Suffer without Philip Morris Payment," 2 April 2003, www.tobacco.org/news/121751.html (8 June 2004).
19. "Philip Morris Asks Illinois Court to Cut Bond for Appeal," 4 April 2003, www.tobacco.org/news/122134.html (8 June 2004); "Illinois Tobacco Judgment Threatens Kentucky's Budget," Kansas City Star, 1 April 2003; "Illinois Court Reduces $12 Billion Bond," 14 April 2003, www.industrypages.com/artman/publish/Industry_News_2529.stm (8 June 2004); "Philip Morris Claims Ruling Threatens Tobacco-Settlement Payments," 31 March 2003, jointogether.org/sa/news/summaries/reader/0,1854,562438,00.html (8 June 2004); "Judge Considers Arguments in Tobacco Fraud Case," 12 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562107,00.html (8 June 2004); "Philip Morris, Hit Hard by Ruling, Seeks Bond Reform," 26 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562373,00 .html (8 June 2004); "Philip Morris Sued for Deception," 28 January 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,556294,00.html (8 June 2004); and "States Would Suffer without Philip Morris Payment," 2 April 2003, www.tobacco.org/news/121751.html (8 June 2004).
20. "Philip Morris Asks Illinois Court to Cut Bond for Appeal," 4 April 2003, www.tobacco.org/news/122134.html (8 June 2004); "Illinois Tobacco Judgment Threatens Kentucky's Budget," Kansas City Star, 1 April 2003; "Illinois Court Reduces $12 Billion Bond," 14 April 2003, www.industrypages.com/artman/publish/Industry_News_2529.stm (8 June 2004); "Philip Morris Claims Ruling Threatens Tobacco-Settlement Payments," 31 March 2003, jointogether.org/sa/news/summaries/reader/0,1854,562438,00.html (8 June 2004); "Judge Considers Arguments in Tobacco Fraud Case," 12 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562107,00.html (8 June 2004); "Philip Morris, Hit Hard by Ruling, Seeks Bond Reform," 26 March 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,562373,00 .html (8 June 2004); "Philip Morris Sued for Deception," 28 January 2003, www.jointogether.org/sa/news/summaries/reader/0,1854,556294,00.html (8 June 2004); and "States Would Suffer without Philip Morris Payment," 2 April 2003, www.tobacco.org/news/121751.html (8 June 2004).
21. K. McDermott, "Appeal Bonds Are Focus of Hearing," St. Louis Post-Dispatch, 26 January 2004.
22. In a very comprehensive paper, Steven Schroeder notes this potential conflict of interest but does not note that securitization using MSA funds as collateral mitigates the conflict of interest. Schroeder, "Tobacco Control."