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Selling bonds to deal with debt service
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Twice before, Gov. Tim Pawlenty has turned to tobacco to help balance the state's books. In 2003, he tapped a billion-dollar endowment left over from the 1998 tobacco lawsuit settlement to help resolve a large budget shortfall. In 2005 he proposed a "health impact fee" on cigarettes to help end a partial state government shutdown and reach an agreement on that year's budget. This year, tobacco again plays a role in the proposed budget solution. Here's how:
• Nearly $1 billion would be raised from the sale of bonds to be repaid with money that Minnesota receives each year under the 1998 tobacco suit settlement. The annual amount is about $200 million, though it can change with inflation and the volume of tobacco sales.
• Under the Pawlenty proposal, about half of the yearly tobacco payment to the state would be used to pay off the bonds.
• The lump sum gained from the bond sale would be applied to the state's overall debt service payments, currently projected at $1.067 billion for the 2010-11 biennium.
JIM KERN
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Current state office holders
Governor: Tim Pawlenty
One of only a few prominent Republicans to win a competitive re-election contest in the Democratic sweep of 2006, Tim Pawlenty is widely seen as politically shrewd and naturally likable.
- Lt. Governor: Carol Molnau
- Secretary of State: Mark Ritchie
- Attorney General: Lori Swanson
- State Auditor: Rebecca Otto
Minnesota's political giants: Learn more about the men and women who have shaped Minnesota's political history.
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