CATEGORY: Tupelo Stories
HED:Treasurer urges trust fund for tobacco money
By Philip Moulden
State Treasurer Marshall Bennett warned Monday there will be intense pressure on lawmakers during the coming election year session to spend tobacco lawsuit revenues that should be placed in a trust fund.
“The temptation is going to be tremendous to spend that $185 million (next) year,” Bennett said of the money already in banks from the $4.5 billion tobacco settlement. But the state’s long-term well-being would be better served by holding it in trust, he said.
Addressing Tupelo Rotary Club members, Bennett also lauded the financial health of the state and the state’s MPACT program to ease college education costs.
He also reported the state treasury is holding $165,000 in unclaimed funds belonging to people or companies from Lee County. People may determine if they are on that list by contracting the state treasurer’s office.
Bennett did not reveal his plans for the coming election, but said he would make a decision in about two weeks. He has been touted by some as a potential candidate for state attorney general.
On the economy, Bennett noted that budget surpluses have exceeded $30 million for the past five years.
Taxpayers have shared in that economic largess, he said. Capital gains taxes have been cut, car tag costs sliced up to 50 percent, pension taxes were eliminated and inheritance taxes don’t come into play until the $1 million mark.
“Those are some of the instances where we’ve had tax relief in this state,” he said.
The Legislature could help assure the state’s financial well-being by creating a trust fund to invest the tobacco money, Bennett said.
Interest on the fund could reach $100 million a year in less than 10 years and $300 million a year in 13 years, he said. The tobacco funds are to be reserved for health-related programs.
“We could literally turn Mississippi into the healthiest state in the country,” Bennett said.
Bennett also warned that the state should not count settlement revenues as sure income over the 25 years set out in the court agreement. Bankruptcy by the tobacco companies would cut off funding, he noted.
“We may never get all this money.”
Mississippi’s Prepaid Affordable College Tuition (MPACT) program offers a way to meet college costs while repressing mushrooming tuition costs, Bennett said.
The program establishes payments for up to 18 years to cover the costs of a child attending a Mississippi public college.
“You can lock in the price today for tomorrow’s tuition,” he said. “What you’re buying is a guaranteed contract with the state of Mississippi that we would pay the child’s tuition.”
The funds, plus interest, would be returned if the child didn’t attend college, or they could be used toward costs at out-of-state or private colleges.
The investment is also subject to state and federal tax breaks, Bennett said.