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Tobacco bond bill smolders without a vote in Senate
JEFFERSON CITY, Mo. -- A bill that would let the state raise cash by selling bonds against its share of the national tobacco settlement stalled Tuesday in the Senate.
After a second day of debate, the Senate moved on to other business without voting on the bonding legislation proposed by Sen. Ken Jacob, D-Columbia.
Jacob had objected to another senator's amendment to prevent any of the revenue from the bond sale from being used for cloning or abortion-related services.
With the legislature seeking additional revenue to balance the budget, Jacob said the failure of his proposal means there is one less option to fund programs for the elderly and students.
"All of those issues are going to be unfunded because we are not able to liquidate assets because, somehow, the sale of tobacco revenue has something to do with abortion and genetic testing," Jacob said.
Under the bill, the state could sell a maximum of 30 percent of the $4.5 billion that tobacco companies are expected to pay the state over the next 25 years.
Depending on market conditions, the bond sale could raise as much as $600 million.
The cash advance would reduce Missouri's total receipts from the settlement by $1.3 billion. But there are other reasons that the state might get less than the full $4.5 billion, Jacob said, and the bond sale would at least bring in some revenue.
Jacob's bill would allow the bond revenue to be used only for one-time expenditures, short-term revenue shortages or capital improvements.
Sen. David Klarich, R-Ballwin, said he was concerned about how much the cash advance would cost the state against the total tobacco settlement and how the revenue from the bond sale would be used.
Klarich prepared an amendment barring any of the revenue from funding such activities as abortion-related services or cloning.
"I was just trying to ensure that if the money was going to be used for life sciences ... that it would be tied to the same limitations every other life sciences issue has been tied to," Klarich said.
He said Jacob's claim that the anti-abortion amendment doomed the bill was"ridiculous."
"That language is the same that has been offered over two years at different times on different pieces of legislation," Klarich said
At least seven states have sold part or all of their tobacco settlement payments, according to the National Conference of State Legislatures. At least four others have approved plans to sell part of the payments but have not yet done so.