Tobacco bonds in MN budget come at hefty price

The budget deal that ended Minnesota's government shutdown comes with a hefty price: It relies heavily on borrowing $640 million against money from the state's 1998 tobacco settlement, but might cost that same amount in interest — plus a substantial annual revenue loss for years to come.
Still, it allowed Democratic Gov. Mark Dayton and Republican legislative leaders to avoid $640 million in spending cuts or tax increases.
"From the Republican standpoint it is considered better than a tax increase. I would presume from the governor's standpoint it makes money available to support critical programs," said Tom Hanson, who was the state's finance commissioner under former Gov. Tim Pawlenty. "The downside is it's money that's not going to be available in the next biennium ... but the spending expectations will probably be there."
All 50 states reached settlements with the major tobacco companies in 1998 to recover billions of dollars in costs incurred from treating smoking-related illnesses. Forty-six states signed a master agreement with the industry while Minnesota was one of four states that negotiated separate deals. Minnesota's settlement was expected to bring the state $6.1 billion over 25 years, with payments continuing into perpetuity.
About 20 states have issued bonds backed by future tobacco settlement revenues to meet more immediate needs, according to Arturo Perez, a financial analyst with the National Conference of State Legislatures. Some states have done so more than once. This will be Minnesota's first time, although the idea has been floated at the Capitol before, most recently in 2009 when Pawlenty was unable to get support for a tobacco bond issue.
The budget deal calls for $1.4 billion from tobacco bond proceeds and delayed payments to schools. Minnesota currently gets about $160 million a year from the cigarette makers, so it's expected to receive about $320 million in the two-year budget period that began July 1. The loss of an as-yet unknown portion of that revenue in future budgets means lawmakers may have to find a way to plug that gap.
"They're going to have the same debates two years from now," Hanson predicted. "... Hopefully the economy will grow and the revenue will grow faster than the obligations for the programs."
The special session tax bill Dayton signed Wednesday leaves it up to his finance commissioner to work out most details of how to structure the bond sale, including how long it will take to repay bondholders. The bonds won't be guaranteed by the state.
As a general rule, said Bill Marx, a fiscal analyst for the Minnesota House of Representatives, the final cost to the taxpayers could be 150 percent to 200 percent of the bonds issued. By that math, a $640 million tobacco bond issue could cost nearly $1 billion to close to $1.3 billion.
Marx said the full costs won't be known until the bonds are finally put out for bids, so it's difficult to know yet what the interest rates would be. Tobacco bonds typically get slightly lower ratings from Wall Street analysts than the state gets for general obligation bonds, he said.
A week into the shutdown, Fitch Ratings cited the state's expected reliance on one-time money for closing its budget gap when it downgraded Minnesota's credit rating from AAA to AA+.
Perez said tobacco bond issues ground to a halt in 2008, partly due to failure of investment bank Bear Stearns Cos., which had been a leader in the field. He said it's not clear if a sale by Illinois late last year and the Minnesota plan mark the beginning of a trend.
Illinois sold $1.5 billion worth of tobacco bonds last December, which could give Minnesota a guide. James Prichard, manager of capital markets for the Illinois Office of Management and Budget, said the bonds had an average yield of 5.6 percent. He said Illinois was careful to structure its deal more conservatively than many other states have done, to ensure bondholders can be paid if smoking rates decline faster than expected.
The amount of money the state gets under the settlement is tied to tobacco sales.
Danny McGoldrick, vice president for research at the Campaign for Tobacco-Free Kids, said it's a bad deal for Minnesota. The group has been critical of tobacco bond issues by other states, too. It says raising tobacco taxes would have the added benefit of reducing smoking.
"You're giving up a future revenue stream that can and should be used for what was intended from the settlement, which is to help prevent kids from smoking and encouraging smokers to quit," McGoldrick said.

San Jose Medical Marijuana Expert Gives Tips for Safe Consumption

Some medical marijuana medicating methods can be potentially hazardous to patients' health, says San Jose medical marijuana dispensary MedMar Healing Center. The South Bay cannabis club's staff makes it their business to educate their patients and the community about the importance of safe and responsible consumption practices, and offers a wide range of alternatives to the traditional method of smoking marijuana.

Although medical marijuana is nontoxic, smoking it can be hazardous because toxic compounds are created in the combustion process, and certain methods of creating fire contain harmful chemicals.

"If you smoke, what you use to light your medication can be harmful to your lungs," said MedMar representative Doug Chloupek. "It is best to stay away from lighters and instead use items such as bee-line honey wicks. And if you must use a lighter, stay away from butane gas and torch lighters."

A healthier option for those who prefer inhaling their medicinal cannabis is to use a vaporizer instead of a traditional bong or pipe because vaporization heats the plant matter enough to release the medicinal compounds, but not to the point of combustion.

A Cal NORML/MAPS vaporizer study determined that vaporizers that heat medicinal cannabis to temperatures between 266° to 446° Fahrenheit (the point where medically active vapors are produced, but below the threshold of combustion where smoke is formed) generally produce a healthier inhalant than smoking devices. Vaporizers allow the patient to inhale the therapeutic cannabinoids without any of the harmful smoke and carbon monoxide that pipes and bongs produce.

But buyer beware-choosing a poorly designed vaporizer can lead to the emission of toxic fumes, result in combustion and even create a fire hazard. Tim Morrissey, CEO of Head Change Distributors, a national vaporizer manufacturer and distributor based in San Francisco, says to avoid vaporizers made with plastic parts, unnecessary bells and whistles, and poorly designed whips. A faulty whip can result in back-flow and cause the medicine to fall back into the heating element and burn.

"To ensure your vaporizer doesn't become a fire hazard, look for vaporizer models that have a three-prong grounded electrical plug and are UL certified," said Morrissey. "Those are indications the manufacturer took the time to design an electrically safe product with the end consumer in mind-not just dollar signs."

Likewise, butane-fueled vaporizers can impose health risks, as inhalation of butane can cause euphoria, drowsiness, asphyxia or cardiac arrhythmia. Butane is an odorless tasteless gas, so gasses to like methyl mercaptan are added so they can be smelled, but it doesn't affect the taste. People using butane vaporizers may smell the butane but disregard it because they can't taste it, and end up suffering health consequences.

Patients who wish to avoid inhalation altogether may enjoy [medical cannabis edibles, which range from lollipops to brownies, and have the added benefit of being easy to transport and consume discreetly. MedMar recommends that patients follow the same guidelines as they do when purchasing other food products. That means monitoring the ingredients and calories shown on the label. Gluten-free and low-sugar options are available for many different edibles at MedMar.

Another consumption choice is cannabis concentrates. Indica Lullaby Tinctures are fast-acting and allow patients to drink their medication with none of the harmful effects of smoke or calories involved in edibles. Tincture dosages are typically one to two teaspoons dissolved in a cup of water.

For patients who feel most comfortable taking their medication in pill form, God Med Capsules are the answer. God Med is well known for producing its medical marijuana capsules using the highest quality, fully tested, organic cannabis flower.

For more information about the medicinal cannabis consumption options, or to learn more about any of MedMar Healing Center's products and services, call (408) 426-4400 or visit sanjosemarijuanadispensaries.com. MedMar is located at 170 South Autumn Street, San Jose, CA 95110.

About MedMar Healing Center
MedMar Healing Center, a San Jose cannabis club, is a medical marijuana dispensary that provides high quality medical marijuana to San Jose Prop 215 patients. The comfortable San Jose marijuana dispensary features a large selection of strains and edibles, and their friendly staff can help find the right medication option to suit patients' varying preferences.

Acting as an easily accessible resource for Bay Area medical marijuana patients, MedMar is centrally located in downtown San Jose, only blocks from the San Jose Sharks' home, HP Pavilion. They are close to major freeways and thoroughfares, and are located near all the major public transit options, including Diridon Station.

Florida Supreme Court pushes tobacco case forward

A long-standing battle between cigarette makers and smokers whose lives were cut short took a big step forward as the Florida Supreme Court told tobacco companies to get on with it.

The state’s highest court last week refused to jump into a debate over whether trial judges are using the proper procedure in thousands of smoking cases that have come about since it ruled in 2006 that plaintiffs’ battling tobacco companies could not file en masse but did not have to prove cigarettes were harmful and companies knew it.

In a remarkably short order, the court opened the flood gates for hundreds — if not thousands — of cases waiting in the wings that could cost cigarette makers billions of dollars in cases that may ultimately be decided by the U.S. Supreme Court.

“This cause having heretofore been submitted to the Court on jurisdictional briefs and portions of the record deemed necessary to reflect jurisdiction under Article V, Section 3(b), Florida Constitution, and the Court having determined that it should decline to accept jurisdiction, it is ordered that the petition for review is denied,” the court wrote in a two-paragraph ruling. “No motion for rehearing will be entertained by the Court.”

By refusing to take up an appeal by R.J. Reynolds over a $28.3 million award to a Panhandle widow whose husband, Benny Martin, was a lifetime Lucky Strikes smoker, the high court in essence told companies that it meant what is said in 2006. Smokers do not have to prove individually the inherent dangers of smoking. They only need to prove that it was largely responsible for the illness and death that followed years of use.

The Martin case is among hundreds of so-called “Engle progeny” cases brought about when the state Supreme Court in 2006 threw out the $145 billion awarded to a group of smokers who became ill or died in the mid-1990s. The court said smokers could not sue as a group but could rely on central findings in the class-action lawsuit.

Numerous individual cases followed against Phillip Morris (Marlboro), and R.J. Reynolds (Camel, Pall Mall). The ramifications of the decision go far beyond the Martin case.

A day later, the high court without comment accepted lower court rulings in three more cases, with verdicts totaling more than $25 million. Other cases are expected to follow.

The U.S. Supreme Court has already weighed in on one aspect of the cases, ruling that punitive damages cannot be overly excessive. That ruling has some observers saying the nation’s high court has little choice but to let the rulings stand, a non-decision cigarette makers say could bankrupt the industry.

Days after the Florida ruling, officials for RAI, R.J. Reynolds’s parent company, on Friday said performance for the first half of 2011 has been robust and the future remains bright for the company and the industry.

“Over the long-term our strategy is straightforward and bold. RAI and its operating companies are focused on leading transformation of the tobacco industry while continuing to deliver outstanding results for our shareholders,” said Daniel Delen, president and CEO of RAI, R.J. Reynolds parent company.

Spearfish schools shore up nicotine policy by banning e-cigarettes

The Spearfish School District has banned e-cigarettes and other objects that dispense nicotine.

School officials say the policy change was needed as the popularity of such devices has grown among smokers trying to quit.

Superintendent Dave Peters told the Black Hills Pioneer newspaper that officials weren't sure those items were covered in the policy, so they made the change.

Peters says he's unaware of anyone using an e-cigarette on school grounds, but the district is trying to keep its policies current with ever-changing technology.

School Board President Randall Royer says he's seen people use the devices in inappropriate places.

Royer, who is also a Black Hills State University professor, said a university student was seen smoking one during a final exam at the end of the semester.

FDA requires graphic images on cigarette packs

The Food and Drug Administration has required that graphic images—rotting teeth, the corpse of a smoker and a diseased lung, among others—take up the top half of the front and back of all cigarette packs by September 2012.
The nine images, which also include a man with a tracheotomy smoking and a woman with a baby surrounded by smoke, will be accompanied by phrases like "Smoking can kill you" and "Cigarettes cause cancer."

Cigarettes for woman? Buy Kiss cigarettes online for cheap price.

"The new warning labels on cigarettes are a huge step forward," said Geoff Zuckerman, Tobacco Free Colleges Coordinator at UNCW. "We hope it will help people think twice before buying another pack and help them to kick the highly addictive habit. We also hope that it will prevent youth from ever buying their first pack."
Tobacco advertisements larger than 12 inches must also contain a warning label that constitutes 20 percent of the ad. Smaller advertisements are not required to have 20 percent coverage but must include a warning.
Tobacco makers in the past have fought government regulation of warning labels on the grounds that the visibility of the brand is compromised. A 2009 federal lawsuit filed by Reynolds-American Inc. called the mandatory use of larger labels "unconstitutional," according to an article in Industry Leaders Magazine.
Canada, Brazil and Australia are among the 30 countries worldwide that have implemented similar rules requiring graphic images or warnings on the sides of cigarette packs. Member countries of the European Union must print warnings such as "Smokers die younger" and "Smoking kills" in large typeface.
"These kind of graphic warning labels strengthen the understanding of people about the health risks of smoking," FDA Commissioner Margaret Hamburg said in an interview with the Associated Press. "We clearly have to renew a national conversation around these issues and enhance awareness."
According to the Center for Disease Control, more deaths are caused each year by tobacco use than all deaths from human immunodeficiency virus (HIV), illegal drug use, alcohol use, motor vehicle injuries, suicides, and murders combined. The CDC estimates that cigarette smoking causes 443,000 deaths each year in the United States.

AG's office looking at roll-your-own cigarette machines

The West Virginia Department of Administration has alerted Attorney General Darrell McGraw to what it calls an "apparently new phenomena" of roll-your-own cigarette machines in tobacco stores in the state.

The department, in a letter to McGraw's office dated June 24, said in these stores a customer can purchase bulk tobacco and rolling papers, and place them into a hand-cranked machine that takes the raw materials and turns them into cigarettes.

"Purchasing cigarettes in this manner allows the customer to circumvent state cigarette tax," Administration Secretary Robert Ferguson wrote.

Here you can buy cheap cigarettes online from discount tobacco shop.

"To the extent that this practice impacts your ability to work with the tax department to collect revenue pursuant to the Tobacco Master Settlement Agreement, it was the hope of the (Tobacco Settlement Finance Authority) that bringing it to your attention would be helpful to your office."

The state's Tobacco Settlement Finance Authority, or TSFA, is a blended component unit of the State and is governed by a five-member board, including the Secretary of Administration, the state Treasurer and three individuals appointed by the governor.

The TSFA was created to issue bonds related to the State's portion of the tobacco settlement revenue from the Master Settlement Agreement between tobacco manufacturers and the covered states.

"In general, our department issues bonds and, in terms of this transaction, we sold the rights to the income of those bonds years ago," Administration spokeswoman Diane Holley-Brown explained in an e-mail.

McGraw's office, in a response to Ferguson dated June 27, said it was already aware of the cigarette machines.

"Please be advised that not only are we are of this issue, but also we have been engaged in active litigation with respect thereto for the past six months," Managing Deputy Attorney General Barbara Allen wrote.

Numerous messages left for the Attorney General's Office were not returned.

The Charleston Gazette reported that one such shop is located in Kanawha City.

The price of the roll-your-own cigarettes, the newspaper says, is about half of what a brand-name pack of cigarettes cost. That's mostly because of the state's 55-cent tax on cigarette packs.

It is illegal to sell cigarettes that don't have the state cigarette tax stamp on them.

Cigarette law rolling down the wrong road

I hate it when I see adults smoking in cars, their children trapped in a rolling cloud of toxic fumes.

When I see adults subjecting kids to that poison, I have to fight the temptation to ram their cars, to bang on their windows, to yell at them to stop. It is both unhealthy and unkind to force children to breathe in second-hand smoke.

The odds may not be terribly high that the children will grow up to develop cancer as a direct result -but even in the short term, the smoke irritates young eyes and throats, aggravates childhood colds and allergies and asthma, causes more ear and lung infections. It stinks. It chokes. And children, especially young children, are helpless to protest or fight back.

So I understand why the City of Leduc has just enacted a municipal bylaw to ban people from smoking in private vehicles in which minor children are passengers. The bylaw, which follows one passed in Okotoks, is well-intentioned. But it is fundamentally wrongheaded.

A private vehicle is just that -private. The state has the right to regulate how fast you drive, whether you drink before you drive, or whether you use a cellphone when you operate your vehicle, because those actions influence the way you operate your private vehicle. They have a direct impact on the safety of the public roadways and the security of the public at large. We allow the state to limit our freedoms, in these cases, because there is a direct connection to traffic safety. Similarly, we allow the state to enforce laws about seatbelts and child seats, because those things have a direct connection to motor vehicle safety.

But a local municipality has no such ethical right or moral responsibility to control what you do within your own car to influence the pulmonary health of your private passengers.

It is not the role or the responsibility of the city to regulate good parenting. A municipality can't compel parents to vaccinate their children for whooping cough. It can't compel parents to feed their children milk and fruit and fresh vegetables instead of Froot Loops, Dunkaroos and Coca-Cola. It can't stop parents from spanking their children, from letting them stay up late, from letting them watch South Park or play Grand Theft Auto.

Parenting is a matter of very personal choices and values, and a city council doesn't have the constitutional prerogative to interfere in the private relationship between parents and children. The province and the federal government do have the right to pass legis-lation with regards to child welfare or physical abuse. But until and unless those higher orders of government decide that smoking in the presence of a child constitutes a physical assault, I just don't see the logic in local municipal bans on smoking in cars full of kids.

Sure, you can hypothetically protect a baby or toddler from second-hand smoke for the 20 minutes it takes to drive from one end of Leduc to the other -when RCMP officers can spy those icky cigarettes through the car window. But the bylaw does nothing to help that vulnerable little one for the other 231/2 hours of the day, when the kid is at home, breathing in noxious fumes.

After all, if it's against the law to smoke in your vehicle with children inside, why isn't it illegal to smoke in your own house or apartment or trailer when children are present? Or to smoke while you're pregnant, or living with a pregnant woman? If we don't want the government to regulate our private habits in our private spaces, we can't make an exception for cars and trucks and motorhomes, just because they're more visible.

Conversely, I have absolutely no problem with Edmonton Coun. Amarjeet Sohi's recent proposal that Edmonton ban smoking in city playgrounds and parks. (I'll defend your legal right to smoke around your children, in the privacy of your home or car -but not your right to smoke around mine, in a public place.)

City parks and playgrounds aren't private spaces. They're owned and operated by the municipality, for the common good, and the city has a right and responsibility to regulate what happens within them. Second-hand smoke may not be a major long-term cancer threat in a wide open space, but it's still a smelly, eye-watering, throat-prickling annoyance. Nor are poisonous, germy cigarette butts something you want toddlers (or dogs) picking up and putting in their mouths.

Banning smoking in public parks wouldn't infringe on anyone's privacy, but it would send a strong social message that smoking is a nuisance, not a right, and that we, as a community, won't encourage or countenance smoking where children and families specifically come to play.

We have come so far in the past 30 years in our cultural battle against tobacco addiction -thanks to the combination of health education and public smoking bans. In our quest to continue that progress, we mustn't let our noble zeal to protect our community's children erode our most basic civil liberties. That doesn't mean we shouldn't expect our civic leaders to show social leadership -but only within the proper limits of their proper powers.