Over a third of the money tobacco companies have agreed to pay the state over the next quarter century has already been secured, insuring the state won’t lose out if a tobacco-maker goes under. Banks, mutual funds and other financial intuitions have snapped up 644-million dollars worth of State of Iowa bonds. Those bonds are backed by the tobacco companies. State Treasurer Michael Fitzgerald says it’s “like winning the lottery” as the state takes all its money up front.Lawmakers decided to sell bonds and set up a trust fund to secure a large part of the money the state was pledged as part of a legal settlement with the tobacco companies.Two years ago, tobacco-makers agreed to pay Iowa one-point-eight billion dollars over 25 years. State policymakers have so far agreed the tobacco money should be used to cover state health care programs, as the tobacco companies were sued to recover the money states spent treating poor citizens with tobacco-related illnesses.
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