The Millions New York Counties Coulda Got
In 1999, New York counties had a choice to make. They had just been promised annual payments from tobacco companies as part of a national settlement to reimburse them for smoking-related health care costs. Like winning the lottery, they could either get small payments indefinitely -- or take a lump sum immediately by entering into "securitization" deals. Counties knew that these deals would mean less money in the long run, but bankers said they offered protection in case the payments shrank or went away. Now the cost is clear: millions pledged to investors that counties could have kept for themselves. Related Story »
Select a county to see how its deals are shaping up:
What’s a Good Deal?
It’s a given that counties will give up something – interest payments over time – to securitize. How much is too much? In part, it depends on interest rates. A dollar now is worth more than a dollar in the future because it can be invested. So the higher the interest, the less counties future payments are worth today. Pick a rate to see the difference.
Decline in Smoking
Under the 1998 settlement, payments to counties are linked to cigarette sales. Forecasters predict smoking will go down 3 percent a year on average. Adjust to see how a steeper drop in smoking would affect payments.
Sources: See our methodology.
* City of New York includes the 5 counties of Bronx, Kings, New York, Queens and Richmond.