TRR photo by David Hulse Rusty Pomeroy (D-3), right, listens to a Tuesday investment pitch on Sullivan's tobacco payments. (Click for larger image)

By DAVID HULSE

MONTICELLO - Financial markets have long been called the rich man's betting parlor and Sullivan County legislators this week must decide whether they will gamble on a $38 million pot or scoop up a sure $13 million.

The county is considering joining a group of about 18 New York counties who are not going to gamble on the future of the tobacco industry, or the company's long-term payments toward a fulfillment of the multi-billion dollar damage award in a national settlement negotiated with 46 states.

If they do nothing, Sullivan is scheduled to receive some $38 million as its share of those payments over the next 30 years. That amount is based on projected "flat" sales of tobacco products, but could fall if "domestic delivery" of cigarettes falls below projected levels.

In the second year of payments based on the national settlement, Sullivan's payments have already fallen below projected levels, finance commissioner Richard LaCondre has reported. But LaCondre and others find it difficult to swallow the $25 million difference.

If they join the other 18 counties, investment bankers will market and sell the counties' interests in those payments to private investors, or securitize them. The counties will get an immediate payoff guaranteed and have no further interest or liability in the future of the tobacco companies. Sullivan would receive about $13.2 million according to representatives of PaineWebber and First Albany, who made a Tuesday presentation favoring the securitization plan.

Several legislators appeared ready to go along with the securitization plan and take "the bird in hand." While she counted herself among them, Leni Binder (D-7) wondered if the arguments against staying with the settlement were as compelling as presented by the bankers and why other investors would buy the resulting bonds.

The legislature's finance committee is scheduled to meet Thursday morning at 9:30 a.m. to discuss it further. To meet an October 20 banker's deadline the county must finalize its decision this week.