BATON ROUGE, La. (AP) — Gov. Bobby Jindal's plan to refinance Louisiana's tobacco settlement bonds has run into snags because changing financial market conditions have sharply reduced the estimates of how much money Louisiana can get through the deal.

When lawmakers and other state officials signed off on the refinancing plan earlier this month, estimates were that the state would save $142 million by taking advantage of low interest rates, getting the upfront cash over three years.

By Wednesday, those projections were nearly cut in half.

Treasurer John Kennedy, a critic of the Jindal administration's refinancing structure, said savings estimates had dropped to around $66 million. Jindal's commissioner of administration, Kristy Nichols, said the figures were closer to the $75 million to $85 million range.

The state's 2013-14 budget is tied to the refinancing. In the fiscal year that begins July 1, $67 million from the bond deal is plugged into the free college tuition program called TOPS.

Kennedy suggested the refinancing should be revisited, and he wanted to hold a special Bond Commission meeting to discuss whether the bond sale should be stalled.

"What you would normally do when the market goes against you would be to step back and say, 'Do we really want to sell right now?'" Kennedy said. "I wouldn't sell into the teeth of this market."

Nichols said the administration doesn't intend to postpone the refinancing. She said even with less savings, it's still a good deal for the state.

"Our financial advisers advised that we take a little break and assess the market. That's what we're doing," Nichols said. But she added, "We're fully expecting to move forward with the deal."

Despite his criticism, Kennedy has no ability to stop the refinancing or slow it down. As chairman of the Tobacco Settlement Finance Corp. board, Nichols was given sole authority over the transaction.

Louisiana is one of many states that settled lawsuits for claims of smokers' deaths and health costs against tobacco companies in 1998 in return for installments of money each year.

The state sold 60 percent of its settlement to investors for $1.2 billion in upfront cash through a bond sale in 2001, rather than risk tobacco companies going belly-up later and not making their settlement payments. The dollars were socked away into a trust fund. Interest earnings are used to help fund TOPS, along with other health and education programs.

It's those bonds that will be refinanced, to take advantage of a lower interest rate for repayment of the borrowing debt.

But interest rates spiked higher in recent days, after signs of national economic improvement and comments from the chairman of the Federal Reserve suggesting work to keep interest rates low may be nearing an end.

Sen. Barrow Peacock, R-Shreveport, a legislative appointee to the Tobacco Settlement Finance Corp. board, said he continues to support the refinancing despite the interest rate fluctuations.

"Even though the savings might not be as great as it would have been a month ago, it's still a savings. A year from now there might not be a savings at all," he said.

Nichols said the deal will generate enough money for the TOPS program in the coming budget year, without any gaps.

But the treasurer said budget concerns appear to be driving the refinancing rather than sound financial policy.

"They've gotten themselves backed into a corner. They need the money to balance the budget, but that skews their decision about when is the best time for taxpayers to sell the bonds," Kennedy said.

Nichols said that was an incorrect assessment.

"I just want to make the best deal for the state," she said.

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