Allan Sloan explains in the latest issue of Fortune magazine why the New Jersey government is off track with tobacco bonds.

Why am I, a New Jersey resident who owns state bonds, sharing my Garden State grievance with you?

Part of it has to do with being disillusioned with Gov. Chris Christie, whom I embraced as a fiscal conservative, but who hasn’t acted that way–and whose administration has just done a deal it proclaims a fiscal winner but that looks like a loser to me.

However, my major motive here is that other governments will likely be doing what Jersey did in March: restructure financially distressed tobacco bonds. Bloomberg lists 24 issuers (20 states, the District of Columbia, and three territories) with a total of $38 billion of tobacco bonds, about 20% of which are distressed. Keep your eyes on those re-fis. …

… So what’s my problem? I think the state made a bad deal for everyone but tobacco bondholders and the people trying to balance its 2014 budget. The state is diverting $420 million–$60 million a year for seven years–from the general fund to the 1-B and 1-C bonds in return for $91.6 million today and something 27 years down the road. Maybe.

I think taxpayers would be better off had the state kept the cash to help its troubled pension funds or to pay for services or to pay its non-tobacco bonds, including the transportation issues that I own.