Tobacco Cash Used for Social Services
By Mary Ellen Klas and Marc Caputo, The Miami Herald
Apr. 24–TALLAHASSEE — About 40,000 of Florida’s most seriously sick and poor people won’t have their state-paid health coverage cut — at least for now — after state budget negotiators agreed Wednesday to siphon $300 million from a tobacco-settlement savings account.
The decision to salvage the Medically Needy and the Medicaid Aged-and-Disabled programs followed intense lobbying by social services advocates and Gov. Charlie Crist, who argued the desperation measure was necessary to help protect Florida’s most frail residents.
But while the decision to use the Lawton Chiles Tobacco Endowment for Children and Elders will temporarily keep those programs alive and free up money in the healthcare budget, social service advocates now are worried.
They don’t want the tobacco money — won by Gov. Lawton Chiles in a hard-fought $11.3 billion settlement with cigarette makers in 1997 — to become a piggy bank for lawmakers to make up for bad budget decisions of the past with no guarantee that money taken from the fund will ever be replaced.
“I have very mixed feelings,” said Rep. Lorann Ausley, a Tallahassee Democrat and longtime social services advocate. Ausley said she has spoken with Chiles’ widow, Rhea Chiles, who gave her blessing to tap the endowment under the impression that the money would be used to “support new services and new programs consistent with children’s healthcare” — issues her husband fought for.
“That’s not what we’re using this money for,” Ausley said. “This is clearly to fill a hole.”
Others found it ironic that the legacy of Chiles, a Democratic governor, has become the salvation for today’s Republican-led Legislature.
“These are the same people, the Republicans, who opposed the [tobacco] lawsuit,” said Dexter Douglass, Chiles’ former general counsel, who assembled the trial team that handled the case for the state. ‘Then they said, ‘Oh goody, we got the money’ and never looked back.”
Crist, who was a state senator when the lawsuit was filed, held ethics hearings at the time challenging Douglass and the creation of the legal team. But when Crist prepared his budget this year, he said he personally called Rhea Chiles to seek her permission to use $400 million of the endowment fund to pay for expanding KidCare, the health insurance program for poor kids, and offset other cuts.
PRINCIPAL USED
He and his staff have since lobbied legislators to dip into the fund, marking the first time lawmakers will tap the principal. The endowment is funded with proceeds from the settlement negotiated by Chiles, the first governor in the nation to sue the tobacco industry over false health claims.
The deal guarantees the state as much as $13 billion over 25 years, and the settlement stipulates that the money will be dedicated to anti-tobacco education for youth, children’s health programs and paying for treatment of smoking-related illnesses for the poor. But it was Chiles’ successor, Jeb Bush, who came up with the idea of setting aside $1.1 billion of the tobacco proceeds and using the interest to pay for programs true to Chiles’ legacy of children’s issues.
At the bill signing, Bush proudly proclaimed it would be “something the rest of the nation will look to.”
The money has been used for a variety of services, including community care for the elderly, cancer research and KidCare.
As the economy soared, the size of the fund grew, reaching a record $2.27 billion in February last year. The account has since lost $41 million, the first yearly decline in the endowment’s history. Now, with state revenues tanking, legislators see it as a pile of ready cash.
In addition to tapping $300 million for healthcare, Senate Republican Leader Dan Webster will pitch a plan Thursday to use another $500 million from the settlement to buy Alligator Alley from the Department of Transportation and use toll money to pay it back.
Webster compared it to “collecting interest off a bond or some other kind of investment stock” but “less risky.”
“That road is up for lease anyway,” he said. “And I think: Far better to lease it to ourselves and get the money back into a fund that provides healthcare for people in Florida.”
He said Crist has told him he supports the idea.
Another Democratic criticism: Republican legislative leaders have made the easy decision to raid the trust fund in an election year, instead of closing tax loopholes or increasing cigarette taxes by a dollar a pack.
The $300 million going to plug the holes in the Medically Needy and Medicaid Aged-and-Disabled programs is designed to be used for one year only. The funding would end with the fiscal year on June 30, 2009.
‘RIGHT THING’
“It’s the right thing to do,” said Rep. Ray Sansom, a Fort Walton Beach Republican and head of the House budget committee.
But the prospect of having the money guaranteed for only one year scares people like Mary Ellen Ross, a Delray Beach bone-marrow and liver-transplant survivor. Ever since her 1999 surgery, Ross has watched lawmakers threaten year after year to eliminate the Medically Needy program that keeps her alive.
“I’d like this roller coaster to stop,” she said. “We need this program to continue. This stress can kill people.”
Miami Herald staff writer Gary Fineout contributed to this report.
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