Another step toward settling the tobacco settlement funds was taken Tuesday as the Senate Finance Committee passed an amendment giving 100 percent of the monies to health care.
At issue was a law passed in March 1998, which divided the funds equally between the Health Revolving Fund and the Union Arbitration Fund. Health interests have sought to repeal the law, and give all the monies to health care.
Union representatives have vigorously opposed that idea.
Last month an amendment was introduced by Sen. Allie-Allison Petrus which allocated 80 percent of the funds to health concerns and the remaining 20 percent to the Union Arbitration Fund. Union representatives remained adamant that they should retain their 50 percent of the monies.
The amendment passed Tuesday, offered by Sens. V. Anne Golden, Lorraine Berry, George Goodwin and Gregory Bennerson, gives no money to the union fund.
Golden introduced the amendment, which would distribute the Virgin Islands' almost $50 million share of the settlement as follows:
– 36 percent to the Department of Health for prevention and long-term care, with a special amount set aside for health related capital improvement projects
– 32 percent to Roy L. Schneider Hospital for basic health care, including a cancer center
– 32 percent to Juan F. Luis Hospital for basic care services, including a cardiac treatment center.
Prior to the debate, Amadeo Francis, director of the Public Finance Authority, told the senators that before addressing the distribution of the tobacco funds, they needed to consider how the money could best be managed.
"The funds are contingent on the will of the people to smoke themselves to death," he said, explaining that it's possible that in 25 years the tobacco companies could go bankrupt. The funds allow $50 million to be distributed over a period of 25 years to the Virgin Islands government. Francis explained that because of inflation, in 20 years from now, today's dollar could be worth 20 cents.
Francis said he had asked the investment firm of Salomon Smith Barney to prepare an analysis on the possibilities of "securitizing" the payments that the V. I. government will receive in the next 25 years. In a detailed statement, Francis said this would mean accepting a lesser sum now, secured by another entity, and protecting the government from any future responsibility. In other words," he said, "get it, get out and let somebody else assume the rest."
The amendment will now go to the Rules committee, and then to the full Senate if it is approved by Rules. If passed, it will be forwarded to the governor for final action.
In other action, the Finance Committee approved a federal grant in the amount of $100,000 for the Department of Planning and Natural Resources water quality management planning, after taking supportive testimony from PNR commissioner Dean Plaskett and water quality manager Hollis Griffin. The grant requires no matching local funds.
The grant, funded by the U.S. Environmental Protection Agency, will be used for the sole purpose of planning a water quality management planning program for the territory.
Legislative post-Auditor, Campbell R. Malone, said in his analysis of the grant that the territory hasn't had an area-wide waste treatment management plan in place for approximately 20 years. He said the government must have such a plan in order to be eligible for other EPA federal grant programs.
The senators also approved an appropriation transfer to pay personnel in the V.I. Inspector General's office, correcting a transposition error contained in the Fiscal year 2000 Executive Budget Act. The correct amounts for unclassified and classified personal services in the FY 2000 budget are as follows: unclassified $125,000 and classified, $387,757.
The change is necessary in order to reflect the appropriate level of expenditures for each line item, and does not change the IG office's FY 2000 budget, Malone said in his memorandum on the matter.
