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Charlotte Amalie
Wednesday, July 6, 2022
HomeNewsArchivesFINANCE OKAYS ALL TOBACCO MONEY FOR HEALTH

FINANCE OKAYS ALL TOBACCO MONEY FOR HEALTH

The Senate Finance Committee voted Tuesday to commit all of the territory's proceeds from the national tobacco settlement — anticipated to be nearly $50 million to be paid out over the next 25 years — to health care. The action came in the form of an amendment to legislation passed two years ago splitting the money 50/50 between health and union arbitration funds.
The amendment will now go to the Rules Committee. If Rules approves it, the measure will go to the full Senate. If passed, it will be sent to the governor for final action.
The legislation passed in March 1998 called for dividing the anticipated funds equally between the Health Revolving Fund and the Union Arbitration Fund. Health interests have sought to repeal the law and allocate all of the money to health care. Union representatives have vigorously opposed that idea.
Last month Sen. Allie-Allison Petrus introduced an amendment to allocate 80 percent to health concerns and 20 percent to the arbitration fund. Union leaders also opposed this move.
Tuesday's amendment was offered by Sens. Violet Anne Golden, Lorraine Berry, George Goodwin and Gregory Bennerson. Golden introduced the measure, which calls for distributing the territory's share of the settlement as follows:
– 36 percent to the Health Department for prevention and long-term care, with a special amount set aside for health-related capital improvement projects.
– 32 percent to the Roy L. Schneider Hospital for basic health care including a cancer center.
– 32 percent to the 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 — to be distributed to the territory over 25 years — could best be managed.
"The funds are contingent on the will of the people to smoke themselves to death," he said, adding that over the next 25 years the tobacco companies could go bankrupt. Also, he said, 20 years from now, with inflation, today's dollar could be worth 20 cents.
Francis said he had asked the investment firm of Salomon Smith Barney to analyze the possibilities for "securitizing" the payments that the V.I. government is to receive. In a detailed statement, he said one option would be to accept a lesser sum now, secured by another entity, and thereby protect the government from any future responsibility. "In other words," he said, "get it, get out and let somebody else assume the rest."
In other action, the Finance Committee approved a federal grant application from the Planning and Natural Resources Department for $100,000 to develop a water-quality management planning program for the territory. PNR Commissioner Dean Plaskett and his water quality manager, Hollis Griffin, testified in support of the measure. The U.S. Environmental Protection Agency grant would require no matching local funds.
Legislative post-auditor Campbell R. Malone said in his analysis of the proposal that there has been no territorial waste-treatment management plan in place for about 20 years. He said the government must have such a plan in order to be eligible for various EPA grant programs.
The Finance Committee also approved an appropriation transfer to pay personnel in the Office of Inspector General, correcting a technical error in the fiscal year 2000 Executive Budget Act. The corrected totals are $125,000 for unclassified workers and $387,757 for classified positions.
The change was needed to reflect the appropriate level of expenditures for each line item, and does not change the year's budget for the office, Malone said in his memorandum on the matter.

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The Senate Finance Committee voted Tuesday to commit all of the territory's proceeds from the national tobacco settlement -- anticipated to be nearly $50 million to be paid out over the next 25 years -- to health care. The action came in the form of an amendment to legislation passed two years ago splitting the money 50/50 between health and union arbitration funds.
The amendment will now go to the Rules Committee. If Rules approves it, the measure will go to the full Senate. If passed, it will be sent to the governor for final action.
The legislation passed in March 1998 called for dividing the anticipated funds equally between the Health Revolving Fund and the Union Arbitration Fund. Health interests have sought to repeal the law and allocate all of the money to health care. Union representatives have vigorously opposed that idea.
Last month Sen. Allie-Allison Petrus introduced an amendment to allocate 80 percent to health concerns and 20 percent to the arbitration fund. Union leaders also opposed this move.
Tuesday's amendment was offered by Sens. Violet Anne Golden, Lorraine Berry, George Goodwin and Gregory Bennerson. Golden introduced the measure, which calls for distributing the territory's share of the settlement as follows:
- 36 percent to the Health Department for prevention and long-term care, with a special amount set aside for health-related capital improvement projects.
- 32 percent to the Roy L. Schneider Hospital for basic health care including a cancer center.
- 32 percent to the 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 -- to be distributed to the territory over 25 years -- could best be managed.
"The funds are contingent on the will of the people to smoke themselves to death," he said, adding that over the next 25 years the tobacco companies could go bankrupt. Also, he said, 20 years from now, with inflation, today's dollar could be worth 20 cents.
Francis said he had asked the investment firm of Salomon Smith Barney to analyze the possibilities for "securitizing" the payments that the V.I. government is to receive. In a detailed statement, he said one option would be to accept a lesser sum now, secured by another entity, and thereby protect the government from any future responsibility. "In other words," he said, "get it, get out and let somebody else assume the rest."
In other action, the Finance Committee approved a federal grant application from the Planning and Natural Resources Department for $100,000 to develop a water-quality management planning program for the territory. PNR Commissioner Dean Plaskett and his water quality manager, Hollis Griffin, testified in support of the measure. The U.S. Environmental Protection Agency grant would require no matching local funds.
Legislative post-auditor Campbell R. Malone said in his analysis of the proposal that there has been no territorial waste-treatment management plan in place for about 20 years. He said the government must have such a plan in order to be eligible for various EPA grant programs.
The Finance Committee also approved an appropriation transfer to pay personnel in the Office of Inspector General, correcting a technical error in the fiscal year 2000 Executive Budget Act. The corrected totals are $125,000 for unclassified workers and $387,757 for classified positions.
The change was needed to reflect the appropriate level of expenditures for each line item, and does not change the year's budget for the office, Malone said in his memorandum on the matter.