Auditor General Jack Wagner to Hold Public Hearings on How Tobacco Settlement Money Should be Used

Says taxpayers deserve say in how the remaining $5.4 billion should be spent

HARRISBURG, Pa., April 21, 2011 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner announced today that he will hold a series of public meetings around the commonwealth over the next three weeks to solicit public comment about whether $370 million a-year in tobacco settlement funds should continue to be spent on health-related items, such as cancer research, smoking prevention and cessation, and adultBasic health insurance for working Pennsylvanians, or on other budget priorities.

"This is the people's money, and they should have a voice in how it is spent," Wagner said.

The hearing schedule:

• 10 a.m.-2 p.m. Monday, April 25, in Pittsburgh City Council chambers, fifth floor of City-County Building, 414 Grant. St., Pittsburgh. Among those scheduled to testify: Robert Nelkin, president of the United Way of Allegheny County; Annette Fetchko, free healthcare clinic director of Catholic Charities; Sarah Steele, communications director of the American Lung Association.
• 10 a.m.-2 p.m. Tuesday, April 26, in Erie Council chambers, first floor of City Hall, 626 State St., Erie. Scheduled to testify: Del Birch, vice president of community building of the United Way of Erie; Erie Catholic Charities; John Schultz, chief executive officer of Erie Community Health Net; and Charles P. LaVallee, director of the Homeless Education Network of the Homeless Children's Education Fund.
• 10 a.m.-2 p.m. Tuesday, May 3, in Scranton City Council chambers, 340 N. Washington Ave., Scranton. Scheduled to testify:  Alice Dalla Palu, Executive Director Tobacco Free Northeast; Robert Durkin, Executive Director Northeast Regional Cancer Institute; Tony Delonti, American Lung Association; Lisa Durkin, Deputy Director United Neighborhood Services; Sister Ann Walsh, Friends of the Poor; Sister Janet Jeffers, Catholic Social Services.
• 10 a.m.-2 p.m. Wednesday, May 11, in Philadelphia Council chambers, Room 400 City Hall, Philadelphia. Details will be announced when they are finalized.

Members of the general public also are invited to testify.

Pennsylvania was among 46 states that settled a lawsuit in 1998 against tobacco companies to recover the costs of tobacco-related illnesses. The settlement called for Pennsylvania to receive approximately $10 billion over a 25-year period, in annual installment payments of $300 million to $400 million.

Pennsylvania has received about $4.5 billion to date and is scheduled to receive another $5.4 billion or more over the next 15 years.

At the recommendation of then-Gov. Tom Ridge, the General Assembly passed legislation in 2001 that specifically earmarked tobacco settlement money to fund health-related programs for Pennsylvania citizens, including programs for smoking prevention and cessation and adultBasic health insurance, which provided financial subsidies to working Pennsylvanians who earned too much money to qualify for Medicaid but not enough to purchase insurance on their own.

But according to a report issued by Wagner in March, the General Assembly has diverted nearly one-third of the tobacco funds received so far, or about $1.34 billion, to other budget priorities.  

More than 41,000 working Pennsylvanians lost their health insurance in February when the private insurers' portion of adultBasic funding expired. The Corbett administration said there was no money available to continue adultBasic, which had a waiting list of more than 400,000, and its budget proposal for the 2011-12 fiscal year permanently diverts all future tobacco settlement payments away from the adultBasic program.  

Wagner said the General Assembly and Gov. Corbett should seek a combination of public and private financing to continue adultBasic funding until national health care begins in January 2014.

"With Pennsylvanians still struggling to overcome the biggest economic downturn since the Great Depression, adultBasic health insurance is needed now more than ever," Wagner said. "Instead of eliminating the program, state government should be reaching out to the non-profit private health insurers, charitable foundations and other private-sector organizations to find a solution to Pennsylvania's health-care crisis."

Wagner said he decided to hold public hearings to let the public help decide how tobacco funds should be spent, and that he would present the results of his hearings to the governor and the General Assembly.  

Over the past six months, Wagner, the state's independent fiscal watchdog, has highlighted many ways that the state could save money without reducing vital services to Pennsylvanians. His suggestions, which include reforming the state's charter school funding formula and reducing the error rate in Medicaid spending, now total more than $1.3 billion for the 2011-12 fiscal year and $6 billion over the next four years.  These reports, including the auditor general's findings on Tobacco Settlement Funds, are available to the public at www.auditorgen.state.pa.us.

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly.  He is the commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations.  The Department of the Auditor General conducts thousands of audits each year.  To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's website at www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General

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