PA Auditor: Stop Raiding Tobacco Funds

A Special report out of the Pennsylvania Auditor General’s office today outlines how state lawmakers have diverted $1.3 billion in Tobacco Settlement funds in recent years without asking for any public input. In 2001 the General Assembly mandated that annual tobacco settlement payments be divided by set percentages among several accounts. Eight percent was to be deposited to an endowment account for the future, 30 percent for adultBasic and Medicaid for workers with disabilities, 18 percent for health research, 13 percent for home and community-based services for the elderly, 12 percent for tobacco prevention and cessation programs, 10 percent to reimburse hospitals for uncompensated care, eight percent to expand the PACENET prescription drug program, and one percent for cancer research. Wagner says in recent years those ratios have been ignored.

Wagner says the legislature has diverted funds to pay for Medicaid and to prop up the general fund. He says the endowment that was to provide for health needs in the future will be completely drained later this year.

Since 1998 the state has received $4.4 Billion in tobacco settlement funds. Payments to the state over the next seven years are expected to average $370 million. Between 2019 and 2025 they are expected to average $355 million a year.

Wagner is calling on the state legislature and the governor to immediately use all incoming funds to reopen the low income health insurance program adultBasic and then hold a series of public hearings on the allocation of future funds. “Things may have changed over time and maybe more funds should be directed to one program or the other,” says Wagner “but those decisions should be made in a public process, with public input. Something that has not happened since the inception of tobacco settlement funds.”

Wagner says, “It’s about time there is a little bit of sunshine into this process.” He says it is not too late to rebuild the endowment fund and it is not too late to save adultBasic for the more than 40,000 individuals who lost coverage this week.