Posted on 04/16/2002 11:10:28 AM PDT by jern
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By WADE RAWLINS, Staff Writer
Gov. Mike Easley moved Monday to seize $60 million in payments to the Tobacco Trust Fund and the Health and Wellness Trust Fund, in case more money is needed to plug the state's $900 million-plus shortfall this year.
Cari Boyce, a spokeswoman for Easley, said the administration would decide this week whether to place in escrow the intercepted payments to the two funds, which receive part of North Carolina's share of the national tobacco manufacturers' settlement with the states.
She said the decision to seize the money was no indication of worry by the Easley administration that the budget hole was getting bigger.
"The governor wants to have every resource available to him in balancing the budget," Boyce said. "It's really just a matter of being prepared."
The leaders of both trust funds expressed concern about Easley's move since the trust funds were set up to be isolated from budget pressure. But both acknowledged the difficulty presented by the budget shortfall.
The $60 million in intercepted payments is on top of $1.2 billion that the administration has already identified to deal with a budget shortfall estimated to exceed $900 million by June 30. The size of the budget gap will be clearer after the state receives April tax collections.
"The shortfall is a moving target," Boyce said. "We're waiting on the April numbers to see where we are. Once we have better numbers, we'll make a final decision."
The Health and Wellness Trust Fund and the Tobacco Trust Fund were created to insulate the tobacco payments from the yearly political pressure in the legislative budgeting process. Each fund receives one-fourth of the money coming to the state from the national tobacco settlement. Over 25 years, each fund is to receive more than $1.1 billion.
Legislative budget writers are considering intercepting some of next April's tobacco payments to the trust funds to help close next year's projected $1.2 billion budget gap.
The Health and Wellness Trust Fund's charter is to address the health needs of vulnerable and underserved populations.
"We all fully understand the dire fiscal situation facing our state," Lt. Gov. Beverly Perdue, chairwoman of the Health and Wellness fund, said in a statement. "However, we can't afford to lose any more ground, especially in light of the North Carolina Progress Board's recently documented indicators of poor health care in this state, including disproportionately high rates of heart disease, stroke and diabetes."
Perdue said the trust fund's aim was to invest money to prevent disease as well as treat it.
"I hope the day will come when the folks in North Carolina understand that an up-front investment saves millions and millions of Medicaid dollars," Perdue said. "Limiting the scope of this opportunity would be a tremendous loss to the people of North Carolina."
In December, the Health and Wellness Trust Fund voted to spend a large chunk of its money, $105 million over three years, to help elderly residents buy prescription drugs.
Boyce said the $100 million balance in the Health and Wellness fund would cover the cost of the prescription drug program -- which Easley touted during his gubernatorial campaign.
"The prescription drug plan will move forward," Boyce said.
Meanwhile, the Tobacco Trust Fund was established to provide direct compensation to individuals and companies affected by declining tobacco demand and consumption, and to finance agricultural research at universities, government agencies and private organizations.
Billy Carter, a Moore County tobacco farmer and chairman of the Tobacco Trust Fund, said he was concerned about the seizure of the funds.
"We are concerned that this should not occur again," Carter said. "We want to make sure in the future the money continues to flow. It has the potential to do a lot of good."
Carter said administration officials indicated they were anticipating the shortfall could grow.
Carter said that none of the April payment had been committed and that the trust fund had money on hand to cover any grant under consideration.
"The governor had been so diligent in avoiding using these funds and expressed his regret at having to," Carter said. "It's a little difficult to not be aware of the difficult situation he is in."
Staff writer Wade Rawlins can be reached at 829-4528 or wrawlins@newsobserver.com.
Seems to me that this money (blackmail) was to cover the burden to the healthcare system caused by evil smokers.
<sarcasm>But I thought that money was for children's health? </sarcasm>
The tobacco lawsuits were the biggest scam this side of Microsoft. Without exception, every single state that has settled has either spent this money or handed it away to red diaper doper baby law firms with political connections.
The Health and Wellness Trust Fund's charter is to address the health needs of vulnerable and underserved populations
Hmmmm. Maybe the Governor has a point here.
After all, with Easley being a Democrat and both branches of the legislature being heavily Democrat, North Carolinians are certainly "vulnerable" and "underserved"!
Roll ON, Guv! It's better you steal the tobacco money to cover your out-of-control spending than you steal our tax dollars to plug into your bottomless spending hole!!
HA!...what a rip off!
FMCDH!
:)
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