Even before the territory's $50 million share of the national $206 billion tobacco settlement was determined, the V.I. Legislature decided to split the money between retroactive wages and hospitals, via the Health Care Revolving Fund.
The League of Women Voters of the Virgin Islands, however, has asked the Senate to revise the law which pre-allocated the funds — Act 6220 — so all the money can be spent on health care.
"The League of Women Voters seeks an amendment to Act 6220 to dedicate all funds realized from the tobacco settlement for uses in accordance with the stated purpose of the suit against the tobacco industry," LWV President Erva Denham wrote to Senate President Vargrave Richards Monday.
"These funds should, therefore, be used for smoking-related health care costs, for an anti-smoking education program and for other health care-related purposes, including a possible match for the annual Medicaid grant," Denham wrote. "These funds should not be used for salaries of any kind."
The tobacco suit was brought against the tobacco industry by a coalition of state and territorial attorneys general seeking reimbursement for the costs their governments incurred treating smoking-related illnesses.
The territory's share of the settlement is split into two payments: beginning in April 2000, the Virgin Islands will receive a total of $34 million over 25 years and an additional $15 million over 10 years.
Overall, the territory should receive about $2.8 million a year.
The LWV's fear the money would be spent on salaries was kindled, perhaps, by Assistant Attorney General Alva Swan, when he spoke last month at the group's luncheon.
"A further problem with the provision of the Act is that, at various times, the Health Care Revolving Fund has been used for salaries," Swan said. "The prospect therefore is that the entire proceeds from the Virgin Islands' share of the tobacco fund, all $50 million, could conceivably be used to pay retroactive wages, as well as current wages, over the 25-year life of the settlement."
Swan also told the LWV the territory could not receive the funds in a lump sum.
"The question I am going to anticipate is whether we can shorten the time from 25 years to five years, where that $25 million can have a greater impact. The answer is still no, it can't be done," Swan said. "The payment structure may be a blessing in disguise, in that we will not be able to spend all $50 million at one time, as we would if the funds were available to us in a lump-sum payment."
Denham further stated that other "community groups" also feel the funds should be used for health care for the indigent and senior citizens as well as for smoking-related health costs.
"No one can question that these areas in the territory need financial support now," she wrote. "The League of Women Voters of the Virgin Islands expects the 23rd Legislature to amend Act 6220 to dedicate all of the tobacco settlement funds for the health needs of the people of the Virgin Islands."
