The 23rd Legislature has decided to hold public hearings on a bill which would alter the allocation formula for the territory's multimillion-dollar tobacco settlement fund.
The move will pose a new challenge to unions representing government workers, who as things now stand are slated to get half of the settlement money via the Union Arbitration Award and Increment Fund.
Sen. Allie-Allison Petrus is sponsoring the measure, which would reduce the percentage designated for the Arbitration Award and Increment Fund. In detailing his bill's intent, Petrus said Tuesday that, while the unions are in need of funds to pay retroactive wages, there are critical concerns in the Health Department.
"Right now, there is a situation where a lot of people are being diagnosed with cancer," he said, "and we need to concentrate our efforts on early detection." But that is just one health area where increased funds are desperately needed, he added.
According to Petrus, who chairs the Senate Health Committee, "This measure is about placing the funds from this settlement where they rightly belong."
His bill would amend existing law to allocate 37.5 percent of the tobacco settlement proceeds to the Health Revolving Fund for use by the Health Department, 21.25 percent to each territorial hospital, and 20 percent to the union fund.
The current law has 50 percent of the settlement going to the arbitration fund.
Petrus said he intends for the settlement money to become available sooner to the territory for uses consistent with the intent of the lawsuits which prevailed against the big tobacco companies. "We will be able to use these monies to pay for bonds floated in the past," he said. "Also, the monies will be used directly for health-related causes in the territory."
Under his proposal, the option would be available to the territory to try to leverage the tobacco settlement funds for more readily available cash, he said Tuesday.
"These are guaranteed monies for the territory over the next 25 years and therefore could be used for early detection of terminal disease or as leverage against bonds floated for various projects in the territory," he said. "There are a lot of options."
Senate Finance Committee chair Lorraine Berry said Tuesday that the hearings will be held on Feb. 8 on St. Thomas and Feb. 9 on St. Croix, starting at 10 a.m. Community groups including the American Association of Retired Persons, the American Lung Association and the League of Women Voters had called for hearings to be held.
Initial reaction from union leadership was negative and promised political consequences. Glen J. Smith, head of the teachers union on St. Thomas, said Tuesday night, "My initial reaction is one of horror and anger and a general disdain for those who seek to take away from the workers."
Smith said although there was strong lobbying by the AARP for the proposed amendment, "Petrus appears more interested in the votes of the senior community compared to the support of thousands of government workers in both districts." He added that anyone taking that position risks losing "the political support of thousands of government workers."
The union leader said just as there are just as good reasons for spending the tobacco settlement funds as proposed, there also should be the commitment to unionized government workers to find an alternative source of funding for retroactive pay.