The 23rd Legislature has decided to hold public hearings on a proposed bill which would alter the allocation formula for the multi-million dollar tobacco settlement fund.
The move will pose a new challenge to unions representing Virgin Islands government workers, who were slated to get half the settlement via the Union Arbitration Awards Fund.
Sen. Allie-Allison Petrus is sponsoring the measure, which would reduce the percentage originally designated for the Arbitration Award and Increment Fund. In detailing the measure's intent, Petrus said Tuesday that while the unions need funds to pay retroactive wages, there are key concerns in the Health Department.
"Right now there is a situation where a lot of people are being diagnosed with cancer and we need to concentrate our efforts on early detection," Petrus said, adding that is just one area where increased funds are desperately needed.
"This measure is about placing the funds from this settlement where they rightly belong," said Petrus, who chairs the Senate Health Committee.
The Petrus proposal seeks to amend existing law and allocate 37.5 percent to the Health Revolving Fund for use by the Health Department; 21.25 percent to each territorial hospital; and 20 percent to the Union Arbitration Award and Increment Fund.
The current law had 50 percent of the settlement going to the arbitration fund.
Petrus said it is his intention that the tobacco settlement monies become available sooner to the territory for uses more consistent with the intent of the lawsuits that prevailed against "big tobacco."
"With this 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."
The territory is not necessarily going to try to leverage the tobacco-settlement monies for more readily available cash, the senator said, but under his proposal, the option would be available.
"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. There are a lot of options," Petrus said.
Finance Committee Chairwoman Lorraine Berry said Tuesday that the hearings will be held Feb. 8 and 9 in St. Thomas and St. Croix respectively, beginning each day at 10 a.m. The request for public hearings came from civic groups including the American Association of Retired Persons, the American Lung Association and the League of Women Voters.
As might be expected, the initial reaction from a union leader was negative and promised political consequences.
Glen J. Smith, who heads 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 warned that although there was a strong lobbying effort by the AARP for these amendments, "Petrus appears more interested in the votes of the senior community compared to the support of thousands of government workers in both districts. Those who take this position risk the political support of thousands of government workers."
The union leader said that while there are 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.
