GOP leaders nearing consensus on best use of tobacco settlement
DES MOINES - Republican legislative leaders said they are nearing a consensus on how best to use the windfall from Iowa's tobacco settlement.
Although Gov. Tom Vilsack has already outlined a comprehensive plan to spend tobacco funds, Republicans who run the Legislature have yet to issue their own proposal. Republicans say they will likely focus their efforts on health care.
But from that starting point, Democratic and Republican approaches will likely differ. At stake are annual settlement payments of roughly $55 million Iowa is set to receive over the next two decades.
"It does appear as though the vast majority of this tobacco money is going to end up somehow in the health care area," said House Speaker Brent Siegrist, who hopes to nail down GOP aims by week's end. "We have the governor's proposal. We have some disagreements with him on that. We're going to work through those disagreements."
Republicans said they would try to reach a consensus this week. Agreement is needed as the GOP crafts a budget proposal to counter one offered by Vilsack. In his budget, Vilsack has proposed a broad array of tobacco-funded programs, including initiatives to expand health care insurance programs for children - including HAWK-I and Medicare - anti-smoking efforts and substance abuse treatment. With the $55 million in tobacco funds, Vilsack contends the state can leverage another $138 million in federal dollars.
Last week, Democrats in the Iowa Senate also proposed the creation of a $10 million program to help seniors pay for prescription drugs. The plan would kick in if Congress fails to agree on a similar program.
Republicans have expressed multiple reservations about Vilsack's approach.
Leaders said they are wary of putting tobacco dollars into ongoing programs, fearing economic forces that could reduce the size of Iowa's award.
For instance, a drop in cigarette sales is among the factors that could shrink payments and their duration. And they have doubts about the federal help Vilsack envisions.
"These dollars, we are very convinced, are not going to last forever," said Senate Majority Leader Stewart Iverson, R-Dows. "So then what happens when you spend $50 million in ongoing programs for 10 years and then the $50 million isn't there?"
Also, Republicans are critical of Vilsack's plan to expand programs such as HAWK-I, a state effort to provide childhood health insurance to low income families. Leaders point out that only a fraction of eligible children have signed up for the program in its current form.
"Before we start expanding eligibility, we ought to make sure that those people who are currently eligible for state assistance have access to health care," said House Majority Leader Christopher Rants, R-Sioux City.
Rants also opposes a Democratic proposal that would require insurance companies to pay for substance abuse treatment as they would treatment for traditional illnesses.
He contends such a move would lead to higher insurance premiums, pricing some working families out of coverage.