Tobacco money looms as big issue
RICHMOND -- If state legislators could only figure out a legal way to spend every dollar twice they would be able to avoid an emotional debate this year weighing competing demands for investment in transportation and health care.
There are some regional pressures at work. Northern Virginia Democrats pounded the drum for increased transportation spending during last year's elections, and they're under pressure to follow through. Some Southwest and Southside legislators are being urged to make sure the money at the center of the debate -- Virginia's share of the national tobacco settlement -- is spent in tobacco-dependent communities and not strewn across the state.
There also are political pressures. House Democrats, who find themselves in the minority for the first time in 117 years, are debating the issue with the greatest urgency as they seek to pound out an agenda that will clearly differentiate them from Republicans and energize key constituencies. Gov. Jim Gilmore is asking Republicans to back his transportation plan, which relies heavily on the tobacco money.
So far, however, the debate has not fallen along regional or political lines.
"It's mostly personal convictions," said Sen. Madison Marye, D-Shawsville, an advocate for health care spending.
At issue is a chunk of money the General Assembly did not earmark when it roughed out a plan for spending the tobacco settlement. The legislature agreed last year that half of the money should be used for direct assistance to farmers and economic development projects for tobacco-dependent communities. Gilmore has suggested that some of that money go to Virginia Tech and other colleges and universities. Another 10 percent was set aside for an anti-smoking campaign aimed at youth. That leaves 40 percent to argue over.
The amount of money in question is substantial. Virginia is scheduled to receive $83 million for the current year. Annual payments will vary, but they are projected to typically be about $143 million for the first decade of the settlement.
With so much money at stake, how to spend it will be heavily lobbied. Many business groups and local governments are eager for the new roads and public transit projects those dollars could buy. Health care organizations have formed a coalition to advocate their position.
"We haven't gotten the doors slammed in our faces by any means," said Bill Cimino, spokesman for the Medical Society of Virginia.
Some House Democrats are eager to adopt the health care issue as their own because it meshes well with the HMO reform agenda they pushed last year. House Minority Leader Richard Cranwell of Vinton has proposed using tobacco dollars to fund a program that would assist older adults with prescription drug costs.
"It's a giant of an issue just bubbling under the surface," said Cranwell, who would like to link the program to a transportation initiative in much the way he helped pass a school construction grant program on the back of Gilmore's car tax relief legislation.
Democrats can't afford to cede the transportation issue to Republicans. Last year, Democrats beat Gilmore to the punch and proposed spending tobacco money on roads before the governor announced his plan to do the same. Del. Barnie Day, D-Patrick County, was the first to propose the idea.
"I think we've got to have both," Day said. "I certainly don't want to be put in the position of having to choose between transportation or health care."
Finding a solution has proven difficult. Last year, House Democrats unveiled their health care agenda on the opening day of the legislative session. This year, three days have slipped by without a similar announcement.
"The inority eader has indicated it's absolutely critical that we come to a consensus immediately because we can't be three weeks into the session and change courses and be effective," said Assistant Minority Leader Tom Jackson of Hillsville.
House Republicans view Democrats ' efforts to forge the debate into a partisan battle with trepidation.
"I don't think it's taken on a party-line mentality," said Majority Leader Morgan Griffith of Salem. "I would hate to see this become a party-line issue."
If Democrats use health care to undermine Gilmore's transportation plan, Griffith predicted, the party could find itself being blamed the next time a traffic pileup turns Northern Virginia into a giant parking lot.
While some Republican insiders say transportation is a unifying issue for the party, there are dissenters.
"I can tell you we're not unanimous," said Del. Harvey Morgan, R-Gloucester. "I have to do what I think is right."
Morgan is a pharmacist, and he represents a part of the state with a high concentration of retirees. He's also a member of a committee studying long-term health care needs. He points out that the fastest growing segment of the U.S. population is 85 and over, and the demographics will continue to move in that direction as aby oomers reach retirement age.
Del. Allen Dudley, R-Rocky Mount, understands those arguments, and he said he also gets plenty of constituent calls about expensive prescription drugs. But Dudley said he also has a commitment to legislators from suburban areas who agreed to give the bulk of the tobacco settlement to Southside growers and communities. If they want some of the remainder to ease their congestion, he said, it will be hard for him to ignore their pleas.
State senators are typically less inclined than their House colleagues to agitate and fret over hot-button issues, at least in part because they face election less frequently. Neither Republicans nor Democrats in the Senate have held any substantive discussions on the topic yet.
"I think there's a lot of differences of opinion," said Sen. Edd Houck, D-Spotsylvania County.
Houck said the debate creates a dilemma for Northern Virginia Democrats, who face pressure to ease congestion in the region but have also traditionally been leaders in efforts to bolster human services funding in the state.
One of the most influential voices in the debate will be Sen. John Chichester, R-Fredericksburg, the chairman of the Senate Finance Committee.
Chichester said legislators must first educate themselves about the intricacies of the tobacco settlement and some of the financing mechanisms Gilmore is proposing to use for his road plans. Gilmore wants to sell 40 percent of the state's tobacco allocation for a 40-year period to investors for an up-front lump sum payment. The state would get $570 million up front for roads, but the amount it would get over the next 40 years would drop from $2.9 billion to $1 billion.
Chichester said he favors spending the money on research through the Commonwealth Health Research Board, which distributes grants for medical and biomedical research related to identifying the causes of diseases and finding cures.
The research board was created when Trigon became a for-profit company. As a part of that deal, Virginia received $10 million in Trigon stock. Interest off that stock is distributed in grants each year. Last fall, the board awarded $700,000 in grants, which require a one-third match from the college or institution receiving the money.
Former state Sen. Hunter Andrews, a member of the board, said this year the group has decided to expand its scope to include mental health research as well. The Hampton Democrat said any money received from the tobacco settlement would likely be designated for research specifically aimed at tobacco-related illnesses.
Andrews, a legislative veteran who once headed the Finance Committee , said he expects the current debate over the tobacco money, as with most debates, will end in compromise.
"I suspect they'll sprinkle it around," he said.