Tobacco lawsuit freezes $258 million in state budget for human-services programs

smoking

COLUMBUS — The new state budget relies in part on $258 million to pay for human-services programs, but the money is frozen because of a Franklin County court case.

The money is tied up in a lawsuit brought by anti-smoking advocates trying to stop Gov. Ted Strickland’s plan to drain $230 million from the Tobacco Use Prevention and Control Foundation, and the legal maneuver has health and human services advocates worried.

The $51 billion two-year state budget passed by Ohio lawmakers on Monday snatches up the $258 million (the $230 million plus interest) and divides it up to cover an array of human services. The plan is to spend $80 million of the money the first year and $178 million in 2011.

The biggest chunk — $129 million — is spent to cover optional Medicaid services such as vision, podiatry, dental and hospice care, while $92 million would be spent on adult and child protective services.

A trio of other programs soaks up the additional money, with $30 million slated for health care for needy children, $5 million for breast and cervical cancer screenings and $2.2 million for a “buy-in” program helping special-needs children get health-care coverage. The plan to tap the frozen funds was a little-noticed part of a “balanced-budget framework” Strickland announced June 19.

But can the state use money that has been declared off-limits by a judge?

Gayle Channing Tenenbaum, legislative director for the Public Children Services Association of Ohio, said she is “deeply concerned about the precarious nature of the funding, since it is not at all clear at this point if the court will be able to free up these dollars for these intended purposes.”

Col Owens, a senior attorney for the Legal Aid Society of Southwest Ohio, said he is worried because “it would appear the availability for these purposes is subject to some question and uncertainty.”

With county human-service agencies already having absorbed a $167 million budget cut, Channing Tenenbaum said a loss of $258 million more would be shattering.

“If these dollars weren’t available, it would be a disaster for abused and neglected children we serve, the frail elderly we serve, and the people who are needing the optional Medicaid services,” she said.

The frozen funding is one of several question marks hanging over the budget, expected to be signed soon by Strickland. Some lawmakers have questioned the administration’s estimate that a plan for slot machines at racetracks will generate $933 million, given the likely court challenges. Others have questioned whether the state’s revenue estimates — which have missed the mark repeatedly in recent months — will be any more accurate over the next two years.

The $258 million is on ice while Franklin County Common Pleas Judge David Fais decides whether the state can use the money, which the foundation received from the national settlement of lawsuits against the major tobacco companies, toward a $1.57 billion economic stimulus package. The state has repeatedly used tobacco settlement money over the years to balance its budget.

A preliminary ruling from Fais on Feb. 10 casts doubt on whether the state can spend the foundation money for anything other than tobacco-related health programs.

Fais ruled that the anti-tobacco forces had a “substantial likelihood of success” because Ohio law set up the tobacco foundation as a trust for the specific use of tobacco cessation and prevention.

The state has argued that the money can be used for economic development because it serves an important state purpose. The state has not told the court about the change in plans for the money. Strickland announced his budget plan three days after the last court filing.

Fais wasn’t aware that the state had new plans until contacted by The Plain Dealer on Tuesday.

“No one has contacted our office with anything related to that,” said Tim Jackson, Fais’ bailiff. The judge did not return calls seeking comment.

An attorney who represents the American Legacy Foundation, an anti-smoking group that is a party to the lawsuit, said any spending plans are on hold until the case is settled. “The court has made it clear that injunction moneys not be used for anything other than tobacco prevention and cessation purposes,” said attorney Stuart Parsell.

Even Strickland’s office isn’t entirely clear if the money can be used.

“We’re working with the attorney general’s office to clarify how we can use these funds,” said Amanda Wurst, a Strickland spokeswoman. The attorney general’s office declined to comment.

Parsell said the state has to use the money for anti-tobacco programs “regardless of the different purposes for which the state seeks to use the fund every other week.”

source: http://www.cleveland.com

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