Pa. auditor general blasts tobacco fund diversion

Pennsylvania Auditor General Jack Wagner wants Gov. Tom Corbett and state lawmakers to stop raiding the state’s Tobacco Settlement Fund to help balance the budget.

In a special report, the Democrat detailed how the $300 million-plus payments have been diverted from health-care issues, and used to fund pensions, the state budget and other efforts. Wagner, who said more than $1.3 billion has been taken from the fund since 2005, urged legislators to change the trend.

“Are we going to squander it? Are we going to just let it be used for a wide variety of purposes? Is it going to patch potholes? Is it going to fill budgets for various departments, including the Department of Auditor General and others? What is our priority,” he demanded Thursday .

The money flows from a 1998 settlement with tobacco companies. It is supposed to fund programs like adultBasic insurance, anti-smoking campaigns and medical research. (A 2001 law put the financial distribution in place.) In recent years, legislators have reallocated the money during the budget process. Last year, for example, $250 million was sent to the general fund.

Wagner pointed to the state’s anti-tobacco campaign as one victim of the reallocation. The program was receiving $51 million in 2002, but got just $15 million in funding last year. Among other things, the campaign is supposed to advertise a smoking-cessation hot line.

“You don’t know it, because you haven’t seen much advertisement about it, because the funds have been drastically cut,” Wagner said. “The financial cutbacks have reduced the quit-smoking campaign to only one – and I repeat one – statewide media effort each year.”

Wagner suggested tobacco money could be used to restart adultBasic, the low-income health insurance program that ran out of funding this week.

With a multibillion-dollar deficit looming, however, leaders will likely look to revenue sources such as the tobacco fund to help fill the budget gap without raising taxes.