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OFFICIALS FUME OVER THREAT TO EXHAUST TOBACCO FUNDS

Democrats in the County Legislature, "outraged" by what they call the end of Erie County's chances to make money by selling its tobacco settlement revenue stream, said Wednesday that a massive health-care package being pushed by state lawmakers is an unfair burden on local taxpayers.

"This is an outrage," said Crystal D. Peoples, D-Buffalo, Legislature majority leader. "It's just another unfunded mandate being placed on the backs of Erie County taxpayers."

The reaction came in response to a wide-ranging health care package, approved in the Assembly Wednesday and now before the State Senate, that calls for health coverage for up to a million uninsured New York State residents.

The Family Health Plus plan would mimic the state's existing Child Health Plus initiative -- which provides coverage to uninsured children throughout -- except for one important new factor: The family plan would require local counties to chip in 25 percent of the cost of providing coverage to uninsured adults.

A vote in the State Senate on the Health Care Reform Act -- 200 pages of legislation that includes the insurance plan -- could come next week or in early January.

Local Republicans, including the incoming administration of County Executive-elect Joel A. Giambra, said they need time to study the plan before the full impact on Erie County's tobacco settlement revenue can be gauged. If the plan decreases the number of people currently relying on Medicaid, some Republicans said, it may end up balancing out fiscally.

In the meantime, according to the Giambra administration, one thing is certain: The tobacco settlement money was never figured into Giambra's 30 percent tax cut for county residents, so that plan is untouched by the state's action.

"The Giambra administration tax cut plan did not contemplate relying on the tobacco settlement to fund tax cuts," said Bruce L. Fisher, Giambra's chief of staff. "Until I see what the numbers net out to be (on the health care), I don't know what the impact will be. But the tobacco securitizing is a whole separate issue."

But local Democrats said the mandate -- if it passes the State Senate as written -- would soak up nearly all the cash benefit from the county's $548 million share of the settlement.

Up to 30,000 county residents could be eligible for the expanded plan, they said.

The share of the plan Erie County is being asked to pay would amount to $236,194 in costs in 2000, rising to nearly $12 million by 2003, according to figures provided by the New York State Association of Counties.

"This Legislature has made a commitment to use the tobacco settlement money to lower taxes for residents," said Judith P. Fisher, D-Buffalo, chairwoman of the Legislature's Health Committee.

"Erie County residents have already paid once for smokers," Fisher said. "We don't need to ask our property taxpayers to come up with the bucks again."

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