Pa. Tobacco Settlement Funds Secretly Diverted To General Fund

HARRISBURG, Pa. (CBS) - Pennsylvania's auditor general says more than a billion dollars in tobacco settlement funds intended for health-related programs have been quietly raided to balance the state budget in recent years.

In 2001, lawmakers enacted a bill stipulating that tobacco funds should be spent on a number of health programs, including the just-ended insurance program for low-income adults, AdultBasic. Auditor General Jack Wagner says that roadmap was followed until 2005, when the mandates were quietly overridden.

"There was a funding source for AdultBasic and a score of other health programs. But it has been quietly diverted in recent years to patch holes in the general budget, without any public discussion."

Another program that took a hard hit was smoking prevention and cessation. Wagner says #$1.33 billion have been diverted, representing about 30-percent of the Tobacco Settlement Payment monies received since 1999, something he calls a "fiasco of a budgetary gimmick."

Reported by Tony Romeo, KYW Newsradio