Debt service on the state’s borrowing against future proceeds from the national master tobacco settlement agreement should be paid using state sales and use tax revenue, SNAP has declared in a new position statement.

Last year the state borrowed $1.5 billion against future proceeds from the tobacco settlement.  Some tobacco settlement money is used to help hospitals with the cost of uncompensated care they provide via tobacco uncompensated care payments and tobacco extraordinary expense payments made to hospitals that meet specific criteria:  how much uncompensated care they provide, the proportion of their patients insured by Medicaid, and the proportion of low-income seniors they serve.  All Pennsylvania safety-net hospitals qualify for these payments.

Because the state’s borrowing against future tobacco settlement proceeds was never intended to result in a reduction of these payments in the future, SNAP has issued a position statement endorsing the Wolf administration’s suggestion, in its proposed FY 2020 budget, to pay debt service on its tobacco borrowing with sales and use tax revenue.