Tobacco Settlement Funds. December 9, 2008

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Hilary Potter
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1 Tobacco Settlement Funds December 9, 2008

2 History In 1996,Texas filed a federal lawsuit accusing the tobacco industry of violating conspiracy, racketeering, consumer protection, and other provisions of state and federal law. The state sought to recover billions of tax dollars it had spent to treat tobacco-related illnesses. In settling the lawsuit, the industry agreed to pay the state $15 billion over 25 years and to pay about $2.3 billion through 2003 to Texas counties and hospital districts based on their provision of indigent health care. Actual payments by the industry are subject to adjust formulas related to tobacco sales, inflation, and industry profitability. Under Texas settlement terms, payments from the industry rise or fall in proportion to U.S. consumption of cigarettes each year as consumption in Source Texas Department of State Health Services.

In settling the lawsuit, the industry agreed to pay the state $15 billion over 25 years and to pay about $2.

3 Tobacco Settlement Based on un-reimbursed healthcare expenditures, including jail health, plus 15% of that total. The use of the tobacco money is unrestricted. Does not require that tobacco funds be spent for a particular purpose. Source Texas Department of State Health Services.

The use of the tobacco money is unrestricted.

4 Cameron County s Pro Rata Tobacco Settlement Distribution County Expenditure Statement $1,958,338 County Indigent Health Care $2,190,278 Unreimbursed Jail Health Care $2,322,486 Additional un-reimbursed personal health care services provided to the general public $6,471,102 x 1.15 $7,441, for general administration Source Cameron County Auditors Office.

$2,322,486 Additional un-reimbursed personal health care services provided to the general

5 Tobacco Funds Received Year Previous Year Unreimbursed Health Care Expenditures Tobacco Funds Received $7,441, $9,708, $7,449, $7,979, $7,126, $5,481, $5,615, $5,243, $3,949, $331, $423, $321, $226, $128, $75, $67, $273, $353, Totals $59,996, $2,200, Source Texas Department of State Health Services.

65 $5,615,098.38 $5,243,876.00 $3,949,095.00 $331,446.54 $423,344.01 $321,236.03 $226,761.84 $128,049.42 $75,600.

6 Nine Years of Tobacco Funds Reportable Unreimbursed Health Care Expenditures: $59,996, Tobacco Funds Received: $ 2,200, Annual Average Tobacco Funds Received: $ 244, Percentage received ($2,200,946.26/$59,996,019.60): 3.6% To receive $1.00 in tobacco funds, county expends: $ Low: In 2002 received $ 67, High: In 2007 received $423, Source Cameron County Department of Health and Human Services.

58 Percentage received ($2,200,946.26/$59,996,019.60): 3.6% To receive $1.

7 Autopsies County Burials Health Care That Is Not Reimbursable Environmental Health Animal Control, Vector Control Eating and Drinking Rabies Control and Determination Veterans Service Office Source Texas Department of State Health Services.

Control Eating and Drinking Rabies Control and

8 Donations As a general donation, if a foundation gave money to the county, giving the county clear authority to use the money at the county s discretion, and the county used the money on healthcare, then the county could count it as an expense related to uncompensated health care. Source Texas Department of State Health Services.

county used the money on healthcare, then the county could count it as an expense

9 Considerations Health Authority - $60,000 Environmental Health Director - $30,000 Future Indigent Health Care Program Administrative Operations - $ 379,000 Source Cameron County Department of Health and Human Services.

Indigent Health Care Program Administrative Operations

10 Cameron County Department of Health and Human Services

11 General Fund Health Budget FY Budget Including Property Rental Prior Year Difference Prior Year Increase or Decrease Budget Excluding Property Rental Prior Year Difference Prior Year Increase or Decrease FY 1999 $1,246,562 n/a $1,246,562 n/a 0 FY 2000 $1,054,578 ($191,984) -15.4% $1,054,578 ($191,984) -15.4% FY 2001 $1,041,487 ($13,091) -1.2% $1,041,487 ($13,091) -1.2% FY 2002 $1,128,353 $86, % $1,118,537 $77, % FY 2003 $1,285,745 $157, % $1,239,252 $120, % FY 2004 $1,468,154 $182, % $1,366,764 $127, % FY 2005 $1,403,372 ($64,782) -4.4% $1,274,747 ($92,017) -6.7% FY 2006 $1,480,683 $77, % $1,351,218 $76, % FY 2007 $1,457,314 ($23,369) -1.6% $1,427,314 $76, % FY 2008 $1,569,654 $112, % $1,569,654 $142, % FY 2009 $1,853,226 $283, % $1,853,226 $283,572 *Budget excluding Port Isabel Clinic Office Lease (FY 2002), Tobacco Funds (FY 2007), and Administrative Office Building Lease (FY 2003, FY 2004, FY 2005, FY 2006 & FY 2007). Full Time hourly rate increase to $8.00 on Oct 1, 2005 Part Time hourly rate increase to $8.00 on Oct 1, 2007 Source Cameron County Department of Health and Human Services. 18.1%

2% FY 2002 $1,128,353 $86,866 8.3% $1,118,537 $77,050 7.4% FY 2003 $1,285,745 $157,392 13.9% $1,239,252 $120,715 10.8% FY 2004 $1,468,154 $182,409 14.2% $1,366,764 $127,512 10.

12 Cameron County Department of Health and Human Services Texas DSHS Program Income* County Program Total Immunization $ 268,072 $ 77,152 $ 34,165 $ 379, Public Health Response Program $ 638,064 $ 638, ORAS $ 96,825 $ 96, TB State $ 264,935 $ 3,000 $ 18,821 $ 286, TB Federal $ 222,111 $ 23,659 $ 245, Children with Special Health Care Needs $ 175,490 $ 30,429 $ 205, Maternal and Child Health/Family Planning $ 669,111 $ 96,739 $ 615,180 $ 1,381, WIC $ 3,845,019 $ 132,461 $ 3,977, Health General Fund Overhead $ 800,381 $ 800, Building Maintenance and Operations $ 375,455 Public Health General Fund Total** $ 6,179,627 $ 176,891 $ 2,030,551 $ 8,387, Indigent Burial $ 124,502 $ 124,502 Total $ 6,179,627 $ 176,891 $ 2,155,053 $ 8,511,571 *Program income budgeted based on historical revenues collected **Programs not included in the Public Health General Funds are Environmental Health, Veterans, Family Learning Centers General Fund $2,155,053 25% Funding Source Texas DSHS $6,179,627 73% Source Cameron County Department of Health and Human Services. Program Income $176,891 2%

Health Care Needs $ 175,490 $ 30,429 $ 205,919 270-6478 Maternal and Child Health/Family Planning $ 669,111 $ 96,739 $ 615,180 $ 1,381,030 320-6308 WIC $ 3,845,019 $ 132,461 $ 3,977,480 100-6300

13 Federal Poverty Level 0-100% Maximum Monthly Income for Household of Four Indigent (0-21%): $ 371 Poverty (0-100%): $1,767 Medicaid (133%): $2,350 WIC Program (185%): $3,269 Source Texas Department of State Health Services.

14 95% of Public Health Clients Are At or Below 100% FPL Federal Poverty Level (FPL) At or Below 21% 22% -100% Above 100% Average Percentage Public Health 33% 62% 5% Public Health General Fund $2,030,551 $666,021 $1,260,058 $104,472 Federal Poverty Level (FPL) At or Below 21% 22% -100% Above 100% Average Percentage Indigent Burials 80% 20% - Indigent Burial General Fund $124,502 $99,602 $24,900 $ - Total $2,155,053 $765,623 $1,284,958 $104,472 Excluded Programs: Environmental Health, Veterans, Family Learning Center Source Cameron County Department of Health and Human Services.

100% Average Percentage Indigent Burials 80% 20% - Indigent Burial General Fund $124,502 $99,602 $24,900 $ - Total $2,155,053 $765,623 $1,284,958

15 Sources of Information Texas Department of State Health Services at Cameron County Auditors Office Cameron County Department of Health and Human Services

Frequently Asked Questions

General Information Frequently Asked Questions 1. Who is qualified to receive a portion of the tobacco settlement proceeds? Political subdivisions as defined in the Agreement Regarding Disposition of Settlement