April 22, 2021

Lawmakers seek to eliminate Chiles Fund, transfer $1 billion to reserves

Florida lawmakers might wipe out a special account used to pay for health care and biomedical research and set up with money from a landmark 1997 settlement with tobacco companies

The House Appropriations Committee on Wednesday voted to scrap a fund named after former Gov. Lawton Chiles, the last Democrat elected as governor. Chiles helped engineer a behind-the-scenes effort to get the Legislature to allow the lawsuit that led to the massive settlement.

The measure approved Wednesday would eliminate the Lawton Chiles Endowment Fund and transfer nearly $1 billion from the endowment to the state budget stabilization fund --- which is one of the state’s main reserve accounts --- no later than June 30, 2022.

Appropriations Chairman Jay Trumbull, R-Panama City, noted that over the years lawmakers have borrowed money from the Chiles endowment and sometimes have not repaid it.

“This action will help to make sure the funds are truly used as a reserve and help as a savings account rather than an investment portfolio,” Trumbull said.

But Rep. Joe Geller, D-Aventura, argued that the fund should be maintained.

“Yes we’ve raided this trust fund in the past,” Geller said. “The fact that we did not do the right thing in the past doesn’t strike me as justification for doing something even worse as we move forward. We’ve raided it in the past, and we shouldn’t have. It doesn't mean we should get rid of it. It means we should respect the purpose for which it’s there.”

The Chiles fund was created by the Legislature in 1999 at the request of then-Gov. Jeb Bush to provide perpetual support for health-care programs and biomedical research.

The settlement was made possible because the Chiles administration during the waning hours of the 1994 legislative session successfully passed a bill that altered Medicaid law to allow the state to sue tobacco manufacturers on behalf of Medicaid beneficiaries who smoked.

At the behest of Associated Industries of Florida and tobacco companies, the Legislature in 1995 passed a subsequent law meant to blunt the 1994 law. Chiles vetoed the subsequent law, and an attempt to override the veto in 1996 fell just short.

A year later, tobacco companies agreed to pay Florida $11.3 billion over a 25-year period to recoup the state’s costs for smoking-related illnesses of Medicaid patients. The companies also were required as part of the settlement to remove billboard advertisements. In 2006, Florida voters passed a constitutional amendment that requires a portion of money from the settlement agreement be used for anti-smoking campaigns.

Geller called Chiles, who also served three terms in the U.S. Senate, a great leader and asked that the fund remain intact to continue his memory.

“Sometimes time affects our memory,” Geller said. “The Lawton Chiles trust fund was a singular step forward in history, not only in the state of Florida but in the United States.”

Chiles served as governor from 1991 to 1998, winning his second term in 1994 by defeating Bush, the Republican nominee.

Chiles suffered a heart attack and died on Dec. 12, 1998, 23 days before Bush --- who won the 1998 election --- was sworn in as governor. Buddy MacKay, who had served as lieutenant governor, was sworn in as governor to finish Chiles’ term.

Tags: News Service of Florida

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