THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Wednesday, December 20, 1995           TAG: 9512200439
SECTION: FRONT                    PAGE: A17  EDITION: FINAL 
SOURCE: BY DAVID M. POOLE, STAFF WRITER 
DATELINE: RICHMOND                           LENGTH: Medium:   59 lines

PLAN TO TAP ENDOWMENT IS OPPOSED ALLEN WOULD DIRECT $95 MILLION FROM TRIGON FUNDS TOWARD HIGHER EDUCATION.

A consumer group claims that Gov. George F. Allen plans to raid a $159 million public endowment in order to balance the 1996-98 state budget.

``This isn't the governor's money to spend. All of it should be held in trust to benefit the public,'' said Jean Ann Fox, director of the Virginia Citizens Consumer Council.

Allen said Monday that his spending plan would tap into the endowment that Trigon Blue Cross Blue Shield pledges as part of its effort to become a for-profit corporation.

Allen wants to withdraw $95 million from the Trigon fund as a windfall to help appease business leaders and college presidents demanding more money for higher education.

``This is very, very important to the money higher education is going to receive in this budget,'' said Paul Timmreck, Allen's secretary of finance.

Consumer advocates who want to see the money held in long-term trust may find allies hard to come by when the General Assembly convenes next month.

Democratic lawmakers trying to make good on a promise to increase higher education funding by $200 million could find the Trigon money impossible to resist.

``Expediency is dictating how we use it,'' said Del. Mitch Van Yahres, D-Charlottesville.

Earlier this month, Trigon announced plans to donate $159 million to a yet-to-be-established foundation - provided the State Corporation Commission approves its application to become a stock company.

Attorney General James S. Gilmore III has said the Trigon offer, which he helped negotiate, would enable the public to benefit from some of the tax breaks that the insurer enjoyed for many years.

Gilmore will appoint the foundation board and draft a charter requiring that up to 60 percent of the endowment flow into the 1996-98 higher education budget.

Fox said that Allen was unwise to count on the Trigon money when the State Corporation Commission has yet to schedule a hearing on the case.

Deputy Attorney General Catherine C. Hammond said the Trigon money would serve a clear public need at a time when state-supported colleges and universities face a ``crisis'' in funding.

``The half that goes to education is an immediate benefit to the people of Virginia,'' she said.

Consumer groups argue the foundation's money should be held in trust and be dedicated toward a purpose more closely associated with Trigon's mission, such as providing health insurance to the indigent.

Siphoning off $95 million to plug holes in the education budget would mean the foundation could generate far less income in the future, Fox said.

``It doesn't sound like a endowment. It sounds more like tax money,'' she said.

``It's really unfortunate for the governor to raid the public's right to the Trigon money.'' by CNB