HARRISBURG -- The state's largest universities are waging a quiet tug-of-war over millions of research dollars that could become available through Pennsylvania's $11 billion tobacco settlement windfall.

The battle pits Penn State University against the universities of Pennsylvania and Pittsburgh -- the two traditional leaders in medical research statewide. Lehigh University also could gain. Penn and Pitt account for more than half the federal research dollars released to the state by the National Institutes of Health. Penn State and others want a change so the money is more evenly distributed -- in part by capping what Penn and Pitt collect. At stake is as much as $40 million each year for the next quarter-century -- tobacco money that would be used to seek cures for cancer and other smoking-related ailments. Gov. Tom Ridge has proposed directing 10 percent of the state's annual $400 million into such research. Pennsylvania is getting the money as part of a national settlement with major tobacco companies. Battles over spending the tobacco money on university research have been fought largely below the radar, in contrast to the highly public fight over using the windfall to expand the state's prescription drug coverage program for senior citizens. Penn State, Pitt and Penn have carefully espoused the opportunities the research money would provide for all Pennsylvanians. But state officials have described their private negotiations among the schools as touchy at times. "Part of you says, 'Boy these folks are making this really contentious,'" said Andrew Crompton, counsel to Senate President Pro Tempore Robert Jubelirer, R-Blair. "I think part of the problem is these institutions have had their expectations raised throughout this process." NIH is the traditional conduit for medical research money into Pennsylvania. Penn and Pitt, the primary beneficiaries under NIH guidelines, want tobacco money divvied up by the same process. The two schools defend the NIH guidelines, saying all awards are based on peer review from within the research community, a mechanism that removes politics. But Penn State argues that that doesn't leave much for the rest of the state's research facilities, including Lehigh. One of the smaller beneficiaries of NIH funding, Lehigh has gotten about $1 million a year since 1998. Penn and Pitt have received $1.4 billion of the $2.5 billion in NIH funding received by the state between 1998 and 2000. Overall, Pennsylvania trails only California, Massachusetts and New York in the amount of money awarded through the NIH. Penn State ranks third in the state in NIH funding, but its share is considerably less, accounting for only 7 percent of the state's NIH funding since 1998. The debate is helping hold up final passage of a spending plan for the tobacco money, state officials said. Pennsylvania is one of only three states that has failed to adopt such a plan. State lawmakers face mounting public pressure to get something done. The educational institutions haven't turned their disagreement into a major public debate yet. Senate GOP counsel Stephen MacNett said that's probably wise. "Frankly, it is my hope that they can come to some joint recommendation that would be preferable to an arbitrary or political decision by [House and Senate] leadership," MacNett said. Without a cap, roughly $20 million would be split between Pitt and Penn. That would leave $20 million for a number of qualifying research centers across the state, including Penn State and noted Philadelphia-area research institutions such as Temple and Thomas Jefferson universities, as well as the Fox Chase Cancer Center. A cap "would make it easier and give relative parity," said Anne Mentzer, a legislative liaison for Penn State. "It's something that could help every institution" that has received smaller amounts. Ridge supports a cap but wants it to be fair, said Ridge spokeswoman Gretchen Toner. "Under the NIH, Pitt would get a huge windfall of money," Toner said. "We would like to see Penn State not get penalized because of this circumstance. We're looking forward to having everyone come to an agreement over a cap that introduces more fairness." Russ Molloy, a government relations specialist for Penn, said the Ivy League university is taking a "realistic" approach to the negotiations. "We are not trying to promote caps being put into place," he said, "but we're taking a very broad look at this." Pitt spokesman Ken Service said university officials "understand the political realities that would support a rational cap." Although the proposal continues to be a work in progress, lawmakers seem to largely agree on at least one criteria for eligibility: Research centers must have secured grants through the NIH in each of the three preceding fiscal years. Lehigh would qualify, but its grant would be minuscule, leaving some state officials questioning whether smaller awards should be eliminated to create more funding for larger research institutions. Other possibilities include creating minimum awards for all who qualify and boosting the pot by offering grants to individual researchers who would apply to the Department of Health on a case-by-case basis.

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