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Surplus tobacco settlement funds spark Kan. debate

Published on -4/26/2013, 1:59 PM

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TOPEKA, Kan. (AP) -- Kansas has received more money than expected from tobacco settlement funds for the second straight year, sparking a debate in Topeka over where the nearly $5 million surplus should be spent.

Under state law, money from the landmark 1998 settlement is to be spent on early childhood programs approved by a group of experts called the Kansas Children's Cabinet, the Topeka Capital-Journal (http://bit.ly/Y923nI) reported. Any money that comes in above what was budgeted is supposed to be put into the Kansas Endowment for Youth, which was set up to help fund the programs after the settlement runs out.

But the endowment is nearly broke after being routinely raided since it was established in the late 1990s, and lawmakers aren't showing a willingness to replenish it as other budgets are strained.

Kansas received a settlement check this week for $60.2 million, though it had budgeted only $55.8 million.

"We are pleased to learn that this year's tobacco settlement payment is more than enough to fully fund early education programs as recommended by the governor," said Shannon Cotsoradis, president and CEO of Kansas Action for Children and a member of the children's cabinet. "However, it won't do us any good to repeat the mistakes of the past by sweeping additional money from the settlement payment into the state general fund."

That's probably not going to happen, said Sen. Laura Kelly, a Topeka Democrat and member of the children's cabinet, because of a fiscal crunch created by income tax cuts she opposed.

Sen. Ty Masterson, an Andover Republican who is chairman of the Senate Ways and Means Committee, said the additional funds would allow the Legislature to take back most of the $4.6 million in early childhood block grants that were to be funded by the state general fund.

He said the block grants can now be funded with tobacco money, as they usually are.

Under the 1998 Master Settlement Agreement, participating tobacco product manufacturers agreed to make billions in payments to 46 states, Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam, the U.S. commonwealth of the Northern Mariana Islands and the District of Columbia over more than two decades.

States first received full payments under the settlement in 1999, and it was estimated that the companies would pay about $206 billion over 25 years.

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