TOPEKA — The Children's Cabinet should start planning to receive as little as $12 million in tobacco dollars — or $44 million less than current funding — for programs in fiscal 2014, said chair Amanda Adkins at a cabinet meeting today.

Adkins was relaying an estimate from Attorney General Derek Schmidt of "the absolute worst-case scenario" if an arbitration panel rules against Kansas and other states in a dispute with tobacco companies.

"We could have to pay back or be on the hook for as much as $42 million, which means in fiscal year 2014 our tobacco settlement dollars could be as low as ... $12 million. That is just the hard reality in which we find ourselves right now," Adkins said. "If we're really committed to the work that's being done by everybody in this room, we have to plan for the worst-case scenario."

The Children's Cabinet oversees the Children's Initiatives Fund, or CIF, which gets its money from tobacco settlement payments that Kansas and 45 other states negotiated in 1998 with four major tobacco companies. Among the 20 or so CIF programs are Early Head Start, child care and services that assist at-risk families, such as those with disabled children.

Kansas received $56 million in fiscal year 2013 and has received $761 million in total since 1999. However, tens of millions of those funds could be reclaimed out of future payments if an arbitration panel agrees with tobacco companies, which claim Kansas and 31 other states haven't upheld their end of the settlement. The panel is expected to issue its ruling in June.

Cabinet member Sen. Laura Kelly, a Topeka Democrat, said she would like more information on how the attorney general's office arrived at its projection.

"I think it's important to be prepared for disaster, but I'm not convinced we have a disaster on the way," Kelly told KHI News Service, noting that that last year the attorney general projected $40 million in tobacco receipts and the state ultimately received $56 million.

When asked how officials arrived at the $12 million figure, a spokesman for the attorney general declined to comment.

"As this matter is in arbitration we decline comment," Jeff Wagaman wrote in an email today.

Preparing for the worst

Adkins said cabinet members should start planning for the worst-case scenario by seeking funding from additional sources, including businesses, charitable organizations and the state.

During the meeting, she said Gov. Sam Brownback supports CIF early childhood programs. But in her meetings with the governor, he has not indicated whether his budget recommendation might include state funding to make up for loss of tobacco funds, said Adkins, also the chairwoman of the Kansas Republican Party.

"His statement in our meeting was that he was committed to exploring finding existing funds," Adkins told KHI News Service. "They're looking at different options, several different paths. They haven't expressed to us yet specifically where the dollars would come from, but they are absolutely exploring options."

Also she said that cabinet members should begin prioritizing existing programs for discussion at the cabinet's November meeting.

In the past, cabinet members have prioritized programs for pregnant mothers and children under 5 years old, Adkins said. "That's a great starting point. That's going to narrow the list straight out of the gate," she said.

Cabinet member Shannon Cotsoradis — also the chief executive of Kansas Action for Children — expressed concerns with a contingency plan that involves drastically reducing CIF programs.

"What's most troubling is the idea that $12 million is the fall-back position. From my perspective, the fall-back position is another revenue source. I don't think it's reasonable to expect kids to pay the price," said Cotsoradis after the meeting.

"We need to be looking for another way to fill that gap and make sure that we fund essential early childhood infrastructure. If this is a priority for the administration, there are other revenue sources out there that could fill this hole," she said.