Citing uncertainty in the amount of money Kansas will receive from major tobacco companies as part of a long-standing legal settlement, Gov. Sam Brownback has proposed cutting $16 million from programs that promote parenting skills and early childhood development.
“The challenge the state faces with the anticipated tobacco settlement funding is that we will not learn how much the state actually will receive until three-quarters of the year have passed and after many grants have been released,” said Sherriene Jones-Sontag, the governor’s chief spokesperson, explaining the reason for the proposed spending cuts.
The move by the Governor’s Office has been endorsed by the chairman of the House Social Services Budget Committee but seems to have weaker support in the Senate. It also has alarmed children’s advocates, who say the proposed cuts would harm programs across the state if enacted.
For example, under the governor’s plan, state-funded support for the Parents as Teachers program would drop from the current $7.4 million to $5 million in fiscal 2013, which begins July 1.
“We see about 300 families now,” said Joan Dunn, who runs the Parents as Teachers program in Hays. “If what the governor is proposing goes through, we’d lose about a third of them. We’d have to lay off about a third of our staff. There’s just no way around it.
“Right now, more than 90 percent of our budget goes to salaries, fringe benefits and mileage because that’s what we do – we make home visits, we meet with families, we help them parent, we provide them with good research-based information,” Dunn said. “But that’s getting harder and harder to do when school districts are having to cut back on their support because their budgets have been cut, and when your health insurance costs go up 15 percent a year for the last three years.”
Supporters of the programs also dispute the governor’s rationale for the proposed cuts, saying other official projections of the amount the state likely will collect in settlement dollars exceed the amount assumed by the Brownback administration in its budget plan.
In November 2011, as members of the Kansas Children’s Cabinet were developing their proposed budget, the Attorney General’s Office predicted the state would collect $56 million, or $16 million more than the $40 million subsequently forecast by the governor in the budget he presented last month to the Legislature.
In 1980, Kansas became the first state to create a special fund dedicated to programs aimed at improving the lives of children and families. It was funded mostly by dollars collected as a surcharge on all marriage licenses issued in the state.
Children's advocates from around the state are scheduled to gather at the Statehouse on Wednesday. Among other things, they will be lobbying legislators to keep intact funding for the Children's Initiative Fund and the Earned Income Tax Credit. The governor and House Republicans, in their respective income tax reform plans, would eliminate the tax credit.
Then, in November 1998, Kansas was one of 46 states that entered into the so-called Tobacco Master Settlement Agreement with the nation’s leading tobacco companies. The settlement resulted from a lawsuit the states filed seeking recovery for their Medicaid costs associated with treating sick smokers. As part of the deal, the tobacco companies agreed to pay the states at least $206 billion over the first 25 years of the agreement.
Since then the settlement, overseen in Kansas by the Attorney General’s Office, annually has meant millions of dollars for Kansas, primarily for the Children’s Initiative Fund.
In 1999, the Children’s Cabinet was created to advise the governor and Legislature on how the trust fund dollars best could be spent.
Historically, representatives of the Attorney General’s Office each November advised the Children’s Cabinet on how much tobacco settlement money the state was expected to receive in the coming year.
The nine-member Children’s Cabinet would then use that estimate to make its recommendations to the Governor’s Office. The governor is free to accept, reject or modify the recommendations, but traditionally the Governor’s Office has accepted the settlement projection provided by the attorney general and the Children’s Cabinet.
The Brownback administration veered from that tradition and crafted its own projection of likely settlement dollars, creating alarm among children’s advocates.<a name="continued"></a>
Estimates fell short
Administration officials noted that settlement dollars had fallen short of estimates in both 2010 and 2011. Those deficits in the Children’s Initiative Fund were offset with transfers from the State General Fund: $1.2 million in 2010 and $6.7 million in 2011.
In 2011, disagreement between the House and Senate about how to make up the difference was one of the major sticking points as the Legisature tried to craft this year’s state budget.
Keeping the Promise
Tobacco settlement revenues typically are deposited in the Children’s Initiative Fund in April, nine months after the start of the state fiscal year.
According to the governor’s plan, if Kansas receives the full $56 million projected by the Attorney General’s Office, then the $16 million cut from the children’s programs for fiscal 2013 could be used to help fund them in fiscal 2014.
But that means the programs would have to absorb major cuts for no good reason, according to children’s advocates.
“This is unprecedented,” said Shannon Cotsoradis, chief executive of advocacy group Kansas Action for Children. “Never in the entire history of the Children’s Initiative Fund have the (tobacco company) checks come in at $40 million. The Governor’s Office can’t just say, ‘We want to be conservative, so we’re going to cut early childhood development programs by 30 percent. And if the money comes in, we’ll give it back next year.’
“There has to some justification for where they came up with the $40 million when the (attorney general) said to anticipate $56 million,” she said. “But the Governor’s Office has yet to give any indication of how it came up with the $40 million figure.”
A spokesperson for the governor said working from a conservative estimate would be less disruptive than trying to find extra money if the revenues came in short of estimates, as they did the past two years.
“Rather than scrambling after grants are committed and recipients have already made plans to spend the funding, the governor is making a conservative estimate for (fiscal) 2013 that the state will receive $40 million. Should the state receive more in the spring of 2013, the governor will dedicate all additional revenues to children’s programs and work with the Children’s Cabinet and stakeholders to channel those additional dollars to best meet the needs of Kansas children, but not until we have that money in hand,” Jones-Sontag said in an email to KHI News Service.
The governor’s plan, of course, requires legislative approval. In the House, at least, there seems to be solid support for the governor’s approach.
KHI News file photo
“I’m not very enthusiastic about subsidizing projects that have been traditionally funded by the Children’s Initiative Fund with State General Fund dollars,” said Rep. David Crum, an Augusta Republican who chairs the House Social Services Budget Committee. “I’m not wanting to go with the $56 million. I would want to stay with the governor’s recommendation until we were able to make more of a determination on how much funding will be available.”
But Sen. Carolyn McGinn, a Sedgwick Republican who chairs the Senate Ways and Means Committee, said she was concerned that the governor’s approach subverted the process put in place long ago by the Legislature with regards to children’s programs.
KHI News file photo
“I find it unfortunate that as a state we’ve gone to great lengths to create an agency, the Children’s Cabinet, that has an on-the-ground understanding of what the early childhood development needs are across the state and that’s in a position to make informed recommendations as to how best meet those needs, and now those recommendations are being ignored, essentially,” she said.
Sen. John Vratil, a Leawood Republican who also serves on the Ways and Means Committee, said if the governor can devise his own projections for the tobacco money, he could do the same with any other category of spending.
“We’re not going to play these games,” he said. “If (the governor) can go with $40 million instead of $56 million, then he can do the same with schools, with social services, with all kinds of stuff.”
Brownback’s proposal also calls for eliminating $5 million in Family Centered Systems of Care grants that community mental health centers use to support families with children who are mentally ill or emotionally disturbed.
“We use our grant to do whatever it takes to hold these families together. Because if you’re a single mom and you have a child with a serious mental illness and you’re trying to meet that child’s needs, navigate the system and hold on to your job, you’re going to need help,” said Brenda Mills, chief executive at the Topeka Family Service and Guidance Center.
Mills said the mental health centers use the grants to pay for family-support services not covered by Medicaid or private insurance.
“One of things that we’ve learned over the years is that we can work with the kids all day long,” she said. “But if we don’t work with the parents, these families are going to fall apart. And when they do, we’re going to see more and more kids in crisis situations.”