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Kansas AG reports tobacco settlement money tops projections

State will get about $7 million more than previously forecast

By Dave Ranney | April 18, 2014

Kansas Attorney General Derek Schmidt today announced the receipt of $62.2 million from the tobacco master settlement agreement, which is about $7 million more than first projected as payment to the state for 2013.

Schmidt said the payments historically have fluctuated year to year, depending on several factors spelled out in the state’s 1998 settlement with the nation’s major tobacco companies, in which the companies agreed to reimburse Kansas and other states for the costs of treating sick smokers.

In Kansas, the annual payments are used to underwrite the state’s Children’s Initiatives Fund (CIF), which supports early childhood development programs throughout the state.

It remains to be seen whether the additional $7 million will reach the CIF. Lawmakers could decide to use the windfall otherwise.

Last year, Gov. Sam Brownback proposed – and legislators approved – a $9.5 million “sweep” of the tobacco revenues to fund other programs.

The advocacy group Kansas Action for Children has been critical of Schmidt, accusing his office of withholding information used in calculating the tobacco companies’ annual payments.

Schmidt, in a Friday press release, said his office has been “managing the settlement proceeds in a way calculated to minimizes the spikes and drops in receipts from year to year so that legislators and other Kansans can plan reliably.”

But Shannon Cotsoradis, chief executive of Kansas Action for Children, said: “today’s announcement from the Attorney General regarding Kansas’ tobacco settlement payment for 2014 leaves many questions unanswered. It’s unclear if a portion of the $62.2 million payment comes from the Disputed Payment Account that is a result of the arbitration settlement Kansas entered into last year or if those funds will be held over for future use.

“The lack of transparency regarding the unappropriated tobacco funds leaves important early childhood programs in jeopardy and with no hope for increased funding.”

Kansas Action for Children filed a lawsuit in Shawnee County District Court about a year ago asking the court to order Schmidt to release copies of the settlement records.

Cotsoradis said the court on Wednesday denied the Attorney General’s request for summary judgment, a move that likely would have led to the case being dismissed.

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