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, D-Topeka, 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.