$55.9 million tobacco settlement received in Kansas

A $55.9 million payment from the annual tobacco settlement has been received by Kansas, according to Attorney General Derek Schmidt.

According to the attorney general, the amount of the payment is consistent with the estimate provided last fall to consensus revenue estimators.

The annual payment reimburses the state for funds previously appropriated by the Legislature to pay the current fiscal year’s cost of programs financed from tobacco settlement proceeds.

Each year the Legislature appropriates funds that will not be received until the following April, and then reimburses that amount when the annual payment is received, because of the timing of the payment and the state budget cycle, according to the attorney general’s office.

Kansas has received more than $1.1 billion from the participating tobacco manufacturers since the first payment was made in 1999. The payments were intended to offset the costs of tobacco-related illness and diseases that are borne by Kansas taxpayers through government-paid medical benefits. Kansas is one of 46 states that made claims in a lawsuit against the tobacco companies in the late 1990s.

Although the Kansas Consensus Revenue Estimating group met on Thursday to revise revenue estimates up slightly for the coming years, Gov. Laura Kelly on Thursday urged legislators to remain cautious. Estimates increased a total of $14.9 million for fiscal years 2020 and 2021.

“Kansas has been on a roller coaster for the last eight years and we must allow adequate time to recover and rebuild,” Kelly said in a news release. “It’s encouraging that revenue remains stable as a result of steady, responsible tax policy, but we must remain cautious.”

In the news release, Kelly pointed out the Federal Reserve had recently lowered its forecast on economic growth for 2019 from 2.3 percent to 2.1 percent.

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