Children’s fund transfer prompting objections to budget deal

by Jim McLean, KHI News Service
Topeka — Children’s advocates are crying foul over a last-minute budget deal that transfers $5 million from a fund used to pay for early childhood programs to an agency that invests state money in promising bioscience companies.
April Holman, policy director for the nonprofit advocacy organization Kansas Action for Children, said House and Senate budget negotiators gave no advance notice that the transfer was under consideration.
“They never talked about this until they came back for their very last meeting,” Holman said. “Rep. Sullentrop said they wanted to transfer the money to the bioscience authority, Sen. Masterson said ‘we agree’ and it was a done deal in 20 seconds.”
Rep. Gene Suellentrop and Sen. Ty Masterson are the chairs of the House Appropriations and Senate Ways and Means Committees respectively. They are both Republicans.
The bill transfers the money from Kansas Endowment for Youth, or KEY fund, to the Kansas Bioscience Authority, increasing its budget from $27 million to $32 million.
“There were some concerns that the bioscience authority couldn’t fulfill its function if we cut them clear down to $27 million,” Masterson said.
The authority was created to make strategic investments in emerging Kansas bioscience companies and to assist in attracting new ones to the state. Money from the state’s settlement with the nation’s major tobacco companies is first deposited into the KEY fund. Portions of it are then allocated to the Children’s Initiatives Fund and used to support a variety of childhood development programs.
The transfer is included in a bill that finishes the Legislature’s work on a $14.6 billion budget for the fiscal year that starts July 1.
The Senate voted 22-18 early Friday afternoon to approve the budget bill. It was then approved by the House.
Sen. Laura Kelly of Topeka, the ranking Democrat on the budget writing committee, refused to sign the conference committee agreement because she said it didn’t address the state’s deteriorating revenue situation and because of the transfer.
“We’re taking money out of the mouths of babes,” Kelly said. “It is not like we’re over-budgeted in early childhood programs. There are lots of kids on waiting lists for services.”
The last-minute deal, Holman said, increases concerns that the tobacco settlement money is being purposefully underestimated so that Gov. Sam Brownback and Republican legislative leaders have some unallocated funds left at the end of the session that they can use to plug holes in the budget.
“It has become a pattern and it really makes us question whether that has been the goal all along,” she said.
Last year, lawmakers swept $9.5 million from the CIF into the state general fund to cover other expenses.
Attorney General Derek Schmidt announced on April 18 that state had received $62.2 million in tobacco settlement funds, $7 million more than his original estimate.
Kansas Action for Children filed a lawsuit in Shawnee District Court a year ago asking the court to order Schmidt to release copies of settlement records. The court recently denied a motion filed by Schmidt that likely would have led to the case being dismissed.
Money from the tobacco settlement flows to the KEY fund. Then money goes from there to the Children’s Initiatives Fund to support a variety of childhood development programs.
The endowment fund was created by the Legislature in 1999 with the goal that it would be invested to help sustain the children’s programs when budgets were tight or tobacco dollars fluctuated.
But that never happened, Cotsoradis said, in part because the state used more than $140 million from the tobacco settlement over the years to shore up general state coffers, including $9.5 million for this year’s budget.
“Essentially, the Kansas Endowment for Youth is broke,” Cotsoradis said. “The fund that was intended to ensure these programs are paid for in perpetuity has nothing in it.”
Lawmakers approved historic tax cuts in 2012 that are projected to leave the state treasury essentially empty by fiscal 2016.

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