Kansas receives tobacco settlement payment

Kansas has received $62.2 million in its annual tobacco settlement payment.

According to Kansas Attorney General Derek Schmidt, the payment resulted from a legal settlement that Kansas entered into in 2012 with several tobacco companies to resolve a long-running dispute. The settlement term sheet was approved by an arbitration panel of retired federal judges in 2013.

Without the settlement, the dispute had threatened to cause a catastrophic reduction in future years’ payments to Kansas, according to Schmidt.

“As we said last year, the settlement in principle is having the effect of stabilizing Kansas’ annual payments,” Schmidt said. “We are managing the settlement proceeds in a way calculated to minimize the spikes or drops in receipts from year to year so that legislators and other Kansans can plan reliably.”

As it does each year, the annual payment will reimburse the state for funds previously appropriated by the Legislature to pay the current fiscal year’s cost of programs financed from tobacco settlement proceeds. Because of the timing of the annual tobacco payment in comparison with the state budget cycle, the Legislature each year appropriates the funds that will not be received until the following April and then reimburses that amount when the annual payment is received.

Each April, Kansas receives a payment pursuant to the 1998 Master Settlement Agreement. The amount of the payment fluctuates based on several variables, including annual sales of certain tobacco products.

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