Politics & Government

Kansas Senate president Wagle criticizes proposal to use tobacco settlement to fix budget hole

Kansas Senate President Susan Wagle said that it would require legislation to change the structure of the tobacco settlement and doesn’t think it would find enough support in the Legislature to pass.
Kansas Senate President Susan Wagle said that it would require legislation to change the structure of the tobacco settlement and doesn’t think it would find enough support in the Legislature to pass. File photo

Kansas Senate President Susan Wagle panned a proposal being weighed by Gov. Sam Brownback to sell off the state’s proceeds from a legal settlement with tobacco companies.

“I think that’s a desperate move. And I just don’t think the legislators are going to vote for it,” Wagle, R-Wichita, said this week after it was revealed by the Topeka Capital-Journal this past weekend that Brownback presented the idea to Wagle and other legislative leaders earlier this month.

Kansas currently uses the tobacco settlement money to fund children’s programs.

Banking giant CitiGroup presented the idea of selling off the state’s share of a 1998 settlement with tobacco companies on the bond market as a way to get an influx of cash into state coffers in October. Rhode Island used CitiGroup to issue $621 million in bonds last year through its share of the same tobacco settlement.

The governor’s office said last week that no action was taken as a result of the October meeting, but the Capital-Journal reported Saturday that the governor had presented the plan to legislative leaders at a closed meeting on March 2, a day after it was announced that the state had missed revenue estimates by more than $50 million in February, plunging the state back into a budget hole.

The governor’s chief of staff, Jon Hummel, and spokeswoman, Eileen Hawley, acknowledged the meeting but would not say whether bonding the tobacco settlement was Brownback’s preferred course of action to fix the budget hole.

“I would reinforce that the Governor and legislative leadership continue to have ongoing discussions about a variety of solutions for the budget shortfall,” Hawley said in an e-mail.

“No decision has been made and one is not likely to be made until after the April consensus revenue meeting,” she said, referring to the meeting in which the state’s economists will revise revenue projections.

Rep. Ron Ryckman, R-Olathe, chairman of the House Appropriations Committee, said last week that he did not want to discount any options for closing the shortfall, including using the settlement money to issue bonds. However, he said he would want to safeguard the children’s programs currently funded by the annual payment the state receives for the settlement.

Wagle said it would require legislation to do this and doesn’t think it would find enough support in the Legislature to pass.

“I think most of our legislators are very concerned of being structurally in a deficit situation right now,” she said.

Bryan Lowry: 785-296-3006, @BryanLowry3

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