Thursday, October 8, 2015

Policy decisions required for unappropriated tobacco funds

FRANKFORT—Kentucky currently has around $7 million in unallocated tobacco funds left over from a 2014 settlement and may have about $16 million in additional unallocated funds coming in the next budget cycle, a legislative oversight committee heard yesterday.

The estimated $7 million is part of the “additional money that had not been budgeted”—as Governor’s Office of Agricultural Policy (GOAP) Director Roger Thomas described it—that the state received as part of a 2014 settlement with tobacco companies stemming from the 1998 Master Settlement Agreement. (The agreement has brought more than $446 million in agriculture investment to the state since 2001.)  The estimated $16 million would be over and above the state’s anticipated 2016 tobacco settlement payment dollars, Thomas said.

“Depending on what the 2016 payment is, it’s possible that there’s an additional $20 million or thereabouts of unallocated funds,” said Thomas, stressing that he was sharing the figures from memory. “The $16 million I mentioned is only if the 2016 MSA payment is that amount above what was budgeted.”

The testimony came after Sen. Carroll Gibson, R-Leitchfield, asked Thomas about allocation of additional unbudgeted money the state received as part of the 2014 settlement, which brought Kentucky more than $57 million in extra unbudgeted tobacco funds over three years. 

Thomas said distribution of the additional money has thus far adhered to the statutory formula for allocation of Kentucky’s Master Settlement Agreement payments: 50 percent for agriculture, 25 percent for health initiatives, and 25 percent for early childhood programs. Part of the money—around $42.5 million, according to the Governor’s Office in 2014—has been used by Governor Steve Beshear to beef up already-authorized programs that would have otherwise been underfunded.