Selling bonds to generate a large amount of cash from the state’s tobacco settlement remains a budget balancing option. But there appears to be growing opposition to the idea in the Kansas Legislature. More from Jim McLean, of the KHI News Service.
State budget director Shawn Sullivan says no deal is under discussion. But he says trading years of steady tobacco payments for hundreds of millions in up-front cash remains an option if the state’s budget problems continue to worsen. But opposition to the idea appears to be growing on both sides of the legislative aisle. Senator Laura Kelly, a Topeka Democrat, says cashing in the settlement would jeopardize funding children’s programs. "It’s a dumb idea. I think it borders on fiscal malpractice,” said Kelley. Senator Les Donovan, a Wichita Republican, is more restrained, but he’s also against the idea. "I don’t think it’s a good deal. Frankly you’re going to get less than full value," said Donovan. A lot less. A review of the deals pitched to Kansas officials by the banking giant Citigroup shows that payments to bond holders would come close to doubling the up-front cash generated for the state.