Topeka Attorney General Phill Kline said Tuesday he will draft a proposal to keep sales of discount cigarettes from cutting into the state's tobacco revenues.
Kline told the Senate Ways and Means Committee that sales of discount cigarettes are eroding major tobacco companies' sales, reducing the amount the major companies pay to states under a 1998 settlement of state lawsuits.
Kansas law requires companies not participating in the settlement to pay money as well, but Kline said the law underestimates those firms' market share in the state. Kline said his office is drafting legislation to change the calculations.
Kline said Kansas will receive $49 million in tobacco settlement funds in the fiscal year beginning July 1, about $3.1 million less than previously anticipated.
But Gov. Kathleen Sebelius' budget proposal assumes the state will receive $56 million in tobacco payments during the next fiscal year, of which Sebelius wants to spend $7 million to expand programs for young children.
Neither Kline nor State Budget Director Duane Goossen could explain the conflicting numbers Tuesday.