Topeka ? The Kansas Children’s Cabinet and Trust Fund, which promotes early-childhood programs in the state, has been warned that it could lose up to 75 percent of its budget next year because of a drop in money from a national lawsuit against tobacco companies.

Amanda Adkins, chairwoman of the cabinet, told the board Wednesday to prepare two recommendations — one that would assume the group would continue to receive $56 million in tobacco funds, with a second assuming it would receive only $12 million, The Topeka Capital-Journal reported.

“That is just the hard reality in which we find ourselves,” Adkins said.

Kansas and 30 other states are currently in arbitration over provisions in the tobacco case settlement, leading to speculation that funding for the trust will be cut.

“Anybody that goes to arbitration is going to lose some money,” said Mary Cohen, of the Barton P. & Mary D. Cohen Charitable Trust.

The cabinet receives its funding from a 1998 settlement with major tobacco companies. One of the provisions of that settlement required states to force smaller cigarette manufacturers to pay a $6 per carton fee to keep them from undercutting the bigger companies. The major manufacturers contend the states haven’t enforced that agreement.

Since it began in the late 1990s, the children’s cabinet anticipated the tobacco money funding its Children’s Initiatives Fund would eventually decline. Some of the money was put into a Kansas Endowment for Youth fund meant to keep the programs solvent after the funding was reduced.

But the state Legislature raided the KEY fund so often since 2001 that the governor’s office said in April that it only contained $261.

Board member Shannon Cotsoradis, president of Kansas Action for Children, said cutting back to $12 million would drastically reduce services that the Children’s Initiative Fund supports.

“You’re talking about a fund that serves hundreds of thousands of kids across the state,” Cotsoradis said. “Do the math. We’d be talking about a lot of kids losing access to services when they’re most vulnerable.”

Kansas Attorney General Derek Schmidt hasn’t yet released an estimate of how much the tobacco settlement will bring in this year.

Cotsoradis said that if the funding drops because the state didn’t enforce its part of the settlement, the state should find alternative money for the Children’s Initiative Fund programs.

Adkins, also the chairwoman of the Kansas Republican Party, said she talked to Gov. Sam Brownback about finding other funding, but she couldn’t say what other funding sources the governor could use for the cabinet.

Adkins told the board she is also interested in partnering with private-sector investors who have a commercial interest in the cabinet’s mission.