Rep. Don Schroeder, R-Hesston, offers sharp questions at a Kansas Chamber lobbyist who advocated selling off a portion of the state's interests in future tobacco settlement payments to close the state's budget gap for one year.

Topeka ? Members of a House committee showed little enthusiasm Thursday for a proposal by conservatives to sell off a portion of the state’s interest in future tobacco settlement payments.

A group of conservatives from the House and Senate calling themselves the “Truth Caucus,” led by Sen. Ty Masterson, R-Andover, made that proposal earlier in the wrap-up session, arguing it was a way to close the state’s burgeoning budget gap, at least for one year, without raising taxes.

On Thursday, the House Appropriations Committee opened a hearing on that proposal, where a lobbyist for the Kansas Chamber of Commerce testified in support of the idea.

Rep. Don Schroeder, R-Hesston, offers sharp questions at a Kansas Chamber lobbyist who advocated selling off a portion of the state's interests in future tobacco settlement payments to close the state's budget gap for one year.

“We just want to express our support for efforts and ideas that balance the budget without requiring a tax increase,” said Chamber lobbyist Eric Stafford.

Kansas receives about $60 million a year in payments from a 1998 settlement of a multi-state lawsuit against the tobacco industry. The basis of the suit was that states had incurred huge costs in their Medicaid programs for treating smoking-related illnesses.

Kansas enacted a law that year directing that the money would be deposited into the Kansas Endowment for Youth. From there, a certain amount would be appropriated each year into the Children’s Initiatives Fund, which funds early childhood health and education programs.

Recommendations on the spending of that money comes from a group known as the Kansas Children’s Cabinet.

Gov. Sam Brownback, who supports selling off the tobacco payments, has proposed doing away with that process and putting the tobacco money directly into the state general fund while giving lawmakers discretion over how to spend it. But his proposal has drawn stiff, bipartisan opposition throughout the session.

The previous day, Stafford noted, the Chamber released a poll it had commissioned suggesting that majorities of Kansas voters opposed “raising taxes on the middle class” or on “small businesses.”

Rep. Don Schroeder, R-Hesston, however, said the plan would only provide the state with a one-time infusion of cash while leaving the state with projected deficits in the future.

“Would you care to share with us where you would prefer to cut the budget in order to make it balance?” Schroeder asked.

Stafford declined, saying the Chamber does not get involved in making recommendations about specific agency budgets.

Schroeder continued pressing his question, demanding an answer, but Stafford declined to make spending cut recommendations.

Committee chairman Troy Waymaster, R-Bunker Hill, eventually halted the exchange, at which point Schroeder said, “A little bit of credibility lost.”

Waymaster himself challenged Stafford on the polling numbers.

“I have had numerous businesses who are classified as the LLC’s (limited liability companies) and proprietorships that got the exemption in 2012 who have come to me and said, this is unfair. It’s inequitable, and we feel that we should be put back on the tax rolls,” Waymaster said.

Rep. Barbara Ballard, D-Lawrence, also challenged Stafford on the survey.

“If I was to ask this question in Lawrence, Kansas, the highest numbers would be to raise (taxes),” she said. “That’s what they would say, ‘to raise,’ because they realize the state that we are in.”

A survey released earlier this year by Fort Hays State University also found most Kansans opposed raising taxes on small businesses and the middle class. But 60 percent said they supported raising taxes on large businesses, while nearly as many, 58 percent, said they supported raising taxes on top income earners.

The plan for selling off the state’s interest in future payments involves setting up a corporation called the Great Plains Tobacco Settlement Financing Corporation as an affiliate of the Kansas Development Finance Authority, the agency that manages bond issues for the state.

The Secretary of Administration, then, would be authorized to sell all or part of the state’s interest in future settlement payments to that corporation, which in turn would market those “assets” to the private investment market.

The two separate bills that make up the plan do not specify whether the corporation would be for-profit or nonprofit, nor do they specify who would serve on the corporation’s board of directors.

Attorney General Derek Schmidt’s office, which handles receiving the settlement payments, submitted written testimony opposing the plan. The group Kansas Action for Children, which lobbies for children’s programs funded by tobacco settlement payments, also testified in opposition.