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Could Tobacco Money Help Ease Kansas's Woes?

The Wichita Eagle

If you live in Kansas, you might have heard the phrase “tobacco securitization” lately. It’s an idea that could help ease the burden from the state’s $290 million budget hole, reports The Wichita Eagle.

Governor Sam Brownback loves the idea. But what is it?

In 1998 Kansas was one of the states that won a lawsuit against the nation’s four largest tobacco companies. As a result, Kansas receives annual payments based on cigarette sales. That money goes to pay for early childhood programs. Kansas expects to receive about $58 million in the next fiscal year. But instead, the state could sell off the rights to part of its tobacco money for the next 20 to 30 years, in exchange for about $160 million now.

This could make a lot of sense, because cigarette sales have been declining for years. 19 other states have already done enacted the plan.