Missouri budget planners now know how much the state budget will lose from tobacco settlement money.

The Attorney General's Office estimates a ruling favoring tobacco companies will cost Missouri $70-million out of the Fiscal Year 2014 tobacco settlement payment.  (photo courtesy; Tim Bommel, Missouri House Communications)

The Attorney General’s Office estimates a ruling favoring tobacco companies will cost Missouri $70-million out of the Fiscal Year 2014 tobacco settlement payment. (photo courtesy; Tim Bommel, Missouri House Communications)

State Budget Director Linda Luebbering says the Attorney General’s Office estimates Missouri will only get $60-million of the $130-million tobacco settlement payment coming in April.  That is the result of a 3-judge panel’s ruling that Missouri did not diligently enforce tobacco laws in 2003.

She says the $35-million that comes out of those payments for early childhood programs will be safe, but some mandatory payments to Medicaid might have to come from General Revenue.

“We’ll have to look at the General Revenue fund and make sure it can support those payments along with everything else.”

That $70-million dollar hit will be all Missouri loses as a result of this ruling, but Luebbering says more decisions could be coming.

“2004, ’05, ’06, ’07, ’08, on up … each of those will be a new decision, so we do not know if we will lose more in the future or not.”

Luebbering says the Attorney General’s Office has told her there should not be another decision in time for Missouri to lose money in the Fiscal Year 2015 budget.

She expects how that hit will be absorbed will be decided when a supplemental budget is prepared in December.

“We do an updated revenue estimate for the current fiscal year at the same time that we’re doing the consensus revenue forecast for next year.”

She says budget planners must also consider other factors, such as legislation that did or didn’t pass. Nearly $52-million was assumed to come from tax amnesty language and about $60-million for comprehensive tax credit reform. Neither of those issues passed so that revenue will not be realized. Luebbering says the administration also believes a bill that did pass, offering a new way to corporations to claim taxes, will have a negative impact on revenue at least in the short-term. One estimate placed that impact at $29-million.

Luebbering says the news that only $70-million of the tobacco money is being cut is not likely to trigger an immediate action.

“For the most part I would expect significant actions to all happen around the time of the Fiscal Year 2015 budget rollout in January, but again I do look at the budget regularly with the Governor and he could choose between now and then to do additional actions.”