Legislature pushes changes to TSET

Posted on: 5/15/20

After years of unsuccessful attempts to tamper with the Tobacco Settlement Endowment Trust (TSET) Fund, the state Legislature is quickly moving to dramatically alter the funding of TSET. SJR 27 proposes to cap the amount of the Master Settlement Agreement payments that are deposited into the trust fund. Currently, 75% of MSA payments are deposited into the fund, with 25% going to a special fund established by the Legislature solely for MSA payments. Current law also authorizes the Legislature to provide a share of its portion to the state attorney general’s office.

SJR 27 flips this arrangement with 75% going to the Legislature’s special fund and 25% being deposited into the TSET fund. It provides that the money deposited into the special fund must be used to draw down federal matching funds for the state’s Medicaid program. This change does require a vote of the people, so if SJR 27 receives the governor’s signature, it will be a state question on an upcoming ballot to be determined. A companion bill, meaning that it depends on successful passage of SJR 27 at the ballot box, details how the Legislature’s share of the MSA payments will be divided up.

SB 1529 earmarks 91.67% of the Legislature’s share to be apportioned to the special fund, and it maintains the funding the AG’s office currently receives, directing 8.33% deposited into the AG’s Evidence Fund. Within this conversation, it is important to remember that TSET is able to expend its earnings year over year on the vital programs it provides to the state, not its corpus. Given the tumultuous days we have seen on Wall Street these past weeks, expect those earnings to have suffered greatly. (Scott Tohlen)