Permanent State Trust Fund
The Permanent State Trust Fund is a constitutionally created trust fund used to account for the State’s portion of the proceeds from the Master Settlement Agreement (MSA) entered into by the State in November 1998 with leading tobacco manufacturers, and severance tax revenue in excess of statutory base amounts. A portion of the annual MSA proceeds are deposited into the Permanent State Trust Fund and invested by the Treasurer to provide for long-term growth of the settlement fund.
The percentage of MSA proceeds deposited annually is set statutorily and was initially set at 50%, reduced to 20% in fiscal year 2004, 0% in fiscal year 2005, resumed at 25% for fiscal years 2006 and has been 40% since fiscal year 2008.
Starting July 2011, all future MSA proceeds will be deposited into the general fund.
Annual tobacco settlement fund deposits into the Permanent State Trust Fund are shown below:
The legislature may appropriate money from the Permanent State Trust Fund with a three-fourths vote of both houses and concurrence of the Governor. In fiscal year 2003, $44.4 million was appropriated by the legislature to balance the budget. In fiscal year 2005, 30% of the annual MSA proceeds were deposited into the General Fund Budget Reserve Account, instead of the Permanent State Trust Fund.