JBC approves staff distributions for MSA, Proposition EE and Amendment 35 revenues; Shen warns of MSA decline

JBC budget staff briefed the committee on three tobacco-related revenue streams and recommended distributions aligned with statute and the latest Legislative Council forecasts. Kelly Shen, JBC staff, said the Master Settlement Agreement (MSA) receipts have declined in recent years, recommending no major redistribution now but closer monitoring of forecasts.

Shen detailed the three revenue sources: MSA (legal settlement receipts), Amendment 35 (voter‑approved tobacco tax from 2004), and Proposition EE (a newer tax on nicotine and tobacco products that is the largest revenue stream, roughly $250 million in current projections). She said most Proposition EE revenue is directed to the Department of Early Childhood to support universal preschool ("about $200,000,000" in staff materials).

The committee adopted staff distributions by voice votes: MSA distribution (motion passed 6–0), Proposition EE distribution (motion passed 6–0), and Amendment 35 distribution with permission to align appropriations to updated forecasts (motion passed 6–0). Shen noted MSA receipts have trended downward since 2023 and suggested the committee watch the accelerated‑payment schedule carefully; she recommended continuing a request for information that asks MSA program recipients to report outcomes and spending of MSA funds.

Members asked for additional forecasting detail; staff said they would align appropriation recommendations with the Legislative Council or OSPB forecasts used for balancing and provide follow‑up information as needed.