The Tobacco Settlement Permanent Fund (TSPF) was created in 2000 as part of the Master Settlement Agreement between New Mexico, other states and big tobacco companies.
During its early years, the TSPF received approximately half of the annual tobacco payments to the state, or about $20 million per year, while the other half went toward health and tobacco cessation programs. However, since 2008, legislative priorities have resulted in nearly 100-percent of annual payments being appropriated, and minimal new funds going into the TSPF for investment.
The TSPF is considered part of the state’s reserve fund, and is not constitutionally protected from legislative appropriation. The TSPF may one day grow to a large enough size that it can make substantial annual distributions while also being self-sustaining through its earnings.