The Senate Appropriations Committee amended and approved Senate Bill 54 to change how cigarette and other tobacco tax revenue is distributed, reducing the dedicated tobacco-prevention allocation from $5 million to $2 million and making an additional $3 million available to the general fund.

Jim Toeliger of the Bureau of Finance and Management, who introduced the amendment, said the state faces large mandatory budget increases, particularly for Medicaid, and that tobacco use has declined substantially over the last decade. He told the committee that young-adult tobacco use fell from 32 percent in 2014 to 7.8 percent in 2024 and that high-school tobacco use fell from 17 percent in 2014 to 4.6 percent in 2024. Toeliger said the amendment would still leave approximately $3 million available for tobacco prevention when combined with federal grant funding to the Department of Health.

Opponents warned the cut could jeopardize progress. Jennifer Stalley (testifying for the American Cancer Society Cancer Action Network) recounted the program's origins and said the 2006 voter-approved tobacco tax included a dedicated $5 million for tobacco prevention; she argued that reduced funding risks reversing gains, particularly as new nicotine products such as e-cigarettes and pouches have emerged. Stalley said that while adult cigarette smoking decreased, the state still spends more in Medicaid costs related to smoking than it collects in tobacco tax revenue.

Department of Health staff and other witnesses provided data on youth vaping and tobacco trends. Beth Dacken of the Department of Health reported vaping rates among middle-school students fell from 6.7 percent in 2019 to 3.4 percent in 2023 and that high-school vaping fell from 23.9 percent in 2019 to 14.7 percent in 2023.

Committee members debated prevention versus short-term budget needs. BFM's Toeliger said some Tobacco Prevention Fund dollars were previously used for mosquito-control grants and urged more targeted use of funds. The committee adopted the amendment and then approved the bill as amended; the roll call produced a committee vote of 5 aye, 3 nay, 1 excused and sent SB 54 to the Senate floor as amended.

Why it matters: The change reduces the statutory dedication to tobacco prevention and directs more revenue to the general fund in a year with substantial Medicaid and other mandatory cost increases. Supporters framed the change as "spending smarter" given declines in cigarette use; opponents urged preserving voter-directed prevention funding to guard against emerging nicotine products.

What comes next: SB 54 (as amended) advances to the full Senate for further consideration.