Louisiana TOPS Scholarship Program, Amendment 1 (October 2011)

Amendment 1
Typ	Constitutional amendment
Origin	Louisiana State Legislature
Topic	State budgets
Status	Approveda

The Louisiana TOPS Scholarship Program, Amendment 1 was on the October 22, 2011 statewide ballot in Louisiana as a legislatively referred constitutional amendment where it was approved a.

The proposed measure called for directing Tobacco Settlement Proceeds to the TOPS (Taylor Opportunity Program for Students) scholarship program once the balance in the Millennium Trust reached $1.38 billion.

Election results

Amendment 1 (October 2011)
Result		Votes	Prozentualer Anteil
a Yes		672429	69.60%
No		293759	30.40%

Source: Louisiana Secretary of State, official results 10/22/11

Text of measure

The ballot question read:

To dedicate funds for the TOPS programrelative to the portion of the monies deposited in and credited to the Millennium Trust each year from the Tobacco Master Settlement, to provide that once the balance in the Millennium Trust reaches a total of one billion three hundred eighty million dollars, one hundred percent of the annual Settlement Proceeds shall be allocated to the TOPS Fund to support state programs of financial assistance for students attending Louisiana postsecondary education institutions; to provide relative to the rate of tax on certain tobacco products and beginning July 1, 2012, to dedicate such tobacco revenues to the Health Excellence Fund to be used for the purposes of the fund, including providing for the optimal development of Louisiana's children through the provision of appropriate health care and providing health care initiatives through innovation in advanced health care sciences; to provide for the deposit, transfer, or credit of certain monies in the Millennium Trust to the Health Excellence Fund, the Education Excellence Fund, and the TOPS Fund.

Constitutional changes

Amendment 1 amended Article VII, Section 10.8(A)(1)(c), (A)(2), (3), and (4), and (C)(1)4 and adds Article VII, Section 4.1.

Note: Use your mouse to scroll over the below text to see the full text.

§4.1. Cigarette Tax Rates Section 4.1. To ensure revenue for the dedication provided for in Article VII, Section 10.8(C)(2)(c) of this constitution, the rate of the tax levied pursuant to R.S. 47:841(B)(3) shall not be less than the rate set forth in that provision as it exists on January 1, 2012. §10.8. Millennium Trust Section 10.8. Millennium Trust. (A) Creation. (1) There shall be established in the state treasury as a special permanent trust the "Millennium Trust." After allocation of money to the Bond Security and Redemption Fund as provided in Article VII, Section 9(B) of this constitution, the treasurer shall deposit in and credit to the Millennium Trust certain monies received as a result of the Master Settlement Agreement, hereinafter the "Settlement Agreement," executed November 23, 1998, and approved by Consent Decree and Final Judgment entered in the case "Richard P. Ieyoub, Attorney General, ex rel. State of Louisiana v. Philip Morris, Incorporated, et al.," bearing Number 98-6473 on the docket of the Fourteenth Judicial District for the parish of Calcasieu, state of Louisiana; and all dividend and interest income and all realized capital gains on investment of the monies in the Millennium Trust. The treasurer shall deposit in and credit to the Millennium Trust the following amounts of monies received as a result of the Settlement Agreement: * * * (c) Fiscal Year 2002-2003 and each fiscal year thereafter, seventy-five 25 percent of the total monies received that year. However, beginning in Fiscal Year 2011-2012 after the balance in the Millennium Trust reaches a total of one billion three hundred eighty million dollars, the monies deposited in and credited to the Millennium Trust, received as a result of the Settlement Agreement, shall be allocated to the various funds within the Millennium Trust as provided in Subsubparagraphs (2)(b), (3)(b), and (4)(b) and (c) of this Paragraph. * * * (2)(a) The Health Excellence Fund shall be established as a special fund within the Millennium Trust.The treasurer shall credit to the Health Excellence Fund one-third of the Settlement Agreement proceeds deposited each year into the Millennium Trust, and one-third of all investment earnings on the investment of the Millennium Trust. The treasurer shall report annually to the legislature as to the amount of Millennium Trust investment earnings credited to the Health Excellence Fund. (b) Beginning Fiscal Year 2011-2012, and each fiscal year thereafter, the treasurer shall credit to the Health Excellence Fund one-third of all investment earnings on the investment of the Millennium Trust. The treasurer shall report annually to the legislature as to the amount of Millennium Trust investment earnings credited to the Health Excellence Fund. (c) Beginning on July 1, 2012, after allocation of money to the Bond Security and Redemption Fund as provided in Article VII, Section 9(B) of this constitution, the state treasurer shall deposit in and credit to the Health Excellence Fund an amount equal to the revenues derived from the tax levied pursuant to R.S. 47:841(B)(3). (3)(a) The Education Excellence Fund shall be established as a special fund within the Millennium Trust. The treasurer shall credit to the Education Excellence Fund one-third of the Settlement Agreement proceeds deposited each year into the Millennium Trust, and one-third of all investment earnings on the investment of the Millennium Trust. The treasurer shall report annually to the legislature and the state superintendent of education as to the amount of Millennium Trust investment earnings credited to the Education Excellence Fund. (b) Beginning Fiscal Year 2011-2012, and each fiscal year thereafter, the treasurer shall credit to the Education Excellence Fund one-third of all investment earnings on the investment of the Millennium Trust. The treasurer shall report annually to the legislature and the state superintendent of education as to the amount of Millennium Trust investment earnings credited to the Education Excellence Fund. (4)(a) The TOPS Fund shall be established as a special fund within the Millennium Trust. The treasurer shall deposit in and credit to the TOPS Fund one-third of the Settlement Agreement proceeds deposited into the Millennium Trust, and one-third of all investment earnings on the investment of the Millennium Trust. The treasurer shall report annually to the legislature as to the amount of Millennium Trust investment earnings credited to the TOPS Fund. (b) Beginning Fiscal Year 2011-2012, and each fiscal year thereafter, the treasurer shall credit to the TOPS Fund one hundred percent of the Settlement Agreement proceeds deposited into the Millennium Trust, and one-third of all investment earnings on the investment of the Millennium Trust. The treasurer shall report annually to the legislature as to the amount of Millennium Trust Settlement Agreement proceeds and investment earnings credited to the TOPS Fund. (c) Upon the effective date of this Subsubparagraph, the state treasurer shall deposit, transfer, or otherwise credit funds in an amount equal to such Settlement Agreement proceeds deposited in and credited to the Millennium Trust received by the state between April 1, 2011 and the effective date of this Subsubparagraph to the TOPS Fund. (C) Appropriations. (1)(a) Appropriations from the Health Excellence Fund, Education Excellence Fund,and TOPS Fund shall be limited to an annual amount not to exceed the estimated aggregate annual earnings from interest, dividends, and realized capital gains on investment of the trust allocated as provided by Paragraph (A) of this Section and as recognized by the Revenue Estimating Conference. Amounts determined to be available for appropriation shall be those aggregate investment earnings which are in excess of an inflation factor as determined by the Revenue Estimating Conference. The amount of realized capital gains on investment which may be included in the aggregate earnings available for appropriation in any year shall not exceed the aggregate of earnings from interest and dividends for that year. (b)(i) For Fiscal Year 2011-2012, appropriations from the Health Excellence Fund shall be limited to an annual amount not to exceed the estimated aggregate annual earnings from interest, dividends, and realized capital gains on investment of the trust and credited to the Health Excellence Fund as provided by Subsubparagraph (A)(2)(b) of this Section and as recognized by the Revenue Estimating Conference. (ii) For Fiscal Year 2012-2013, and each fiscal year thereafter, appropriations from the Health Excellence Fund shall be limited to an annual amount not to exceed the estimated aggregate annual earnings from interest, dividends, and realized capital gains on investment of the trust and credited to the Health Excellence Fund as provided by Subsubparagraph (A)(2)(b) of this Section and as recognized by the Revenue Estimating Conference and the amount of proceeds credited to and deposited into the Health Excellence Fund as provided by Subsubparagraph (A)(2)(c) of this Section. (c)(i) For Fiscal Year 2011-2012, appropriations from the TOPS Fund shall be limited to the amount of Settlement Agreement proceeds credited to and deposited into the TOPS Fund as provided by Subsubparagraphs (A)(4)(b) and (c) of this Section, and an annual amount not to exceed the estimated aggregate annual earnings from interest, dividends, and realized capital gains on investment of the trust and credited to the TOPS Fund as provided by Subsubparagraph (A)(4)(b) of this Section and as recognized by the Revenue Estimating Conference. (ii) For Fiscal Year 2012-2013, and each fiscal year thereafter, appropriations from the TOPS Fund shall be limited to the amount of annual Settlement Agreement proceeds credited to and deposited into the TOPS Fund as provided in Subsubparagraph (A)(4)(b) of this Section, and an annual amount not to exceed the estimated aggregate annual earnings from interest, dividends, and realized capital gains on investment of the trust and credited to the TOPS Fund as provided in Subsubparagraph (A)(4)(b) of this Section and as recognized by the Revenue Estimating Conference. (iii) Further, for Fiscal Year 2011-2012, and each fiscal year thereafter, amounts determined to be available for appropriation from the TOPS Fund from interest earnings shall be those aggregate investment earnings which are in excess of an inflation factor as determined by the Revenue Estimating Conference. The amount of realized capital gains on investment which may be included in the aggregate earnings available for appropriation in any year shall not exceed the aggregate of earnings from interest and dividends for that year. * * *

Background

The Millennium Trust Fund

Louisiana's Millennium Trust Fund was created in 1999 by Legislative Act 1295. The legislative act also created three special funds within the trust fund: the Health Excellence Fund, the Education Excellence Fund and the TOPS fund. The funding for the Millennium Trust Fund comes from a tobacco settlement proceeds. The order was issued by the "Master Settlement Agreement" on November 23, 1998. According to the state the trust exceeds $1.2 billion.

TOPS

TOPS is a state scholarship program for Louisiana state residents. Applicants must attend either one of the state's public colleges or universities, schools that are part of the Louisiana Community and Technical College System or other institutions that are members of the Louisiana Association of Independent Colleges and Universities.

The program offers four awards: TOPS Opportunity Award, TOPS Performance Award, TOPS Honors Award and TOPS Tech Award. Read about each award here.

Support

Supporters argued that the amendment was imperative to securing funding for the TOPS program.

Louisiana Gov. Bobby Jindal said, "We have met with the Taylor Foundation over the last few weeks to discuss how we can continue to protect the program even during times of budget reductions. This amendment will be very important to protecting the future of the TOPS program because it constitutionally protects more TOPS dollars. Currently, about $15 million is protected through the TOPS Fund –and under this constitutional amendment – that will increase to about $58 million."

Phyllis Taylor, chairman and president of the Patrick F. Taylor Foundation, said, "I am very pleased to support Governor’s Jindal’s efforts to secure the permanent funding for this vital program."

The Council for A Better Louisiana announced their support for the proposed amendment in early May 2011. "We believe this constitutional amendment will strengthen funding for TOPS, provide a cushion to the state general fund as adjustments in tuition are made through the performance requirements of the LA GRAD Act, and help mitigate further cuts that might otherwise come to higher education or other areas of the budget," said the council.

Note: As of September 2011 there was no organized support or campaign effort.

Donors

According to the state campaign finance database, there were no registered committees (PACs).

(last updated December 2011)

Opposition

Opponents argued that the amendment would stall earnings for the Millennium Trust and would dedicated funds to TOPS at the expense of other funds like the Education Excellence Fund. Additionally, opponents argued that it was unnecessary to add the cigarette tax to the state constitution.

Note: As of September 2011 there was no organized opposition or campaign effort.

State budgets on the ballot in 2011

Donors

According to the state campaign finance database, there were no registered committees (PACs).

(last updated December 2011)

Media editorial positions

See also: Endorsements of Louisiana ballot measures, 2011

Support

• Houma Today said, "A small part of the amendment would keep alive a 4-cent-per-pack sales tax on cigarettes. The Legislature passed a renewal of that tax, which generates about $12 million a year, but Gov. Jindal vetoed it, claiming it would amount to a new tax. This amendment would renew that tax, dedicate money to TOPS and open up a new stream of revenue to the program. It deserves the voters' support."

Opposition

• The News-Star said, "The TOPS program is established in statute, and it is up to the Legislature to fund it each year. The governor opposed renewing the cigarette tax, calling it a tax increase. Funding for TOPS should be made available by the Legislature as money is available, and the Legislature should renew the cigarette tax statutorily and override a gubernatorial veto to maintain it."
• The Times-Picayune said, "If costs are a problem, and they seem to be, the state should look at ways to streamline the program. Even with this amendment, TOPS would have to rely on General Fund allocations to meet its current obligations. Finally, the cigarette tax, which is currently set by statute, should not be enshrined in the Constitution."
• The Daily Iberian said, "Amendment No. 1 adds a tax on tobacco products and steers the revenue to the TOPS college scholarship program. The tax goes away if not included here, though it's already in place so is not a "new" tax. Gov. Jindal has reportedly said he's voting "no" to this. It's a questionable effort, but who is against TOPS? And the tax is really a renewal."

Path to the ballot

See also: Louisiana legislatively referred constitutional amendments

If 2/3rds of the members of both houses of the Louisiana State Legislature voted in the affirmative, a legislatively referred constitutional amendment could be placed on the statewide ballot.

The Senate voted 31-5 (3 absent) on May 17, 2011. And the House voted 93-10 (2 absent) on June 20, 2011.

The proposed measure was sent to the Louisiana Secretary of State and Governor for referral to the ballot on June 23 and June 24, 2011.

Timeline

The following is a timeline of events surrounding the measure:

Event	Date	Developments
Senate vote	May 17, 2011	Senate voted 31-5 in favor of referring the measure (3 absent)
House vote	June 20, 2011	House voted 93-10 in favor of referring the measure (2 absent)
Certified	June 23-24, 2011	Referred and certified for the 2011 ballot

See also

• 2011 ballot measures
• Louisiana 2011 ballot measures

Artikel

• Election preview: Louisiana ballot measures focus on state budget funds
• Election results: Louisiana ballot measures
• Election aftermath: 3 Louisiana measures approved, 2 defeated in primaries (updated)

External links

• SB 53 summary (dead link) and full text (dead link)
• Louisiana Trust Funds - Millennium Trust Fund
• TOPS (Taylor Opportunity Program for Students) scholarship program
• League of Women Voters of Louisiana - Voter Guide 2011 Louisiana constitutional amendments
• Public Affairs Research Council of Louisiana - Guide to the 2011 Constitutional Amendments

Additional reading

• St. Tammany News, "Amendments will benefit students, veterans," October 12, 2011
• The Times-Picayune, "Louisiana voters will weigh in 5 changes proposed for state Constitution," October 8, 2011
• The Lion's Roar, "New state amendment can impact TOPS," September 27, 2011
• DailyComet.com, "La. voters to consider six amendments," September 11, 2011
• The Times-Picayune, "Louisiana Constitution amendments on fall ballots include cigarette tax question," July 14, 2011
• Daily World, "Don't forget TOPS is in TOPS amendment," June 26, 2011
• Boston.com, "La. gov, lawmakers compromise on cigarette tax," June 23, 2011 (dead link)