TSET again on Oklahoma lawmakers' radar
As has happened regularly in recent years, the state’s Tobacco Settlement Endowment Trust has the attention of lawmakers who want to change how TSET operates.
TSET was created by voters in 2000, following an agreement that Oklahoma and 45 other states reached with tobacco companies. The state’s annual payments are held in the trust, whose principal stands at roughly $1.3 billion. Voters' creation of the trust was wise — most other states deposit their annual checks into their general funds for use in any number of ways.
In Oklahoma, only interest earnings may be appropriated. Those earnings pay for a range of health, education and tobacco prevention programs.
The annual tobacco payment varies, but generally is in the range of $70 million-$75 million. Per the constitutional amendment, 75% goes to TSET, 18.75% to the Legislature and 6.25% to the attorney general’s office.
Some lawmakers and others have criticized TSET for straying from its original purpose of reducing tobacco use. Officials with TSET counter that improving Oklahomans’ health is central to the organization’s work, whether that’s through tobacco cessation programs, anti-obesity campaigns, or funding grants for things such as medical loan repayment programs that help attract physicians to rural communities.
In his State of the State speech this year, Gov. Kevin Stitt mentioned TSET and called for a reform in which TSET's corpus is left alone but future funds are steered toward improving delivery of health care in rural parts of Oklahoma.
Last week, the Senate Rules Committee approved two bills that seek to alter how TSET is funded.
Senate Joint Resolution 27 would reduce to 25% the amount of annual settlement funds given to TSET. The Legislature would get the remainder and use it to draw down federal matching funds for the state’s Medicaid program. The bill’s author, Sen. Kim David, R-Porter, said every state that has expanded Medicaid has underestimated the cost.
Another bill, SJR 28 by Sen. Greg McCortney, R-Ada, would let TSET spend its annual payment immediately instead of placing it in the trust and investing it.
“It would allow them to do what they have always done, but there is about another $50 million a year that they would be able to use now …” McCortney said.
Both joint resolutions were sent to the Senate Appropriations Committee after winning approval.
One person who will fight any adverse changes to the endowment trust is Drew Edmondson, who was attorney general when the agreement was reached and who helped craft the plan that voters approved overwhelmingly 20 years ago. “They did not want the Legislature controlling this money and they wanted it spent on public health,” Edmondson told the Tulsa World.
If any of these legislative efforts succeed, voters ultimately would decide whether they’re happy with TSET or prefer something different. It’s an issue to watch, once again.