Your questions about State Question 814 answered
State Question 814 is one of two questions on the statewide ballot in Oklahoma this fall.
The complexity of the measure and lack of widespread attention has some Oklahomans wondering what exactly SQ 814 is asking. Here's what you should know before you vote.
What is State Question 814?
SQ 814 is a statewide ballot measure that asks voters to amend Oklahoma’s constitution to reduce from 75% to 25% the amount of tobacco settlement funds going to the Tobacco Settlement Endowment Trust (TSET).
If approved, the Oklahoma Legislature would receive 75% of the settlement funds (instead of the current 25%) to help fund the state’s Medicaid program and the costs associated with Medicaid expansion. A small portion of TSET funds (6.25%) goes to the attorney general's office, which is slated to continue under SQ 814.
What is TSET?
After the 1998 master settlement agreement between the tobacco industry and 46 states, Oklahoma voters in 2000 approved creating an endowment trust to protect the funds.
TSET funds research and offers grants to improve Oklahomans' health and well-being with a major focus on tobacco cessation and prevention programs.
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How is TSET funded?
TSET, which has a nearly $48 million annual budget, can only spend the interest earnings off the trust that currently holds about $1.3 billion.
Under SQ 814, the Legislature will not be able to tap into the trust, often referred to as the “corpus.” If SQ 814 passes, the corpus will not grow as quickly because a smaller amount of money will go into the trust each year.
How did SQ 814 get on the ballot?
The state's GOP-controlled Legislature referred SQ 814 to the ballot in the spring through legislation from Senate Majority Floor Leader Kim David, R-Porter.
Because TSET was constitutionally created by voters, lawmakers can’t alter it without voters’ permission.
Will this cover all the costs of Medicaid expansion?
No. Estimates indicate Oklahoma’s 10% share of Medicaid expansion will cost roughly $164 million annually, and costs could increase depending on the number of people who enroll.
TSET payments, which have been on the decline as fewer cigarettes are sold each year, are based on Oklahoma’s annual master settlement payment from tobacco companies. In fiscal year 2019, the settlement payment was $69 million. Roughly $52 million went to TSET, $13 million went to the Legislature and the attorney general's office received $4 million.
If SQ 814 passes, it's likely to generate less than one-third of the state’s cost to expand Medicaid. Lawmakers will still have to find additional revenue to cover the full costs of expansion.
The Legislature is constitutionally required to fund Medicaid expansion regardless of what voters decide on SQ 814.
Could this affect TSET programs?
Supporters and opponents of the question differ on this point.
SQ 814 opponents say the measure could hurt TSET’s ability to expand existing programs or start new programs. TSET needs the flexibility to create new programs as tobacco companies come up with new products, said Matt Glanville, Oklahoma government relations director for the American Cancer Society’s Cancer Action Network.
“You’re talking about tens of millions of dollars on a yearly basis here,” he said. “So, it’s just not reasonable to suggest that this isn’t going to affect TSET’s ability to invest in their priorities and bring new programs online as new products are developed by tobacco companies.”
But supporters say that because SQ 814 doesn’t touch TSET’s corpus, which will continue to grow, the measure won’t hinder the agency's programs.
“I feel like this is a very effective and thoughtful approach to not disturb any of the programs that they’re doing with TSET,” David said during a virtual forum.
Could lawmakers use the money to pay for things other than Medicaid?
Republican lawmakers who support the question have said there’s no way the money will be used for anything but to help fund the state’s Medicaid program.
With the state likely facing a tight budget next year and the added costs of the expansion, David said the TSET funds will absolutely be used for Medicaid. Senate Bill 1529, a companion bill legislators passed in the spring, also prevents the Legislature from using the TSET funds elsewhere, David said.
“What that bill does is it ties the hands that this money goes, off the top, directly to the Health Care Authority to go to pay for Medicaid to draw down federal dollars,” she said.
Former Attorney General Drew Edmondson, who helped create TSET, said the roughly $50 million the Legislature would receive if SQ 814 passes would be a “drop in the bucket” for the state’s Medicaid costs, but the loss of those funds would have a "crippling" effect on TSET.
He also said Oklahomans’ distrust of the Legislature is what prompted them to support the creation of TSET two decades ago.
What are supporters of SQ 814 saying?
Proponents are warning Medicaid expansion could cost far more than anticipated because the pandemic has increased the number of Oklahomans eligible for Medicaid.
Without the TSET funding, legislators may have to cut other state services to fund the expansion, David said. The Legislature needs every dollar it can find in order to cover the new Medicaid population, she said.
“If we don’t have the money to fund Medicaid, we end up cutting education, we end up cutting transportation, we end up cutting public safety,” she said.
Gov. Kevin Stitt and most Republican legislators oppose raising taxes, so boosting taxes to fund the expansion is likely a nonstarter.
What are opponents of SQ 814 saying?
Opponents say SQ 814 is harmful to improving public health in Oklahoma.
The Legislature is trying to divert funding from a state agency that operates proven public health and prevention programs like the Oklahoma Tobacco Helpline to help people quit smoking and a physician recruitment program for medically underserved areas, said Glanville, of the Cancer Action Network.
Taking funding from one public health program to fund another public health program doesn’t make sense when Oklahoma ranks so poorly in so many health metrics, Glanville said.
“We don’t need to pass SQ 814 to fund Medicaid expansion,” he said. “If we’re going to truly invest in public health in Oklahoma, we need to leave those prevention dollars in place and find new money for Medicaid expansion.”