Budget & Tax, Health Care
As TSET endowment grows, so do questions about spending
November 8, 2018
Oklahoma’s Tobacco Settlement Endowment Trust (TSET) is expected to earn $64.8 million for fiscal year 2018. These earnings come from investments from the now $1.2 billion endowment controlled by TSET.
In accordance with the Master Settlement Agreement (MSA), TSET receives money from the tobacco industry that is placed into an endowment fund. These payments have approached $60 million per year for the last few years. None of the money coming from the settlement payments is used to fund grants and other programs. For that, TSET relies solely on the investment earnings from the fund. Over the last five years, TSET’s earnings from investments have averaged $50 million.
* 2018 preliminary investment earnings
Oklahoma’s smoking rate has dropped during TSET’s existence. But, as the endowment has grown, the scope of the trust has expanded from tobacco-related programs to some questionable areas. Free the Night, a program promoting smoke-free bars and clubs, is just one example.
TSET has shown, however, that it can provide support to higher priority needs than nightclubs. Last year, TSET approved $3 million in one-time funds to aid with senior nutrition services and mental health crisis teams. TSET should not stop there. Rural communities are another area where this kind of aid could go a long way. By supporting local hospitals as well as the Physician Manpower Training Commission, TSET could provide much-needed relief to these areas.
Voters should be allowed the chance to reform TSET by capping the current endowment level and using future MSA payments for high-priority health needs for Oklahomans. TSET would still be free to use $50 million each year from investment earnings to continue its current programs and would be able to refocus on the commendable work of reducing smoking and aiding in the treatment of tobacco-related diseases.