Oklahoma’s Tobacco Settlement Endowment Trust is a tiny state agency with a lot of money and a lot of independence — and a lot of people in state government don’t like that.
Established to reduce tobacco use and improve Oklahomans’ general health, TSET points to dramatically lower smoking rates and smaller improvements in other areas as proof of its success.
Detractors note the state’s adult smoking rate, while lower, remains among the highest in the nation. They say TSET cannot prove anything it does has noticeably improved public health statistics.
TSET Executive Director Julie Bisbee told the Tulsa World that determining how many people aren’t smoking that would have been without her agency’s programs is difficult.
“Prevention is cost avoidance, and that’s an abstract concept, especially for folks who are doing an annual budget,” Bisbee said. “Every prevention program faces the same limitation.”
Since its creation by a vote of the people in 2000, various lawmakers, administrations, policymakers and think tanks have been trying to crack into TSET’s now-$1.6 billion (and growing) endowment. Just last year, legislators tried to get voters to redirect some TSET funds to Medicaid.
The voters said no.
Last month, the Legislative Office of Fiscal Transparency, which answers to the House speaker and the Senate president pro tem, issued a stinging report in which it said TSET spends too much with too little result — and suggested TSET “reorganize ... within an existing state agency.”
An existing agency, the report says, such as the Oklahoma State Department of Health that, unlike TSET, the Legislature and the governor control.
TSET says that would violate the state constitutional amendment voters passed in 2000.
LOFT says it wouldn’t.
The plain language of the amendment is a little ambiguous. The clear purpose of TSET was to keep the money from a 1998 settlement with tobacco companies out of the Legislature’s reach. But the amendment does allow legislation to implement its provisions.
Such territorial pushing and shoving aside, the LOFT report raises some questions many think worth asking — that have, in fact, been asked before.
The basic one is whether TSET’s roughly $50-million-a-year budget is well-spent.
The 2000 constitutional amendment stipulates that at least 75% of the state’s annual payment from the 1998 settlement with four large tobacco companies go into the TSET endowment.
Of the remainder, three-fourths goes into the state general fund and one-fourth goes to the state Attorney General’s Office, ostensibly for enforcement of tobacco laws although LOFT says most of it actually goes to other purposes.
The portion going into the general fund typically is appropriated to the Oklahoma Health Care Authority, which administers the state’s Medicaid program.
In fiscal year 2020, that broke down to just under $50 million to the TSET endowment, $12.4 million to the general fund and $4.1 million to the attorney general.
TSET, however, is funded by proceeds from the endowment, not the annual payments to it. The payments peaked at $113.4 million in 2013 and have been steadily declining since.
The endowment is managed by a five-member investment committee headed by the state treasurer, and at last count was worth more than $1.6 billion. That $1.6 billion cannot be touched without a vote of the people.
The purposes for which TSET can spend money are limited by the 2000 constitutional amendment and state law, but broadly speaking the expenditures must be related to public health, research and reducing tobacco use.
TSET’s largest and most visible programs are its Helpline, which provides information, counseling and nicotine replacement therapy for smokers, and media campaigns such as Tobacco Stops With Me.
As others have before, LOFT questioned the effectiveness of these programs, and in particular the Helpline. LOFT conceded the program is relatively effective but said it costs several times more than other states spend.
Bisbee said she is not certain how LOFT reached that conclusion, but says Oklahoma’s Helpline provides more services and reaches a higher percentage of smokers than most other states.
That said, she acknowledged fewer callers to the line have signed up for assistance recently, and said the program is being reassessed.
One of the more interesting points of contention is legislation.
TSET points out the states with the lowest adult smoking rates have more restrictive smoking laws than Oklahoma, including local governments’ ability to enact ordinances more restrictive than state law.
LOFT, in its report, said such legislation has minimal effect on smoking.
Bisbee said she and TSET do not completely disagree with the LOFT report. In particular, TSET supports a recommendation to treat vapor products as other tobacco products.
Somewhat ironically, however, the Legislature this year specifically defined nicotine vaping products as non-tobacco and exempted them from tobacco taxes.
TSET and the LOFT report also agree on at least one other thing — although they seem to draw somewhat different conclusions from it.
Oklahoma ranks high for the amount spent on smoking cessation and prevention — and still spends barely half the amount recommended by the Centers for Disease Control.