Carl's Capitol Comments
October 14, 2020
State Question 814 will be on the Nov. 3 statewide ballot. If approved, it would result in an increase in money the Legislature receives annually from the Tobacco Settlement Endowment Trust, or TSET. The additional money could then be spent to help cover the state’s share of Medicaid expansion, which was approved by state voters through a separate state question in June. That expansion is set to take effect July 1, 2021. The projected cost to the state for Medicaid expansion is between $162 and $211 million. Thus, there will be a large demand on the budget to fulfill the state’s portion of Medicaid Expansion.
TSET was created in 2000 by a state question after Oklahoma reached a settlement agreement with tobacco companies after courts ruled the companies engaged in practices that knowingly harmed the public’s health. The trust is used primarily for tobacco prevention, one of Oklahoma’s leading causes of death.
Every year, TSET receives approximately $70 million to $75 million from tobacco companies, and 75% of that goes into the trust. The remainder is apportioned to the Legislature and the state attorney general’s office, which is responsible for ongoing enforcement and compliance of the Master Settlement Agreement.
State Question 814 would flip the funding formula to give the Legislature 75% of the money paid by tobacco companies, and TSET would keep the remaining 25% beginning in July 2021.
The TSET funding formula is part of the Oklahoma Constitution and can only be amended through a state question approved by voters statewide.
Proponents of this question believe the trust does not need as much cash each year because its principal stands at about $1.3 billion, which will continue to cover the cost of the programs provided by TSET.
Supporters also say that all Oklahomans can benefit because the remaining funds would be used to help cover the cost of Medicaid expansion. Helping fund Medicaid expansion through this process helps preserve funding for other state agencies that provide vital services for Oklahomans.
If State Question 814 passes, TSET will continue to operate and provide valuable resources for Oklahomans struggling with tobacco use. The 75% of funds would provide more funding for Medicaid expansion.
If the question does not pass, the Legislature will have to find other funding sources to fund Medicaid expansion.
As always, if I can help you with anything, please do not hesitate to contact me. You may reach me by email at [email protected], or phone me at 405-557-7339. May God Bless you and the State of Oklahoma.
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