Oklahoma treasurers: This policy decision is working as intended
By Scott Meacham, Robert Butkin and Ken Miller
Copyright © 2016, The Oklahoma Publishing Company
As word of the national tobacco Master Settlement Agreement came down to states in 1998, many states hoped for a windfall — a pot of money that could immediately be put into state coffers to pay for pressing and immediate needs. Oklahoma voters endorsed a different idea and, today, the Tobacco Settlement Endowment Trust (TSET) continues to be an example of a wise choice to make provision for long-term funding to combat health problems that cost our state money and take lives.
In anticipation of the ongoing payments from the tobacco industry, bipartisan leaders in Oklahoma envisioned a plan for voters to consider that would divide the money between the Legislature and a constitutionally protected endowment that would be invested with earnings used to improve the health and well-being of Oklahomans.
Under the plan approved by voters in 2000, three-quarters of each payment is invested in an endowment under the management of an appointed board of investors, chaired by the state treasurer. Proceeds from the investments are put to use by the board for grants and programs, fulfilling the promise to “Save it, Grow it, and Spend it on Health.” The remaining 25 percent is divided between a fund primarily used by the Legislature to help with the state’s Medicaid budget and the attorney general’s evidence fund.
More than 15 years later, Oklahoma stands out among other states for its foresight to provide permanent funding for health. The endowment strategy is working. Investment earnings certified since inception are close to $290 million, and the endowment has $1.02 billion working to generate annual earnings of more than $40 million.
There has always been temptation to bust open the piggy bank to address short-term needs and fill budget holes. As the endowment’s balance grows, so, too, will the temptation. An endowment only works when it is left alone to perform as intended, so restraint shown by leaders in both parties is to be applauded.
TSET is leveraging partnerships and enriching our state with research efforts that bring innovation and jobs to Oklahoma, softening the blow of the state’s energy sector slump.
TSET partners with communities, schools and local organizations to create healthy, vibrant communities that become destinations, not just a place for those who grew up there. TSET has also picked up programs the Legislature has approved, but not funded, including two initiatives to train, recruit and retain doctors in rural areas of our state.
Oklahoma’s smoking population is decreasing, and the number of those who have never smoked is increasing. By all early indications, this was a policy decision, backed by voters, that is doing exactly what it advertised it would do — “Save it, Grow it, Spend it on Health.”
Miller is Oklahoma state treasurer. Meacham and Butkin are former state treasurers.