Tuesday, December 11, 2018

OCPA column: A new direction for TSET

 A new direction for TSET
by Jonathan Small, president of the Oklahoma Council of Public Affairs

If you haven’t heard, Oklahoma’s Tobacco Settlement Endowment Trust (TSET) is searching for a new director. But what this small state agency with a giant bank account really needs is a new direction.

While TSET does some important work, like funding cancer research, it also does silly things, like spending $700,000 advertising “water recipes” in the middle of a state budget crunch. The agency has also spent $1.1 million promoting bars and nightclubs that prohibit indoor smoking.

Unfortunately, many of the non-outrageous things that TSET spends money on are low priorities. The agency replaced working drinking fountains in schools with fancier (and much more expensive) drinking fountains.

TSET was set up as an endowment that will grow with no limit. It collects payments owed to Oklahoma from the 1990s tobacco lawsuit, puts those payments in the bank, and spends the earnings.

That account has grown to $1.2 billion, with TSET expecting to earn $64.8 million from those investments during fiscal year 2018. Over the last five years, TSET’s earnings have averaged $50 million per year.

The good news is that TSET sometimes makes really good decisions. Last year, TSET’s board of directors approved $3 million in one-time funds for senior nutrition services and mental health crisis teams.

The Legislature should reform TSET so that it can continue doing important work while redirecting future settlement payments to critical state health care needs.

One good target would be rural medical care, which is more expensive to provide than medical care in urban and suburban areas. The funds could help cover the actual losses of medical facilities in rural Oklahoma, keeping hospitals open.

Revenues could also go to the Physician Manpower Training Commission, also focused on medical care in rural Oklahoma, and to shore up nursing home provider rates.

These are core services that citizens rely on. Does anyone think “water recipe” billboards or ads for smoke-free booze is more important?

And frankly, reforming TSET this way would leave the agency with exactly as much money as it has right now. What we’re really talking about is letting TSET continue with its current projects, while assuring Oklahomans are taken care of by using future settlement payments.

Excess tobacco settlement payments have approached $60 million per year for the last few years while core services continue to suffer. TSET’s spending is just one example of a government entity making highly questionable spending decisions at a time when we need to prioritize core services. Imagine how far $60 million could go to help rural health care.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.


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