LEGISLATURE WANTS THAT TSET MONEY!

 Weekly Opinion Editorial

END RUN OR FAKE PUNT?

by Steve Fair

 

The Oklahoma Tobacco Settlement Endowment Trust (TSET) is a public trust created in November 2000 after Oklahoma voters approved SQ#692 by a 59% margin.  TSET was created to manage monies from settlements or lawsuits against any tobacco company by the state of Oklahoma.  It specified that only 'earnings' from investments from TSET can be spent and only for tobacco prevention, cancer research, and other health related programs.  TSET was charged to use the money to improve the health for all Oklahomans.

The assets of TSET are invested at the direction of a five-member Board of Investors. That Board consists of the State Treasurer (Todd Russ), who serves as chair, and the designees of the Governor, Speaker of the House, the President Pro Tempore of the Senate, and the State Auditor.  The State Treasurer serves on the Board as long while in office and the appointed members serve four-year terms. 

The board of directors of TSET are appointed by seven statewide elected officials: the Governor, Speaker of the House, President Pro Tempore of Senate, the Attorney General, State Treasurer, State Auditor and the State School Superintendent.  All members serve seven-year terms.  All appointed members serve seven-year terms.

There has to be at least one appointee from each Congressional district, and not more than two appointees from the same district.  In addition, not more than four appointees may be from any one political party. The board is responsible for spending the earnings from the trust.  They have normally spent about $50 million annually.

This week, TSET announced an award of $150 million through 14 grants to universities, clinics, and foundations throughout Oklahoma to strength health care systems in the Sooner state.  Using accumulated, unspent earnings from previous years, TSET exceeded the investment income provision in SQ#692.  Expect TSET's action to be challenged in court.  Three observations:

First, Oklahoma did the right thing in creating TSET.  Only two other states- Alaska and North Dakota did something similar and set aside their tobacco settlement money for prevention and reduction of tobacco use.  Most states used the money to fill budget holes or to pay off debt.  Two tobacco producing states- South Carolina and North Carolina- ironically used their settlement funds to help tobacco farmers.  Oklahoma voters chose to create an independent entity that would use the money for what it was intended- health care.  Crafters of SQ#692 knew if the legislature got their hands on the tobacco money, it wouldn't be used for what it was intended.  TSET was a wise decision.

Second, the legislature has been trying to do an end run on SQ#692 for years.  They have repeatedly tried to gain more control and access to TSET's funds.  After the TSET board, denied a request for an OU Health project, lawmakers passed HB#2783, authored by Rep. Trey Caldwell, (R-Lawton), and Sen. Chuck Hall, (R-Perry) in 2025.  HB#2783 allowed the statewide elected officials to remove their appointed TSET board members at will and ignore the term provisions of SQ#692.  HB#2783 passed the House on a vote of 60-30 and the Senate 36-8.  Gov. Stitt did not sign the bill, so it became law automatically in May 2025.  This week, the Oklahoma Supreme Court, in an 8-1 vote, ruled HB#2783 unconstitutional.  They noted voters the guidelines for how the board members are appointed and the length of their term was clearly set forth in SQ#692 and in the state constitution. 

Third, TSET needs revision.  SQ#692 guidelines require a significant amount of the TSET earnings go to education.  Instead of running out of date TV ads urging kids to not smoke, TSET should be spending money in rural Oklahoma to improve health care.  But any change to how TSET is governed and earnings are used require a vote of the people, Voters would likely vote to remove many of the restrictions that were wise in 2000, but make little sense 25 years later.  But the legislature should stop trying to circumvent the will of the people.  Bypassing what voters have approved isn't revision- it's an end run.

The legislature's action may have spurred the TSET board to action and their granting of the $150 million.  If that was the case, HB#2783 wasn't an end run- it was a successful fake punt.