It wouldn’t take long for education to use up tobacco trust (Capitol Updates)

tsetSteve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol. You can sign up on his website to receive the Capitol Updates newsletter by email.

The first couple of legislative rounds have been fired across the bow toward Oklahoma’s budget woes that show every sign of continuing into next year’s session. Sen. Bryce Marlatt, R-Woodward, has proposed a constitutional amendment to allow funds from the Tobacco Settlement Trust Fund to be used for an across-the-board teacher pay raise. Although he didn’t specify in his press release, he apparently intends the money to come from the corpus of the trust which is now over $1 billion.

Senator Brian Crain, R-Tulsa, has proposed giving the legislature authority to use earnings from the fund for doctor training, recruitment and retention. According to the tobacco settlement negotiated by state attorneys general in 1998 the tobacco companies are required to pay money to each state so long as tobacco is sold in the state. After considerable debate Oklahoma, in a vote submitted to the people by the legislature in 2000, created a constitutional trust fund in which to deposit 75% of the tobacco settlement money. Earnings last year were about $52 million.

The constitution provides that earnings only from the trust may be spent by the board of directors of the trust on:

  1. Clinical and basic research and treatment efforts in Oklahoma for the purpose of enhancing efforts to prevent and combat cancer and other tobacco-related diseases;
  2. Cost-effective tobacco prevention and cessation programs;
  3. Programs designed to maintain or improve the health of Oklahomans or to enhance the provision of health care services to Oklahomans, with particular emphasis on such programs for children;
  4. Programs and services for the benefit of the children of Oklahoma, with particular emphasis on common and higher education, before- and after-school and pre-school programs, substance abuse prevention and treatment programs and other programs and services designed to improve the health and quality of life of children;
  5. Programs designed to enhance the health and well-being of senior adults; and
  6. Authorized administrative expenses of the Office of the State Treasurer and the Board of Directors.

The board of directors must be bipartisan, appointed by the Governor, Attorney General, State Treasurer, Superintendent of Public Instruction, Auditor and Inspector, Speaker of the House and President Pro Tempore of the Senate. While several states also set up trusts to manage and allocate the settlement funds, Oklahoma was the only one to make the trust constitutional, taking it out of the hands of the legislature.

The long term nature of the tobacco problem is evident in that 23 percent of adults in Oklahoma still smoke as opposed to 28 percent in 2001. Tobacco use is down but not out. The board uses the funds for cancer research, obesity and other health issues faced by the state, including educational programs and recruiting rural doctors.

As you can see the board has the current authority to use the funding for education if it decided to do so, but it wouldn’t take long for education to swallow all the earnings if not the entire trust. Board members have decided to focus the funds on specific long-term efforts that probably wouldn’t happen in Oklahoma without the trust money. The wisdom of the people in creating the constitutional trust seems obvious. Given the ups and downs of Oklahoma’s economy, without constitutional protection the trust money would likely have been absorbed into the general budget long ago.


Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1990. He currently practices law in Tulsa and represents clients at the Capitol.

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