Budget & Tax, Health Care

Lawmakers vow to ‘keep fighting’ for tobacco-fund reform

May 15, 2019

Ray Carter

In 2017, Rep. Scott Biggs, R-Chickasha, filed legislation to direct that future state tobacco settlement payments be deposited into a Rural Health Care Infrastructure Fund that focused on boosting health care access and treatment outside metro areas, rather than having that money go into the state’s Tobacco Settlement Endowment Trust (TSET) Fund.

Biggs’ bill passed unanimously out of a House committee, but did not proceed further.

This year, on April 19, the state received $69.7 million in tobacco-settlement funds of which $53.3 million went to TSET. Had Bigg’s bill passed the Legislature, Oklahomans could have voted on the constitutional amendment in 2018 and this year’s payment would have been the first directed to rural health needs.

Supporters of the proposal concede there’s a sense of lost opportunity in that knowledge.

“It’s kind of hard to watch hospitals close when there’s over $1 billion sitting in a trust fund,” said Sen. Lonnie Paxton, R-Tuttle.

“That $70 million would have helped a lot of rural hospitals,” said Rep. John Pfeiffer, R- Orlando.

Under current law, TSET receives annual tobacco-settlement payments and spends only the earnings generated off those deposits, which now total more than $1 billion. The fund has paid for a host of programs, but critics suggest much of the money could be better spent. Among other things, TSET has funded advertising campaigns urging people to drink water, supported a boathouse and installation of walking paths, and even advertised smoke-free bars.

Biggs is no longer a member of the House, but Pfeiffer and Paxton have taken up the cause he once championed.

House Joint Resolution 1017, by Pfeiffer and Paxton, would allow Oklahomans to vote to amend the state constitution to change the way future tobacco settlement payments are distributed. If approved by voters, the constitutional amendment would redirect 90 percent of future tobacco settlement payments from the Tobacco Settlement Endowment Trust Fund to the principal of the Community and Regional Empowerment Fund beginning July 1, 2021.

The Community and Regional Empowerment Fund would use the money to boost rural health care infrastructure and access.

HJR 1017 passed the Oklahoma House of Representatives on a 73-27 vote, but remains on hold in the Senate. Paxton said the measure should receive a Senate vote next year. He points out that the proposed constitutional amendment would not go before Oklahoma voters until 2020, whether HJR 1017 passes this year or next.

In the meantime, he said lawmakers want to examine the issue further.

“We’ll dig into it some more this summer and be ready to roll with it,” Paxton said. “It’s already passed the House, so now it’s time to get it through the Senate.”

Paxton said some minor changes may be made to the legislation, such as altering the composition of the board that will oversee the program.

“The whole concept of getting more money into rural health is still the goal,” Paxton said. “It’s just some of the logistics.”

Paxton served about 10 years on the board of the Grady Memorial Hospital in Chickasha, where Grady County voters had to approve a sales tax increase to build a new operating room and imaging center at the hospital to keep it open.

“You just can’t have any opportunity for economic development or anything else that goes along with communities like Chickasha, where the Grady County Hospital is located, without having a good health care system there,” Paxton said.

He believes increasing awareness of rural health challenges will result in legislative support for HJR 1017 next year.

“We talk about access to health care all the time up here,” Paxton said. “Access doesn’t mean just have plenty of hospitals in metro areas.”

Despite the delay, Pfeiffer is also optimistic.

“I think there’s a really good chance of getting it through the Senate next session,” Pfeiffer said.

If the measure clears all legislative hurdles, polling suggests it will easily receive majority support from Oklahoma voters. Polling conducted by WPA Intelligence and commissioned by the Oklahoma Council of Public Affairs, parent organization of the Center for Independent Journalism, shows that 78 percent of state voters support a proposal to redirect future payments from TSET to rural health care needs. The poll found an outright majority—58 percent—“strongly” support the proposal.

Nonetheless, supporters of HJR 1017 find the thought that millions could have already been pouring into rural health care this year, rather than going into TSET, sobering.

“It’s hard to look at the amount of money they have sitting in their trust talking about, basically, healthy living, while rural hospitals are closing down,” Paxton said. “Just as a citizen of the state, that’s kind of hard to justify.”

Pfeiffer noted most big ideas take several years to clear all hurdles in the Legislature before they become law.

“That money definitely could have been used in a more beneficial manner or beneficial way to the state of Oklahoma,” Pfeiffer said, “but all we can do is keep fighting and keep trying to change things.”