Budget & Tax

TSET paid more than $3 million in eight years to hospital lobbying organization

November 13, 2017

Jay Chilton

By Jay Chilton, CIJ

The Oklahoma Tobacco Settlement Endowment Trust (TSET) has given millions of dollars to fund smoking cessation and health-improvement-related charitable organizations since its creation in 2000. In 2009, the granting activities of the trust were expanded to include a grant of $60,573 to the Oklahoma Hospital Association (OHA), a private organization that lobbies elected leaders for policies beneficial to its members.

Since the first grant to OHA in 2009, the yearly amount has grown steadily every year to $723,000 in 2016, for an eight-year total of more than $3 million.

OHA employs four full-time lobbyists to promote its policy initiatives before legislators and statewide office holders.

House Bill 1035 received particular attention in the lobbying activities of OHA with the issuance of an “Action Alert” by the organization.

The alert called for passage of the bill which would increase taxes on cigarette packs and other tobacco items by $1.50, raise taxes on gasoline and diesel by six cents per gallon, and raise the tax on the sale of low-point beer. The Oklahoma Senate amended the bill on Nov. 6 to include a further tax increase of two percent for new oil and gas wells in the state.

OHA’s action alert states that if the bill is not passed a list of consequences would befall the state:

• 9% provider rate cut across the board from Soonercare
• Total elimination of outpatient mental health services
• Total elimination of residential treatment beds funded by Medicaid and Dept. of Mental Health
• Severe cuts to nursing homes and services to our most vulnerable citizens

However, Byron Schlomach, director of the 1889 Institute, said in a November 2015 fact sheet that TSET would be within their authority to fund the gap in the cost of services rather than paying the organization lobbying for tax increases at a rate of nearly $750,000 per year. TSET currently funds the Oklahoma Department of Mental Health and Substance Services at a rate of $359,000 per year for $2,116,086 over the eight-year period they have funded OHA. Rep. Mark McBride, R-Moore, indicated in a 2016 article in The Oklahoman that a change in TSET’s spending priorities could ease fears for the vulnerable citizens in Oklahoma’s nursing homes and under the care of the Department of Mental Health.

Editor’s clarification: the original released story referred to the start date of TSET as 1996. To clarify, this statement refers to the original lawsuit filed by attorney general Drew Edmondson. TSET was created in 2000 by the voters of Oklahoma.