Oklahoma voters to decide State Question 814 to allocate a portion of tobacco settlement revenue to Medicaid funding

The Oklahoma State Legislature passed Senate Joint Resolution 27 on Friday, which will appear on the statewide ballot as State Question 814 on November 3. The constitutional amendment would decrease appropriations made to the state’s Tobacco Settlement Endowment Trust (TSET) Fund from 75% to 25% of tobacco settlement revenue. Funds that are not being deposited into the TSET fund are deposited into a special fund, which would continue under the amendment. The measure would direct the legislature to appropriate money from the special fund to secure federal matching funds for the state’s Medicaid program.

The Tobacco Settlement Endowment Trust (TSET) Fund was created through State Question 692 in 2000. The measure was referred to the ballot by the state legislature and was approved by voters in a vote of 69% in favor to 31% opposed. The TSET was funded through a percentage of revenue from tobacco companies under the 1998 Master Settlement Agreement (MSA). The money in the TSET fund was earmarked for tobacco use prevention, smoking cessation programs, education, health care, and other purposes as established by the fund’s board of directors.

The Master Settlement Agreement (MSA) of 1998 is an agreement between 46 states, four U.S. territories, Washington, D.C., and Puerto Rico, and, originally, four cigarette manufacturers (Philip Morris Incorporated, R.J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corporation, and Lorillard Tobacco Company). As of October 2018, more than 50 tobacco manufacturers were a part of the MSA. Annual payments to the states under the MSA began in 2000 with no set end date.

As of 2020, the average annual payment received by Oklahoma under the Master Settlement Agreement was around $75 million. About $56.25 million was deposited into the TSET fund. Under State Question 814, the amount deposited into the TSET fund would be about $18.75 million, and the remainder (about $56.25 million) would be allocated to drawing down federal matching funds for Medicaid.

State Question 814 was introduced as Senate Joint Resolution 27 on February 3, 2020. It was passed largely along party lines with 96.5% of Republican legislators in favor and 81.3% of Democratic legislators opposed.

One other measure, State Question 802, is certified to appear on the ballot in Oklahoma. State Question 802, which will appear on the June 30 primary ballot, would expand Medicaid coverage in Oklahoma to adults between 18 and 65 with incomes below 133% of the federal poverty level.

A total of 80 measures appeared on the statewide ballot in Oklahoma from 1996 to 2018. Of the total, 77.5% (62 of 80) of the measures were approved and 22.5% (18 of 80) were defeated.

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