OKLAHOMA CITY — Fifteen years after Oklahoma voters created an endowed trust for programs that discourage tobacco use and promote healthy lifestyles, a state lawmaker wants to use the fund to finance pay raises for teachers.
State Sen. Bryce Marlatt, R-Woodward, has proposed a constitutional amendment to let Tobacco Settlement Endowment Trust funds be used to boost the salaries of teachers, who have not had a raise since 2008. Oklahoma teachers are among the lowest paid in the nation with an average starting salary of about $31,000.
"If we don't do something very soon, we're going to be so far behind in being able to compete with our neighboring states that we're going to be in dire straits," Marlatt said.
State lawmakers faced a $611 million hole in the state budget for the fiscal year that began July 1 and are likely to face a similar hole next year due to low energy prices and declining state revenue, he said. But with a core fund balance of just under $1 billion, the tobacco endowment has sufficient resources to finance a pay raise for teachers without sacrificing its original goal, Marlatt said.
Marlatt said the tobacco endowment could be used to finance a teacher pay raise for a couple of years until the state's revenue picture improves. A $5,000 annual pay raise for teachers would have a $300 million fiscal impact.
Any diversion of the endowment's funds would have to be approved in a statewide vote of the people. And officials who manage the tobacco endowment's programs said raiding the fund could erode the dramatic impact it has had in reducing smoking in the state to an all-time low.
"We are keeping the promise of the settlement and addressing tobacco use," said Tracey Strader, executive director of the tobacco endowment. "It's our state's leading cause of preventable death."
The trust was created by a constitutional amendment approved by voters in 2000 and receives 75 percent of each year's payments by big tobacco companies to recover tax dollars lost treating smoking-related illnesses for smoking cessation and prevention programs. The Legislature and the Attorney General's Office receive the balance of the funds.
Only investment income is spent on anti-tobacco programs, and this year the trust has a budget of $42 million to fund cancer research and operate programs like the Oklahoma Tobacco Helpline, which has served 275,000 Oklahomans since it was created in 2003 and saves an estimated $18 million each year in direct medical costs from tobacco users who quit.
Programs funded by the tobacco endowment have helped reduce the rate of adult smokers from 28.7 percent in 2001 to 23.3 percent in 2013. Since 2001, the number of cigarette packs sold has declined by 1 billion, and nearly 80 percent of Oklahoma homes are smoke-free.
"Every part of the state benefits from our media campaign," Strader said. But Marlatt questioned the usefulness of some tobacco endowment programs including one that helps high schools pay for competitive rowing programs.
"I don't see how a rowing program is beneficial to tobacco cessation," Marlatt said.
Alicia Priest, president of the Oklahoma Education Association, Oklahoma's largest education employee association, characterized Marlatt's proposal as "a Band-Aid for a problem that is much, much bigger." Lawmakers should not rely on a one-time source of funds to pay for recurring teacher salaries, Priest said.
"We can't pull money from other agencies and trusts to fix education's problems. We have to look at long-term solutions," Priest said.
Former Attorney General Drew Edmondson, who helped negotiate the master settlement with big tobacco companies of behalf of 46 states in 1998, said dipping into the trust to pay for recurring government expenses was neither wise nor prudent.
"It's not fiscally conservative," Edmondson said.
The former attorney general said a series of income tax cuts in recent years supported by the Legislature's Republican majority has contributed to the state's revenue woes. The state's income tax rate is scheduled to drop again in January from 5.25 percent to 5 percent, reducing revenue by $57 million in 2016.
"The Legislature could do a great service to the state by focusing on restoring the tax base rather than looking every year for quick fixes that don't solve the problem," Edmondson said.