More than $15 million certified for anti-tobacco efforts

eCapitol News
OK-More than $15 million certified for anti-tobacco efforts
Author :
Erin Boeckman

Date :
08/27/2008

(OK) With $15.5 million in earnings certified by the Oklahoma Tobacco Settlement Endowment Trust Fund Board of Investors, the endowment now has more funding for anti-tobacco and health initiatives.

"This certification reflects an increase of $5.1 million or 50 percent over the funds made available last year from investment of Oklahoma's share of the tobacco settlement," said State Treasurer Scott Meacham in a news release. "Our investment strategy is paying off."

Meacham met with other board of investors' members during a special meeting Tuesday to certify the endowment's earnings. The increase in funds was attributed to investment changes undertaken by the board of investors to manage Oklahoma's share of the national Master Settlement Agreement. Specifically, Meacham negotiated new investment contracts to cut the fees paid, and the portfolio was redistributed to generate additional certified earnings while protecting the principal value of the fund, according to the treasurer's news release.

The Oklahoma Constitution limits the tobacco settlement to spending only actual earnings. Seventy-five percent of Oklahoma's share of the Master Settlement Agreement is placed into the endowment each year while the remaining 25 percent is appropriated by the Legislature. While the board of investors manages the investment of the endowment, a separate board of directors makes decisions regarding the allocation of the endowment funds.

"This increased funding will help us provide more program funding to improve the health of Oklahomans," said Kenneth Rowe, chairman of the board of directors for the endowment, in the treasurer's news release. "Once again the board of investors should be commended for their outstanding work on behalf of the state of Oklahoma."

The board of directors' goals include improving the overall health of Oklahomans by reducing tobacco use, improving nutrition and fitness among Oklahomans and addressing opportunities to promote health in Oklahoma, primarily through tobacco control or nutrition and fitness. One of the programs being funded through endowment funds is the Oklahoma tobacco helpline, which was launched in 2003 as a telephone-based counseling service for Oklahomans who want to quit using tobacco. Funds are also used on education and counter-marketing campaigns, according to the endowment trust's Web site.

The endowment currently contains more than $422 million, according to the treasurer's news release. Voters approved creation of the endowment fund in 2000. Each year the board of investors certifies actual dividends and interest earned on the endowment after investment fees are paid. Since its creation, more than $45 million in earnings have been generated by the board of investors. Oklahoma remains the only state with a constitutionally protected endowment to fund programs to reduce tobacco use and improve the health of Oklahomans.

In other business, the board of investors on Tuesday approved changes to the endowment's investment policy. The board approved a change in the benchmark for international investments and investment guidelines for equity investments, said Tim Allen, deputy treasurer for policy and administration.

The board also approved a securities fraud monitoring proposal presented by Nix Patterson & Roach LLP, a Texas-based law firm. The firm will monitor the endowment's investments for possible fraud at no cost to the state, Allen said. The firm will inform the board of investors if potential fraud is found, and costs may be incurred if litigation is pursued, he said.

The board of investors is scheduled to meet again Nov. 19.