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Actual Ideas for Actual Needs

February 18, 2014

Today’s editorial in the Oklahoman (side note – wondering how many blog posts I’ve started that way) questions HB 2642 by Representative Lee Denney which would increase earmarked funding for education by $57 million this year and $575 million annually by 2023. The paper finds multiple flaws with this plan:

Schools, by the way, already get directly apportioned money off the top. That sum has increased from about $1 billion in 2004 to $1.4 billion this year. A similar effort significantly improved transportation funding, but there are important differences. For one thing, lawmakers truly neglected transportation for decades. The 2005 state appropriation was virtually unchanged from 1985 — and the condition of Oklahoma roads proved it.

In comparison, public schools are typically a top legislative priority. The $575 million increase Denney seeks over 10 years may sound impressive, but the Legislature increased school funding by $524 million in just four years between 2005 and 2009 — even as income taxes were cut. Recent years have seen some reductions to state school funding, but that action was forced by the national recession, not legislative hostility.

Furthermore, schools aren’t solely reliant on state funds. Districts’ local tax revenues have increased substantially since 2008. The amount districts carried over at the end of each fiscal year has surged 67 percent, rising from $460 million to $771 million from 2007 to 2013. Denney’s proposal would put school spending increases on autopilot, regardless of actual need, increased local funding or whether existing funds are being used efficiently. This would likely force discretionary budget cuts elsewhere, such as public safety, even when total revenues increase.

During the last six years, it’s been hard to argue that public schools have been the top legislative priority. Taxes have been a higher priority. Social bills that spur expensive legal challenges before being overturned by the courts have been a higher priority. In fact, the last two legislative sessions, since I’ve been watching closely as a blogger, education funding hasn’t been set until nearly the last minute.

The local funding argument also doesn’t hold water. In 2008, state funding accounted for 53% of all district revenue, while local funding produced 35%. By 2012, the splits were 48% and 39%. I don’t have the 2013 and 14 numbers, but the trend has moved in this direction for more than a decade. Yes, education saw a surge of funding in the middle of the last decade. This was after another downturn in 2002-04. Meanwhile, enrollment continues its steady growth and legislative mandates continue to skyrocket. Additionally, because of SQ 766, school districts have already started feeling the loss of local tax revenue, to the tune of $60 million annually – $23 million for AT&T alone (which should be used to help their network quit dropping calls).

The most insulting part of the editorial was the use of the phrase regardless of actual need. The SDE recognizes that the teacher shortage being felt in many parts of the state right now is only going to get worse. Although Janet Barresi’s recommendations are a mix of good ideas (restoring the Teacher Residency Program) and bad ones (increasing the pipeline from non-traditional workforce pipelines, such as TFA), they show that she’s paying attention to the problem. Superficially, so does her 2K4T campaign gimmick. Yes teachers deserve a raise. Yes, some districts have large carryovers right now. Some don’t, however. Bleeding your reserves dry is not a sustainable strategy for improving teacher morale (which Marisa Dye explains extremely well).

Many legislators are starting to grasp the severity of the problem. Yesterday, two bills increasing teacher pay were passed out of committee. This would cost about $237 million annually. That’s more than the Fallin budget, which offers no specific details. That’s more than the Barresi budget, which has way too much money tabbed for programs outside of the funding formula. Pat Ownbey from Ardmore has an idea of how to pay for this.

The source of funding would be a tax break on horizontal drilling. When the tax break was granted by the state, horizontal drilling was seen as an experimental endeavor. To stimulate drilling, a 7 percent tax on production was dropped to 1 percent. Ownbey said the tax break is scheduled to expire this year. A tax of one percent gives the state $332 million.

“If we negotiated somewhere in between one and seven percent, we would have enough to take care of the teachers and some of the state workers that have not received a pay increase,” Ownbey said. “The tax break was given over a period of time so they could experiment with horizontal drilling, and it worked. It has done a great job, but the period of experimentation is over. It is not like we are running up taxes.”

Ownbey said Texas charges 6 percent and South Dakota charges 11 percent. Former Speaker of the House T.W. Shannon (R-Lawton) is in favor of making the tax break permanent to encourage drilling, but Ownbey said new House Speaker Jeff Hickman (R-Fairview) has not closed the door on the issue.

“We have infrastructure we are not taking care of,” Ownbey said. “I talked to the speaker to see where he stood on it, and he is not closing the door on it. My thoughts, on what he told me, are that it is an issue worth looking at it.

“The companies are coming to Oklahoma because the oil is in the ground. We need to look at this revenue as revenue we can invest in our infrastructure.”

The money is there, and somebody has a plan for making it available where it’s needed. This is where the legislature needs to focus. It might not be what the Oklahoman wants, but maybe that means we’re getting somewhere.

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