Cut the crap, not the budget.
In April, when I blogged about a lesson I taught using my favorite song, Free Fallin’, I had no idea I was describing what was to happen to the state budget. We should have seen it coming; tax cuts galore; a state budget cobbled together in secrecy and approved by legislators who had about 24 hours to view it; funds and estimates that were never anything better than an illusion. Yeah, this was our fate the whole time.
By definition, any object in motion, only affected by the force of gravity, is in a free fall. I think we’re just about there. And it’s a self-inflicted nightmare.
Tonight, I want to thank Keaton Fox with Fox 25 in Oklahoma City for covering a press conference of state leaders. Since there’s nothing on either House Speaker Jeff Hickman’s page or Senator Clark Jolley’s page on the Legislature website, I’ll use Fox’s news story as a de facto transcript of their statements. As necessary, I’ll also pull from William Savage’s coverage on NonDoc, as he hits a few different points from the press conference.
Here are the basic facts:
- Oklahoma faces at least a $157 million shortfall for the rest of this fiscal year (July 1, 2015 – June 30, 2016).
- Official estimates by the Office of Management and Enterprise Services (OMES) place the shortfall for the coming fiscal year (July 1, 2016 – June 30, 2017) at $900.8 million.
- Oklahoma Secretary of Finance Preston Doerflinger expects those numbers to get worse.
This is grim news, unless you choose to spin it differently:
“The fact that we find ourselves in this position is providing us with a tremendous opportunity,” Doerflinger pitched to a crowd of reporters. “I’ve been talking for years about the structural problems the state faces. Now, we find ourselves in a very challenging situation. Panicking about the situation is not productive. We need to use this as an opportunity to do the things we otherwise might not have the will to do.” [NonDoc]
It’s a tremendous opportunity?
That’s one of the most absurd things I’ve ever heard, and I’ve lived in Oklahoma all my life.
“We need to cut at least $157 million dollars across the board,” said finance secretary Preston Doerflinger. “We’ll probably cut a little more than $157 million to give an extra cushion and somewhat soften next year’s reductions.”
For the next fiscal year, estimates are projected at $900 million, but that will likely worsen Doerflinger said.
“Frankly, I see the situation worsening by the time [the legislature] is back in February,” he said. “I think the hole could get bigger this year and next year.”
Doerflinger says though the situation is bad, it’s not as bad as 2009, when cuts to agencies were close to 7%. This year, agencies are looking at another 2-4%, though he cautioned the problem was fluid and could worsen.
“Make no mistake, the vast majority of the challenge we face ahead of us started at the OPEC building in Saudi Arabia, not at this building,” Doerflinger said. [OKCFOX]
To paraphrase Shakespeare, I think the Secretary doth protest too much. OPEC has artificially deflated the price of oil. Every time I pass OnCue and see the price of gas lower than my weight, I flinch. It’s not all OPEC, though. Doerflinger and State Treasurer Ken Miller said as much:
While Doerflinger and other state leaders blame oil and gas, they also point to budget fixes in previous years, including last year, where one-time funds were used to shore up cuts. Doerflinger, along with state treasurer Ken Miller, both say that these methods don’t work, and say they’ve warned state leaders against them.
“Outside of government, it is well accepted that nonrecurring revenues should not be used for ongoing expenditures and that recurring revenue streams should not be cut when current costs exceed them,” Miller wrote in his monthly commentary. “Yet under the capitol dome, that has become standard operating procedure and changes shouldn’t be expected next session given the expected severity of the shortfall.” [OKCFOX]
My favorite phrase here is outside of government. School districts, which are government entities, get this. We project budgets out for several years. In a year that appears to leave a healthy carryover in the budget, we know sometimes that we are seeing an illusion. We don’t increase recurring costs based on a one year surge. It has to look sustainable.
Here’s what really ticked me off tonight, though:
[School districts] have more money to spend than they ever have,” Hickman said, when asked about school funding.
“When you look at all sources of their funding… it’s over $8 billion, if you take out retirement, it’s just under $8 billion,” [Speaker Jeff] Hickman said.
Hickman acknowledged the state’s teacher shortage, saying every state is suffering with the problem except Pennsylvania, along with teacher pay problems, but tempered it with total spending concerns.
“Our concern is if we’re spending more money than we ever have, why is that not getting into teacher salaries?” Hickman said. “In large part, those dollars haven’t gotten to where they needed to go.”
Hickman says the big problem is health insurance costs that eat up step raises and increased to teacher pay. Hickman says the state pays $420 million in health costs for education employees alone, with an additional $30 million expected the coming year.
He says if the health costs hadn’t gone up, you could give each teacher a $10,000 pay raise.
None of that is true. None of it. The cost of health insurance for teachers has increased by about $1,600 per year in that time – not $10,000. They’re also not spending more money on education than ever before.
Let’s look at the numbers again. Oklahoma has cut funding by nearly 25% since 2008. Next highest is Alabama, and it’s not even close. Speaker Hickman can try to explain his way out of this, but nobody who truly supports public education should buy it. It’s complete garbage.
Here’s another way of looking at it. During the 1999-2000 school year, over 57 percent of school district funding came from the state. During the 2013-14 school year (most recent year with data), that was down to 48 percent. The state has abdicated its responsibility, and in a huge way.
Here’s another way of looking at it. Districts get state aid based on a formula that involves weighted average daily membership (WADM). Every student enrolled counts for at least 1.0 weights. Some categories of students get extra weights (such as gifted, special education, economically disadvantaged). Below is the state aid for WADM for the last several years (all that are available online). Where exactly is the increase?
*Based on November calculations – the final amount will be considerably lower.
We are spending less per pupil. When you calculate the increase in the cost of living over time, the cuts are worse.
Now, imagine another billion dollars on top of that.
Senator Clark Jolley only echoes Hickman’s claims:
“On average, no question, every school district in Oklahoma has more money than it’s ever had,” Jolley said. “Their argument is that they also have more students than they’ve ever had. Ironically, the chart that shows that Oklahoma leads the nation in cuts to spending does not include… a lot of dollars that are directly flowing to education. And that report is flawed and is not comparing apples to apples.”
Statistics from the National Center for Educational Statistics, however, that compares all school districts equally, shows Oklahoma’s per-pupil spending is ranked 48th in the nation.
Jolley said at a national conference with other budget leaders, many others had the perception that they were 48th in the nation, suggesting that many states are low in spending, depending on the formula. [OKCFOX]
Jolley blames the methodology. He doesn’t think the policies he’s pushed during the last 10 years have anything to do with it. The idea that districts have more money than ever before is simply wrong. It’s a lie. I can’t even figure out what makes people like Hickman and Jolley think it’s ok to repeat. Sure, blame the districts. We funded raises; those mean districts and Obamacare kept them from you.
We still get less money than we did eight years ago. We have 50,000 more students. Don’t ever forget that.
“As we get more of our supply on the market, then the price should go back up,” Hickman said, pointing to a 70 percent drop in oil prices in the past year. The price even dropped Thursday, finishing at $34.95 for a barrel of crude.
Jolley noted a different sort of oil-price paradox during the press conference.
“We’re one war in the Middle East away from high gas prices and high oil prices,” he said.[NONDOC]
So, there’s that. Jolley has a solution. More war.
Keep in mind Jolley and Hickman are both term-limited. Who knows what office they’ll run for next?
Friends, we need to remember all of this. According to the people running our Legislature, it’s the fault of the districts that teachers can’t have raises. According to them, the tax cuts are still working.
We know better. We know that when the 2016-17 school year opens, there will be more students and fewer teachers in our schools. We know that districts will have made all kinds of distasteful cuts. We know all of this, and our Legislature does too. Some of them just like to pretend differently.
We’re in a free fall, approaching terminal velocity. It’s time to make it stop.