As you probably know by now, the state of Oklahoma declared a revenue failure again this week.
For the second time in two fiscal years, the state of Oklahoma has declared a revenue failure, meaning tax collections are below the estimates used to pass the state budget last session.
“Our revenues are difficult at best, and maybe they fall into the category of pathetic,” Secretary of Finance Preston Doerflinger told a packed room of elected officials, bureaucrats and media this morning. “Our situation is dire. I beg you to have an appreciation for the situation we have before us.”
What this means is that state agencies will receive a reduction in funding from what was budgeted at the beginning of the fiscal year, which runs from July 1 to June 30. For public education, that’s over $46 million in mid-year cuts.
Doerflinger could not emphasize enough how critical this situation is.
Doerflinger also alerted the board to an even larger budget hole for Fiscal Year 2018 than had been anticipated: $878 million, up from $868 million. He more than subtly urged the board — and legislators — to consider Fallin’s bold revenue ideas.
“I don’t know how much more I can emphasize that the time for action is now,” Doerflinger said. “It’s not a game. We need new revenues.”
Doerflinger spoke at a podium directly in front of Fallin and Lamb, who stepped down from Fallin’s cabinet last week because he said he could not support the governor’s proposal for sales tax to be implemented on a variety of services.
“The governor is a pragmatic person, a reasonable person,” Doerflinger said to a silent, crowded room. “She has put forward a bold proposal. I know she and I look forward to specific plans to be revealed by other people involved in this process.”
Fallin’s bold proposal includes eliminating the grocery sales tax and corporate income tax. She would replace them with a menu of taxes on services, such as tattoos, oil changes, and haircuts.They also want to increase the cigarette tax.
The governor’s estimates (which are Doerflinger’s estimates) are huge. I question whether they’re reliable. These are the same people who have worked with legislative leaders to “balance” the state budget each of the last three years, leading to massive shortfalls every time.
According to Fallin’s estimates, applying sales tax to services would bring in $1,703,879,742 (that’s 1.7 Billion dollars with a B) to government coffers. Of that, the state government would receive $934,247,035, county governments would get $648,274,017, and cities would collect $121,358,690.
This is essentially a 10% tax hike on small businesses and consumers across the state, as the cost of doing business and obtaining services will go up about 10%.
Fallin lists 164 different categories she wants taxed. This includes all manner of construction-related contracting services, cable TV, pet grooming, carpet cleaning, business and legal services, utilities for residential use, funeral services, medical services… the list is very long, and you can view it here.
It’s not a very good plan, but at least it’s a plan.
I’ve been pretty quiet the last few weeks. I’ve seen lots of revenue plans (such as nearly tripling the beer tax) and teacher pay raise bills. What I haven’t seen is any momentum behind a solid idea to fix the fundamental problems in this state.
For three years, we’ve listened to state leaders blame the budget hole on low oil and gas prices. In her State of the State address this year, Fallin even blamed online shopping for contributing to lower state revenues.
These things contribute, but not as much as the tax cuts our state has passed during the last ten years. And yes, I know that dates back into Brad Henry’s second term as governor.
The Oklahoma Policy Institute estimates the annual cost of these tax cuts at more than $1 billion. You and I have barely felt those cuts. Most are large cuts for the wealthy and cuts for oil and gas. Other states that rely on fossil fuels for revenue haven’t been hit this hard. They also haven’t decimated their own tax base to intentionally starve the beast of core state services.
Repeating the gravity of the situation, Doerflinger spoke Friday to a Republican group in Tulsa. You can watch clips of his remarks at the Tulsa World website. I’ve transcribed a few sections:
0:25 At some point, we have to determine what type of state we want. Do we want to invest in things like common education or not, and if not, and if we’re not, then we should just tell teachers – and I have friends that are teachers, I have friends that are corrections workers, I have friends that are child welfare workers – at some point we just need to tell those people that we don’t care, or we need to decide that we need to invest in those areas. And I’m telling you, that there are still areas and places we can improve from an efficiency standpoint.
Based on the last few years, I’m reluctant to say what kind of state his audience envisions. Fallin is still governor. We keep digging deeper holes in our budget. An actual plan to raise teacher salaries by $5,000 was defeated at the polls in November. Like it or not, this is the Oklahoma standard right now.
1:50 And agencies have peddled doubt and fear for so long that it’s hard for you to believe me whenever I stand up in front of you and try to make an argument for the fact that these agencies have taken serious cuts over many years and if we’re going to hit them this year with the Draconian-style cuts that I think some people would have us hit them with, then we’re at risk at this point of doing real harm. Some of these people that we’re talking about, if they sustain these type of cuts – and I’m not a dramatic person – people die. We’re putting our corrections workers at risk. We’re putting child welfare workers at risk. And then again, if you care about teachers and the teacher pay raise, I don’t know how you fund that without looking at some types of new revenue.
If stating directly what ongoing cuts mean to those we serve means we have peddled doubt and fear, then I don’t know what to tell you. Then again, he’s not a dramatic person, and he thinks people are going to die if we don’t do something different.
2:40 If the agency known as the State Department of Education and if the Education Establishment in general would start coming with more solutions to the problem versus just the answer being solely we need more money, because there are opportunities to realize efficiencies within the common education universe. The problem is that the Education Establishment really is fixated on just maintaining the status quo, which is sick and really disgusting and it doesn’t benefit the children in this state, so enough of that already.
That’s some weird phrasing: the agency known as the State Department of Education. How else would they be known? And of course, there’s the red meat for his base: the Education Establishment.
I can’t speak for anyone else, but I’m fixated on improving the education my district provides our 14,300 students. Cutting $5,000,000 from our budget last year and over 100 support, teaching, and administrative positions doesn’t make that easy. Losing almost $1.3 million in the second half of this fiscal year doesn’t either. School funding is being held hostage by someone who shows no evidence that he can reverse trend behavior.
And that is really disgusting.
3:20 What we are doing is not sustainable. It’s not, and we need to figure out – the collective we – how we want to approach that. I – again, if anybody things the budget that I pushed out this year is the budget that I wanted to push out – it’s just not true, but it was the reality that we faced in order to try to invest in our state and try to avoid doing real harm in areas where – I can tell you, it was a guiding principle. The governor has told me, the last two years for sure, please try to protect areas, Preston, where people die, or real harm occurs, and that’s what I’ve tried to do.
This entire scenario reminds me of a scene in The Hunt for Red October. A Russian admiral, played by Sean Connery, wants to defect to America and bring his big, bad new submarine with him. He’s being chased by another Russian submarine, which fires a torpedo. Connery’s sub outmaneuvers the other one, and the torpedo tracks towards the one that fired it.
One of the Russians turns to the ship’s captain and says, “You arrogant ass; you’ve killed us!”
As with the torpedo movie, we’ve taken the safety features off our budget. We’ve all but eliminated taxes on horizontal drilling. We give money away by the bucket to corporations that fail to invest it back into our state. We keep cutting taxes and then desperately trying to steer out of the way of disaster.
And every time we do this, someone in the Education Establishment will say how grateful we are that we were held flat, as opposed to facing more cuts.
I’m over that.
And if you want a list of some of the suggestions we’ve made over the years, check out Rob Miller’s blog post from today. He’s not thrilled with Mr. Doerflinger either.
During a speech to the Tulsa Republican Club Friday, State Finance Secretary Preston Doerflinger remarked that the Oklahoma state government cannot continue to function at anything close to current levels without new revenue, calling the state’s current budgeting path “not sustainable.”
Duh, ya think!
Thank you, Preston Obvious.
Rob discusses several funding and policy solutions we have proposed for years. We’re not beholden to the status quo. I would love to change many things about how we pay for education and how we provide it.
What the Education Establishment can’t do is fix the state budget. Hopefully someone can.
While the school year and legislative session were both coming to an end in May, one story of budget cuts – and not a public education story – really stuck with me. From KFOR:
The Department of Human Services is freezing a program which helps low-income Oklahoma families pay for child care.
New applications within the child care subsidy program will soon be denied in an effort to save money.
Those who are currently enrolled in the system will not be impacted.
It’s those moms who are currently pregnant or those families who will soon need the financial help who are about to have to figure out a way to do without.
Baylea Brown is a single mom in the Oklahoma City area.
She relies on the state subsidy to help pay for child care for her 9-year-old son, Gavin, who has special needs.
“Because of the subsidy, I can pay my rent. I can pay for food,” she said.
It’s a subsidy that helps low-income Oklahoma families.
But, starting June 1, 2016, the program will be frozen.
“The agency has run out of money this year,” said Sheree Powell, spokesperson for DHS.
NewsChannel 4 obtained an internal memo from DHS.
The memo was sent out earlier this week, alerting employees to the changes that are coming.
The memo states “Due to the ongoing state budget shortfall, DHS will freeze enrollment for the child care subsidy program effective June 1, 2016.”
It goes on to say “Although new applications will not be approved, applicants still have the right to apply for the program and should not be prevented from doing so. However, applicants should be informed that all new applications will be denied. Notice of denial will be mailed to all who apply after the deadline. This decision cannot be appealed. However, if a client requests a hearing on this decision the request should be accepted and forwarded to the DHS Appeals Unit. The Appeals Unit will notify the applicant that the decision cannot be appealed.”
DHS also has concerns.
“Some of the things we’re concerned about is that families won’t be able to find quality child care, or they’ll start leaving their children in unsafe situations, maybe with relatives or friends who really aren’t qualified to care for their children,” Powell said.
Brown’s glad her subsidy is safe, but she knows just how hard life will potentially be for the families who will soon be denied the help.
“That just sounds kind of impossible – to work and to pay bills and to have daycare,” she said.
This is reality for families below the poverty line. Society at-large (me included) wants parents to be able to work. Often the cost of child care is an obstacle. Freezing the subsidy will keep thousands of parents out of the workforce. Remember that the next time you stumble across a conversation in which your friends and neighbors are talking about poor people just wanting handouts. The state has just frozen a program that would help people who are trying to find a place in the workforce.
Another non-education cut from April also has stayed with me. From the Tulsa World:
A state association of health-care providers claims up to 93 percent of Oklahoma nursing homes will cease operating if a 25 percent cut in the Medicaid rate goes into effect, creating a crisis for Oklahoma families and jeopardizing 16,900 jobs.
This could place about 16,800 elderly and disabled patients at risk of being displaced from their nursing homes.
The decision by the Oklahoma Health Care Authority to slash the rate came last week as the state slips into a deepening revenue failure, estimated to reach at least $1.3 billion by next fiscal year.
In the past five years, almost $500 million has been cut from the Medicaid program, mostly by reducing rates to health-care providers and restricting services available to SoonerCare members. The past decade has seen about $1 billion in cuts.
The recent rate decrease comes from agency officials anticipating cuts of $64 million in the program needed by the end of June.
This reduces federal matching funds, which will total a loss of $164 million in total state and federal funding for Oklahoma Medicaid. The reduced rate goes into effect June 1.
It may get worse. Agency officials have stated another $100 million reduction may be in store for next fiscal year’s budget.
This story alarmed me mostly because I had no idea how reliant our nursing homes were on state funding. I knew they weren’t get rich schemes for their operators, but I didn’t realize they were functioning that close to the margin between making a small profit and having to close.
I also didn’t realize that SoonerCare had scaled back services so much. My own kids were on SoonerCare when I was a classroom teacher. We also qualified for WIC. Even though this cut is not directly an educational issue, it is probably worth noting that state programs subsidize a number of public employees – education and otherwise.
I mention all of this now because of Governor Fallin’s announcement that she’s interested in having the Legislature return to the Capitol for a special session to discuss teacher raises.
Gov. Mary Fallin on Wednesday said she is considering calling a special session to ask lawmakers to use excess state funds on teacher raises.
The state recently closed out the fiscal year and had $140.8 million left. The action comes after a revenue failure that resulted in two cuts to state-appropriated agencies.
The cuts were deeper than were needed, said John Estus, a spokesman for the Office of Management and Enterprise Services.
“I’ve begun discussions with legislative leaders to consider calling lawmakers to return in special session to address the issue of teacher pay raises,” Fallin said. “I continue to support a pay raise for teachers, having called on lawmakers at the beginning of this year’s session to approve a teacher pay raise.”
In other words, state agencies received cuts that were bigger than what they needed to be. The timing of the announcement, with run-off elections around the corner, and with momentum building for State Question 779 (penny sales tax), is one thing that concerns me. That’s just one thing, though.
The Tulsa World included a graphic with their story showing the amount that would be returned to different state agencies, if the Legislature does nothing.
Look at that list. Yes, public education would receive $40 million back. Fallin is proposing that our legislators return to the Capitol to make that happen. She’s also asking them to give us the $23 million from health care, $20 million from higher education, $16 million from DHS, and every other penny.. I have a problem with that. Each of those entities serves our students too. Everything on this list is a core function of state government.
There is nothing prudent or conservative about trying to give teacher raises on the backs of these other agencies. Unfortunately, some of our state leaders are pathologically committed to trying to convince us that teacher salaries can increase significantly without generating new revenue.
That brings me to a third objection: this isn’t recurring revenue. In that sense, this idea is nothing more serious than Janet Barresi’s ill-fated 2K4T scheme three years ago. I’m pretty sure we can’t guarantee that the state will more or less forget to allocate $140 million next year too, can we?
Again, this isn’t new money. It’s money that OMES cut in excess of what they had to. According to CCOSA, the cuts were in fact illegal.
“We believe the director of the Office of Management and Enterprise Services did not have the legal authority to reduce allotments to state agencies based on estimates that the state general revenue fund might fail,” wrote Owens, an attorney. “We respectfully request that the allocations that were unlawfully reduced from the state general revenue fund be immediately returned to the agencies from which they were cut.”
Finance Secretary Preston Doerflinger, who oversees the Office of Management and Enterprise Services, said the allegation that the cut was illegal is “as laughable as it is totally wrong.”
“These reductions were made using the same statutory authority and procedures as all other revenue failure reductions in prior years, many of which also wound up being deeper than necessary and also resulted in excess funds being allocated either administratively by this agency or at the discretion of the Legislature,” Doerflinger said. “When this year’s midyear cuts were made, OMES pursued the only lawful avenue given that revenues and oil prices were in a freefall.”
I don’t know about you, but Doerflinger’s defense seems to be that the state budget was in a freefall and they made a guess at how much to cut. I can live with that explanation. Seriously, as someone whose leadership team made a menu of misery not knowing how deeply we needed to cut, I get it.
What I don’t get is the idea that we can somehow get a teacher raise out of this. Governor Fallin has been calling for one since her State of the State address in February, but there has been no movement on any of her revenue-generating ideas (that she somehow doesn’t think are the same thing as tax increases. Her logic pretty much boils down to:
“The Legislature is still being paid and is still on the state payroll now, even those who are term limited out,” Fallin said. “I think they should come back and do their job.”
Based on the quotes I’ve seen in articles and on social media from various legislators, most aren’t thrilled at the idea of returning to the Capitol. Even if they were, they’d have to get that bus off of them first.
Meanwhile, the Oklahoman thinks Fallin’s plan is adequate, and the Oklahoma Council for Public Affairs think teachers in Oklahoma are doing pretty well already. I’m not quoting either of them, but the links are there. Look if you want.
My gut tells me there won’t be a special session. The people running for re-election this fall probably don’t want to take money from all the other state agencies and give it to public schools right now. Meanwhile, this will be a small speed bump for the SQ 779 supporters. Unless a genuine and sustainable plan appears from the people who’ve had years to write one, the penny sales tax is still the best option available.
Still fuming over yesterday’s rigged committee vote to move Representative Jason Nelson’s voucher bill to the house floor, I didn’t get my Two Things for Tuesday posted this morning. That’s probably a good thing. The delay gave me time to read from the top education news source in Oklahoma, the Tulsa World.
House Bill 2949, by Rep. Jason Nelson, R-Oklahoma City, advanced on a 9-8 vote. Votes from Speaker Jeff Hickman, R-Fairview, and Speaker Pro Tem Lee Denney, R-Cushing, were necessary to get the measure through the committee, where a similar bill had failed on a 9-9 tie a year ago.
The speaker and speaker pro tem can vote on any bill in committee but generally do so only when needed for a majority.
The difference from a year ago was that Rep. Dennis Casey, R-Morrison, a former educator who voted against the measure in 2015, has been removed from the committee and not replaced. All other votes were exactly the same as a year ago.
This merely continues a pattern that frustrates me. With every other issue that is important to our state leaders, they ask the experts. When it comes to education, they want us on the sidelines. Actually, they don’t even want us that close. See thing one and thing two below.
1. State Senate President Brian Bingman told the Oklahoman editorial board last week that the state needs to proceed with caution when it comes to rolling back any tax credits to try to fix the state’s budget problems.
Tax incentives are being reviewed as well. Yet many companies’ financial plans are based in part on promised tax breaks. Abrupt elimination of incentives could have serious, negative impact in the private sector.
Bingman said business leaders will be heavily consulted, and predicted most changes to tax incentive programs will not take effect until future years. Yet within a few days, Bingman appeared to send a different message after Gov. Mary Fallin urged caution over changing incentives. Fallin said The Boeing Company bowed out of two Oklahoma projects after a moratorium on some tax incentives passed out of committee.
Bingman has also proposed school consolidation (as has the governor). Were any school leaders heavily consulted? What about students or parents? It’s this double standard that infuriates all of us who work in public education. It’s not the only example, though.
2. A year ago at this time, the governor imposed a hiring freeze and a moratorium on raises. To say that exceptions have been granted is sort of like saying there are currently a few sharks off the coast of Florida.
Not only were there more than 13,000 exceptions, but the reasoning is another slap in the face to teachers. State Finance Director Preston Doerflinger didn’t want to lose good people to the private sector.
“I’m never going to be shortsighted in potentially losing a high-quality employee over not a lot of money to the private sector,” Doerflinger said.
Does anybody we’ve elected care that schools are losing high-quality employees to the private sector (or to other states)? Do you people not hear the irony?
I know that politicians have to constantly work their base. That’s why they call the groups like the State Chamber, OCPA, and OCPA Impact “grassroots” organizations. These are the base supporters for the voucher wolves and elected leaders who are determined to take even more money away from schools. The nine representatives who voted for HB 2949 yesterday listen to these groups – not to public school parents, educators, or the majority of their voters.
Well, I’m no politician, but I know my base. It starts with students and parents. It extends to teachers and principals. It includes strong support for public schools from the business community. All of us who serve the education community would do well to remember this.
Somebody has to.
Fridays are typically fun times for catching up on Twitter. Take yesterday, for example. While waiting for an appointment, I came across this exchange between Tyler Bridges and Brent Bushey (and eventually Scott Haselwood and me):
On the Turning Away isn’t my favorite Pink Floyd song; it’s my favorite song that Pink Floyd released during my senior year of high school, though. And the lyrics remind me of how our state leaders have impacted public education in Oklahoma during the last several years.
On the turning away
From the pale and downtrodden
And the words they say
Which we won’t understand
“Don’t accept that what’s happening
Is just a case of others’ suffering
Or you’ll find that you’re joining in
The turning away
Since 2008, Oklahoma has cut state funding for public education by more than any other state. My god, I don’t know how many times we have to repeat this. All I know is that we will soon get to update our bar charts. As our state treasurer reports, our revenue situation is just getting worse.
Oil and gas production is down. This leads to jobs being cut. This leads to people not being able to shop. This leads to another declaration of revenue failure in the coming months.
Whatever your school district has told you they’ve been cut in funds this year by the state, prepare for it to get worse. Much worse.
I’m angry. Yes, I get that oil producing countries in far-off parts of the world have created the market glut that has impacted our economy.
What I don’t get is where the influx of money was just a few years ago. Right now, when we’re hurting, oil is trading for $30.89 a barrel. In June 2014 – merely 20 months ago – it was at $105.22. In April 2011, it was at $115.76.
Did our state leaders restore funding for education and other core state services during that time? Of course not. They cut taxes on corporations and the rich. The middle class really hasn’t felt that. Again, how many times do we need to repeat that before people understand it?
More Pink Floyd:
It’s a sin that somehow
Light is changing to shadow
And casting it’s shroud
Over all we have known
Unaware how the ranks have grown
Driven on by a heart of stone
We could find that we’re all alone
In the dream of the proud
As a superintendent who recently conducted a district climate survey (with 400 responses and counting), I can tell you that I hear the calls for smaller class sizes and larger salaries. These are things I want to see happen. When our district faces cuts of millions of dollars next year, though I don’t see that it’s possible. That’s why we need more patron involvement.
It can’t just be educators beating down the doors of our elected leaders. We need parents and community members saying that enough is enough! And before any smart-aleck representative asks back, “How much is enough?” I’ll just let you know that we’re nowhere close. I don’t have a number.
Maybe enough is giving our schools funds to restore the class size limitations enacted over 25 years ago that the state suspended during the recession. Maybe enough is getting Oklahoma’s teachers paid something resembling something. Maybe enough is funding textbooks, technology, and buildings adequately so that districts don’t have to deepen the debt burden to their communities through bond elections – that is, the districts with any sizeable bonding capacity. Maybe enough is listening to the students, parents, and teachers who decry failed accountability measures such as ACE, RSA, TLE, and A-F, and the tens of millions of dollars we pour into preserving them each year.
I don’t have a number. You’re lucky I have my nice words. Just keep adding, and we’ll tell you when you get there.
Let me skip to the end of the song:
No more turning away
From the weak and the weary
No more turning away
From the coldness inside
Just a world that we all must share
It’s not enough just to stand and stare
Is it only a dream that there’ll be
No more turning away?
Who are the weak and the weary? It’s our students, most of whom qualify for lunch subsidies. It’s their parents, many of whom work multiple jobs just to elevate their household income from the free lunch range to the reduced-price range. It’s our teachers, who feel the lack of funding and respect from the state as intensely as anyone. It’s our support staff, who are often left out of the conversation when we talk about raises. It’s our building principals, who have less time to run their schools because of senseless mandates. And it’s our central offices, who – when we’re working at our best – try to bear the burdens of all of the rules and moving targets thrown at us by the federal and state government, so that the impact on schools is minimal.
What is the coldness? I’d have to say that this describes the words of the Legislature and Governor. Don’t say you support education. You had a chance when times were good, from 2011-2015. You missed it. And now, when things are tough? You’re all voucher this, A-F that. Well A-F that is right!
Look, I know that the Oklahoman wants us to keep the conversation civil. I also can’t forget that the most read post (by miles and miles) on my blog was a guest column written by a pissed off parent. Civil is good. Logical is good too. It doesn’t always change the world. Here’s from the paper this morning, though:
There will plenty of debate this legislative session over education funding, school choice and other issues. Here’s a call for voices on both sides to keep the rhetorical low blows to a minimum. Our concern stems from some of the things written by bloggers at #OklaEd, a site that allows educators to use Twitter to “share ideas, resources and inspiration.” One English teacher attached a graphic to his anti-education reform post that said, “Admitting you’re an a–hole is the first step.” Writing about Education Savings Accounts, an administrator at Sand Springs said, “If you are a parent who wants to use the Bible as your child’s Biology text, ESA’s are for you.” Passionate defense of education and educators in Oklahoma is one thing. But such uncivil discourse does little to help the cause.
First, it cracks me up that they refer to #oklaed as a site. It’s a hashtag. On the Twitters. I shouldn’t be too harsh, though. My own teens often tell me I’m Internetting wrong. Maybe it’s a site if you most recently checked your email from your Earthlink account that you installed on your Windows 98 computer with the disk that you picked up at Wal Mart. Or something like that.
Second, admitting you’re an a-hole is a step. It’s probably not the most constructive place to start a policy discussion, though. Maybe a better way to say it is that if you’ve consistently supported policies to over-regulate public schools in Oklahoma while draining them of funding and blaming all the regulation on the feds and then shown yourself unwilling to loosen those regulations once the feds told us we could, and if you constantly fight to send tax dollars to private schools that will have none of the fiscal or academic accountability as public schools…wait, what was I saying? Oh yeah, I was explaining why we shouldn’t call people a-holes. Sorry, I’ll have to come back to that another time. I kind of got off track.
Third, we must be getting to them. It makes me think of two movie scene. First is from The Princess Bride:
“What did this do to you? Tell me, and remember, this is for posterity. Be honest. How do you feel?”
The most civil thing we can do is to be honest. It’s for posterity. We’ve said please. We’ll keep saying please. There is also a time to look people in the eyes and say, “You’ve failed us.” We can’t turn away from that.
The other scene comes from The Shawshank Redemption (of course it does).
“Hope is a good thing, maybe the best of things. And no good thing ever dies”
Maybe this is why we stick with education. We know that our kids need us. We know that our colleagues depend on us. Maybe we’re just gluttons. All I know if that I’ll be civil and angry, to the extent that I can do both. And that I’ll take no part in the turning away. After all, it’s not enough just to stand and stare.
Do you remember a few days ago when I posted The Next Cut is the Deepest? Well, it’s here. And it’s real. And it’s spectacular.
Do you also remember how I posted the meme of Ralphie from A Christmas Story – the one where he drops the lugnuts?
We may need to kick it up a notch.
State Finance Director Preston Doerflinger just announced that all state agencies will receive a three percent cut to their state aid for the current fiscal year. That doesn’t mean that future state aid checks to districts will be cut by three percent. That means districts – unless the SDE has some triggers in place to mitigate the impact of this cut to schools – will have a three percent cut that is retroactive to July 1. Immediately, Superintendent Hofmeister issued a response:
Superintendent Hofmeister comments on education funding cut due to state revenue failure
OKLAHOMA CITY (Dec. 23, 2015) — State Superintendent of Public Instruction Joy Hofmeister made the following remarks today after the Office of Management and Enterprise Services announced state agencies will receive a 3-percent cut for the remainder of Fiscal Year 2016 as the result of a state revenue failure. That amounts to a $46.7 million reduction in funding for preK-12 public education between January and June of 2016.
“Now that we know the extent of the cut for the remainder of the fiscal year, school districts will soon be able to plan accordingly. The reduced funding was inevitable in the wake of the revenue failure, but I know that the Oklahoma State Department of Education and district leaders statewide are committed to lessening the impact on students as much as possible.
“School districts will not be affected equally. Some districts rely on state aid for upwards of 90 percent of their budget. Others, particularly those in western Oklahoma, will feel very little impact from this cut. Within the next two weeks, districts across the state will receive a mid-year adjustment that reflects the revised figures.
“It is unrealistic to suggest there will not be some adverse effect on students, but Oklahoma educators will do what needs to be done to protect classroom instruction.”
She’s correct. There will be adverse effects on students. There’s no way around that. As a superintendent, my mind is already spinning. So much for a break, right?
Just yesterday, we were looking at our recently released mid-year adjustments. Can you believe I was actually happy that my district only had a 0.27% reduction? Still, that’s $111,000 and change, but given the projections, I was ready to make some small immediate cuts.
Tonight, I looked up the mid-year adjustments posted yesterday and added a couple of columns at the end of the OSDE spreadsheet. The first shows how much three percent would cost districts based on the mid-year adjustment figures. The second shows the combined impact of mid-year adjustments and the revenue failure – if it actually results in three percent cuts in state aid. Overall, eight districts are set to lose more than a million dollars in funding right now.
|District||Mid-year Adjustment||Revenue Failure at Three Percent||MYA plus Revenue Failure|
|TULSA||$ (1,918,675)||$ (2,757,041)||$ (4,675,716)|
|OKLAHOMA CITY||$ (1,286,610)||$ (3,211,787)||$ (4,498,397)|
|MOORE||$ (584,397)||$ (1,857,802)||$ (2,442,199)|
|EDMOND||$ (1,347,901)||$ (949,502)||$ (2,297,403)|
|PRYOR||$ (1,948,714)||$ (47,832)||$ (1,996,546)|
|ARDMORE||$ (1,343,274)||$ (198,540)||$ (1,541,814)|
|MID-DEL||$ (111,425)||$ (1,233,121)||$ (1,344,546)|
|LAWTON||$ 537,886||$ (1,566,827)||$ (1,028,941)|
Of these eight districts, Lawton was actually set to get an increase mid-year. Now – again, this is if the SDE has no way to cushion the blow – they have to find a way to absorb more than a million in cuts during the next six months.
As the Oklahoma Policy Institute points out, not all agencies are hit with the same percentage of cuts exactly. The three percent applies only to legislatively-appropriated funds. As with many agencies, the OSDE gets some funds off-the-top before the Legislature begins the appropriations process.
This year, of total state appropriations of $7.138 billion, just over three-quarters – 76.4 percent – came from current year General Revenue. The remaining $24.6 percent, or $1.681 billion, came from other funds, including the HB 1017(Education Reform) Fund, Constitutional Reserve Fund, the Cash Flow Reserve Fund, the State Transportation Fund, agency revolving funds and numerous other sources. In some case, the funding sources for specific agencies are set out in statutes; in others, the Legislature simply decides each session on the mix of funding streams.
Another $46.8 million lost in state aid? Someone’s going to have to adjust that bar chart showing how we lead the nation in cuts to education since 2008.
Announcing that the bottom had fallen out this week, Doerflinger described the revenue failure as an opportunity. Here’s where that comes in.
Looking at other funds available to us, I could quickly come up with about $440,000 in savings for my district in direct costs. That would be about a third of the deficit we are facing for the current school year. The problem is that they are funds that we can’t move into our general fund.
- Professional Development (PD)
- Reading Sufficiency Act (RSA)
- Achieving Classroom Excellence (ACE)
Right now, we have the perfect opportunity. We desperately need money. We know the ACE program doesn’t work. We know that RSA is a paperwork morass that does more harm than good to children. And while I appreciate good professional development as much as anyone, something tells me that right now, our teachers would love to have some of that taken off their plates. We just can’t afford nice things.
Call a special session for the first week in January. End ACE and RSA. Allow districts to move those balances to the general fund. It doesn’t plug the whole hole, but it’s something. And right now, I’ll take something.
Come on. Opportunity awaits.