After three straight years of budget cuts, funding for public education in Oklahoma is in dire straits.  This year’s appropriation to the Department of Education is $254 million, or 10.0 percent, less than it was in 2009.  In the past three years, funding to school districts through the state aid formula, which funds the basic operating costs of schools, has been slashed by $222 million, while public schools enrollment has grown by 22,000 students.  According to the most recent data, the number of teachers was cut by over 1,000 between 2010 and 2011, and this year it is likely there are fewer teachers still. Even though schools have tried to manage cuts while protecting class sizes, simple math dictates that more students and fewer teachers is leading to more kids per class.

Meanwhile, the Legislature has also cut the activities budget for common education, which funds health care costs for teachers and support staff, as well as a portion of retirement costs and programs that aim to improve teacher quality and student performance. This year,  the Department of Education was forced to eliminate or drastically cut a slew of programs, including adult education, alternative education, Great Expectations, A+ Schools, and Literacy First. With its activities budget slashed, the department also opted not to allocate $11.4 million to fund the $5,000 annual bonus promised to some 3,300 National Board Certified teachers and saved $37 million by funding only ten months of teacher and support staff health care benefits for current year contracts. Outrage in the education community over this failure to meet the state’s commitments on health care costs and board certified teachers led some elected officials to promise to make up the funding as mid-year supplementals to this year’s budget.

continue reading Stuck in a Hole: What flat funding means for the common education budget

Oklahoma’s fiscal situation presents an apparent paradox. We have now seen state tax collections rise for five consecutive quarters and exceed prior year collections by 10.5 percent. At the same time, the state budget is still being cut. This year’s budget of $6.511 billion is $255 million, or 3.8 percent, smaller than last year’s and $614 million, or 8.6 percent, less than FY ’09.  Budget cuts are continuing to affect all areas of state government, with agencies and school districts forced to reduce and eliminate programs, lay off staff, and curtail services to the public. Unfortunately, looking ahead to FY ’13, we should anticipate minimal restoration of the funding cuts that have been absorbed these past three years, even if the state’s economic recovery continues.

The explanation for the paradox of deeper cuts coinciding with growing revenue is two-fold. First, revenue growth associated with the economic recovery has been insufficient to return to pre-recession levels. General Revenue collections in FY ’11 remained 16.5 percent below FY ’08 and substantially below levels of five years ago. Just as significantly, the rebound in state tax collections has been unable to compensate fully for the loss of substantial non-recurring revenues that were used to limit cuts. In particular, the legislature used large amounts of federal stimulus funds and state rainy day funds to balance the budget in the first two years of the crisis. It also adopted various other ‘revenue enhancement measures’ to address the shortfall, including suspending or deferring payment of tax credits, issuing bonds, transferring cash and revolving fund balances, and raising fees.

continue reading Preliminary FY 2013 budget outlook shows continued challenges ahead

If Oklahoma is to have any chance of improving our students’ educational performance, we need to support excellence in our teachers and administrators. In recent years, Oklahoma has made such a commitment by investing in research-based professional development programs for teachers and school leaders. Unfortunately, three such successful programs – Literacy First, Great Expectations, and A+ Schools – have fallen victim to the  budget axe and are set to lose all state funding in the upcoming budget year.

The decision to eliminate funding for these programs must be viewed within the state Department of Education’s budget context. This year the Legislature cut appropriations to the Department of Education by $108 million, or 4.5 percent, compared to FY ’11. Within the total Common Education budget, the Legislature allocates a set amount for “the support of public school activities”, which encompasses the costs of the flexible benefit allowance for teachers and support staff, the teachers retirement credit, and all the educational programs that are funded outside the state aid formula. The FY ’12 allocation of $401.2 million is $18.7 million less than that of FY ’11 and $57.4 million, or 12.5 percent, less than FY ’10.  For the second straight year, the Legislature chose not to provide line-item allocations within the Activities Budget, leaving it in the hands of Superintendent Janet Barresi and the Board of Education to manage the shortfall.

continue reading The toll of budget cuts: Programs promoting high-quality teaching and schools under the axe

State Finance Director Preston Doerflinger yesterday announced that June General Revenue (GR) collections came in $78.1 million, or 15.7 percent, above last year and $66.2 million, or 13.0 percent, above the official certified estimate. The June collections brought to an end the 2011 fiscal year and confirmed the increasingly solid recovery of Oklahoma’s tax collections that has been apparent over the course of the year. As can be seen from the first chart, the final quarter of FY ’11 marked the second quarter in a row where revenues exceeded the prior year by over 12 percent and the fifth straight quarter of year-over-year quarterly revenue growth.

For the full year, General Revenue increased by $487.1 million, or 10.5 percent, from the depths of FY ’10. However, as we can see, revenue collections remain substantially below pre-downturn levels. This year’s GR came in 14.2 percent below FY ’08 and remains considerably below collections of five years ago, FY ’06.

continue reading Revenue collections finish strong year – but still face a steep upward climb

Every year during state budget discussions, state leaders speak about prioritizing spending to protect core services. That’s especially true when times are bad and the overall budget pie is shrinking. However, the distribution of that pie among agencies over the past decade has remained relatively unchanged (with a couple notable exceptions).

A series of visualizations created with the online tool Many Eyes illustrates this fact well. The graphs are derived from data compiled by OK Policy on the percentage of total state appropriations received by the ten largest agencies, plus another category for all other agencies, from FY ’00 to FY’12.

Click on any of the images below to see a larger, interactive version.

continue reading Visualizing where the money goes

The Oklahoma Department of Human Services this week approved changes to the state’s child care subsidy program that  will increase hardships for struggling low-income working families, threaten access to quality child care, and harm child care providers who serve low-income children. [UPDATE: In late July, the Commission decided to defer a vote on these changes until November]

DHS’ actions were precipitated by budget shortfalls for the upcoming year exceeding $30 million. The Legislature reduced state appropriations to DHS  for FY ’12 by a modest $6.0 million, or 1.1 percent, compared to FY ’11. However, the agency also faces the loss of one-time funding in this year’s budget, expected increases in program utilization, and higher employee benefit costs. To balance its budget, DHS proposed a series of  measures, which included voluntary buyouts of 231 positions, mostly within its field operations division for children and family services, and cuts in contracts for various social services.

continue reading Child care cuts deal a blow to low-income working families and kids

This week, State Finance Director Preston Doerflinger announced General Revenue (GR) collections for May.  For the month, GR was $36 million, or 9.5 percent, above May 2010 and $25.4 million, or 6.5 percent, above the certified estimate. May collections would have been even higher but for the Legislature’s decision to allocate $21.4 million in oil revenues as supplemental funds for common and higher education. For the eleven months of FY ’11, revenues are $409.1 million, or 9.9 percent, above last year and $153.2 million, or 3.5 percent, above the certified estimate. In this blog post, we go a little deeper into the numbers with a series of brief observations and charts.

• May marks the 13th straight month that revenues showed improvement compared to the same month for the prior year. In each of the last seven months, revenues have come in at least 9 percent higher than the prior year.

• 

  continue reading Quick Take: Revenues rebounding but still way down from pre-downturn levels

With the 2011 legislative session now wrapped up, we are pleased to release our FY ’12 Budget Highlights, a one-page summary analysis of the budget for the upcoming year, along with eight detailed charts and tables on revenues and appropriations.

A couple of the notable charts are excerpted below.

The state’s annual appropriated budget for FY ’12 is $6.511 billion. This is the third straight year of decreased funding for state agencies; total appropriations for next year will be $250 million less than in FY ’07.

continue reading Hot off the Presses: Our FY '12 budget highlights

The budget deal is done, and nearly every state agency is receiving another round of funding reductions. That leaves an important question: what programs will be cut to make up the loss? How cuts are distributed will have a huge effect on state services, but the Legislature seems to be abandoning its responsibility to make these hard decisions.

In previous years, the Legislature would approve budget limit bills directing agencies on how to spend state dollars. Although each agency’s budget bills looked a little different, sections typically included:

That changed last year, when leadership chose not to run budget limit bills for most agencies. This year there are less than a handful.

continue reading Don't blame us: Legislature passes the buck while passing the bucks

In The Know is a daily synopsis of Oklahoma policy-related news and blogs.  Inclusion of a story does not necessarily mean endorsement by the Oklahoma Policy Institute. E-mail your suggestions for In The Know items to gperry@okpolicy.org. You can sign up here to receive In The Know by e-mail.

State Treasurer Ken Miller criticized Gov. Fallin and legislative leadership for crafting a disappointing business-as-usual budget agreement.  Public colleges and universities facing higher enrollment will have to raise tuition rates and shrink staff after $44 million in budget cuts during the past two years.  Citizens and lawmakers rallied against the scheduled closure of seven parks across the state.  The Oklahoma House passed a bill requiring DHS to make a plan to close two facilities that care for 250 severely disable residents.

On Wednesday the Senate reconsidered and approved a $70M transportation bond issue that was central to the state’s FY ’12 budget agreement.  Legislative leaders announced the creation of a special joint committee that will hold public meetings on federal health-care reform during the interim.  The Oklahoman has an editorial criticizing policymakers for including schools in an ongoing political battle over gun rights.

A bill to abolish the Indian Affairs Commission passed the House Wednesday and a $40 million bond issue to finish the American Indian Cultural Center and Museum is dead for the year.  The Norman City Council discussed how to spend the surplus revenue raised by a half-cent sales tax increase.  The governor signed a bill putting the Oklahoma Human Rights Commission under the auspices of the attorney general’s office.

In today’s Policy Note, the Institute for Women’s Policy Research examines the changes to employment policies and practices mandated as part of sex and race employment discrimination litigation.

Read on for more.

continue reading In The Know: May 19, 2011