Across core services, Oklahoma underspends (Guest post: State Treasurer Ken Miller)

Ken Miller, Ph.D., is the State Treasurer of Oklahoma. A Republican, Miller was first elected to a four-year term in 2010 and was unopposed for re-election in 2014. Miller earned his Ph.D. in economics from the University of Oklahoma, an M.B.A. from Pepperdine University and a bachelor’s degree in economics and finance from Lipscomb University. His fields of specialization are applied public economics and public finance effects on economic growth. This article originally appeared in Treasurer Miller’s Oklahoma Economic Report.

State government has four core responsibilities – education, health care, public safety and transportation. It is those fundamental services on which the people depend to have productive lives. For businesses, those services done right provide an environment in which they can thrive.

Analysis of data released this month by the U.S. Census Bureau, along with the most-recent data from the Bureau of Economic Analysis, Federal Highway Administration, and the Centers for Medicare and Medicaid Services, shows that, even when adjusted for Oklahoma’s relatively low cost of living, funding for core services still lags the region and the nation.

No one will argue that funding alone ensures success, but comparing Oklahoma’s spending to the rest of the states provides a relative measure of where we stand.

Common education funding

Adjusted for price parity, or cost of living differentials between the states, Oklahoma spends less per pupil than 44 other states and the District of Columbia. At $8,689, Oklahoma’s per pupil common education spending is 14.5 percent less than the $10,163 average of its six border states. State school spending is 21 percent below the $11,009 national per pupil average.

Health care safety net

In addition to data showing Oklahoma’s relatively low ranking in numerous measures of public health, including smoking rates, obesity and the number of people with health insurance, the state ranks low in spending per Medicaid enrollee.

Oklahoma ranks 41st in price parity-adjusted spending per Medicaid patient.

In this category, after adjusting for costof-living differences, Oklahoma spends less than the six border states’ average and the national average. The state’s $5,307 average spent per Medicaid enrollee is 14 percent below the border states and 8.3 percent below the national average.

Transportation

For the past several years, Oklahoma policymakers have made a concerted effort to boost transportation funding. Progress has been made, as deficient bridges have been repaired and significant highway construction has been undertaken, but compared to the rest of the nation, Oklahoma’s ranking still trails most states.

Only 10 states spend less per lane mile on transportation than Oklahoma, after accounting for price parity.

The state’s adjusted spending of $11,250 per lane mile is 39 percent below the national average, but less than one-half of one percent below the average of Oklahoma’s six border states.

Police and corrections

At first glance, Oklahoma’s relative ranking in per capita spending on police and corrections might appear to be positive news. The state ranks 25th in the nation and ahead of four of its border states in cost-of-living adjusted spending on this category.

But when one considers Oklahoma’s high incarceration rate and the reported status of state correctional operations, the ranking seems less impressive.

Oklahoma’s $511 cost-of-living adjusted per capita spending on police and corrections is 7.8 percent less than the national average and 2.9 percent less than the average of the border states.

Poor state?

While some might argue Oklahoma’s low ranking in core service funding is because “we’re a poor state,” the latest figures on per capita personal income (PCPI), not even adjusted for cost of living, say otherwise.

Oklahoma incomes have improved in recent years, ranking 30th in the nation in the third quarter of last year. State PCPI lags the national average by 8.8 percent, and is higher than the average of its border states by 0.5 percent.

Relative comparison

The data used for the core funding comparisons, while the most recent available, are from FY-14 for education, transportation and public safety. The Medicaid numbers date to FY-11.

Compared to an analysis conducted last year, with numbers from FY-13 and FY-10, the updated figures show only minor changes from state to state and no significant change in Oklahoma’s rankings.

Even though the figures used are a few years old, there is little reason to believe the relative status of Oklahoma’s funding of core services has improved appreciably. If anything, the relative position has worsened due to multi-year budget cuts.

We can do better

The people and businesses of Oklahoma deserve quality education, affordable health care, safe neighborhoods and good roads. Investing more money in those services doesn’t guarantee they’ll yield the desired results, but it helps if spending is adequate. It takes more than just dollars to ensure success, but sufficient spending would be a good start.

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