Education vies for funding down the road

school-children-roadHow do you boost support for education in a year when the state faces a massive budget shortfall? Several bills to provide teacher pay raises have gained initial committee approval, but these bills are unlikely to make it into law given the grim budget situation. The best chance for success for education advocates seems to be a proposal by House Speaker Pro Tem Lee Denney (R-Cushing) that provides a multi-year $600 million increase in education funding, but not for another three years. Yet even this proposal is far from a sure thing.

HB 1682 creates the Securing Education Excellence Fund. The bill is designed to increase funding for common education by $59.7 million annually beginning in fiscal year 2019. The funding increase would come from income tax revenue that is take off-the-top before legislators appropriate budgets for other state services.

After the Fund receives its initial $59.7 million deposit, the next deposit will be made only if revenues for the next year are projected to grow by at least 1 percent; there will then be annual $59.7 million increases until the Fund reaches a $600 million cap. Each time the Fund grows by $120 million, the annual school year will be increased by one instructional day, so that by the time the Fund reaches its $600 million cap, there will be an additional five instructional days.

ROADS06-18HB 1682 is modeled closely on the ROADS (Rebuilding Oklahoma Access and Driver Safety) Fund, which allocates tax revenues for the maintenance and repair of state highways and bridges. Currently, the ROADS Fund receives a guaranteed annual increase of $59.7 million each year from income tax revenues before any other funds are allocated. This year the ROADS Fund is at $416.8 million; it will increase to $476.5 million in FY 2016 and by an additional $57.9 million until it reaches its statutory cap of $575 million in FY 2018.

By deferring deposits to the Securing Education Excellence Fund until the ROADS Fund reaches its cap, HB 1682 addresses a primary concern with a similar proposal authored last year by Rep. Denney. Last year’s bill,  HB 2642, which would have diverted half the annual increase for ROADS to education, generated heated opposition from transportation interests. HB 2642 was amended in the Senate but ultimately died in conference committee.

Even if this year’s proposal averts a head-on collision with supporters of roads and bridges, it still faces an uphill climb. Even before the recent drop in revenues associated with falling oil prices, chronic funding shortfalls had led to growing concern over the increased share of state tax revenues that are allocated “off-the-top” to various dedicated purposes, rather than deposited to the General Revenue fund for appropriation by the Legislature.

Gov. Fallin called attention to this issue in both her Executive Budget and State of the State address, where she said:

We all know Oklahoma currently faces substantial budget challenges.
This is not because of a stagnant economy or declining tax receipts.
Rather, it is because the General Revenue Fund – the primary source of discretionary spending set by the Legislature each year – is growing smaller.
It is shrinking, both in dollars and as a percentage of overall collections, due to the increasing cost of mandatory off-the-top apportionments.

The Governor included a chart showing that the General Revenue Fund received just 46.2 percent of total gross state collections in FY 2014 compared to 55.8 percent in FY 2016.

As we’ve discussed, there are other contributors to the declining share of revenue going to GR, including growing tax refunds and tax rebates, but off-the-top apportionments certainly play a role. Even among those at the Capitol genuinely favorable to increased education funding, there will be strong reluctance to add a $600 million commitment to new off-the-top funding. Yet education advocates can make a strong case that if the legislature is willing to prioritize transportation funding, as well as higher education scholarships, Medicaid programs, and other areas that have been allotted dedicated tax revenues, it’s about time that education again receive similar preference.

While targeting off-the-top spending is a worthwhile aspect of budget reform, the larger problem is that state revenues are not growing at a pace that keeps up with the increased cost of providing core government services. Unless we begin to address the growing fiscal gap caused by numerous tax cuts, tax breaks, and a narrowing tax base, all core areas of government will continue to wrestle over pieces of a shrinking pie.  

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Former Executive Director David Blatt joined OK Policy in 2008 and served as its Executive Director from 2010 to 2019. He previously served as Director of Public Policy for Community Action Project of Tulsa County and as a budget analyst for the Oklahoma State Senate. He has a Ph.D. in political science from Cornell University and a B.A. from the University of Alberta. David has been selected as Political Scientist of the Year by the Oklahoma Political Science Association, Local Social Justice Champion by the Dan Allen Center for Social Justice, and Public Citizen of the Year by the National Association of Social Workers.

2 thoughts on “Education vies for funding down the road

  1. We simply must stop having our government oversee our daily life functions. We cannot afford this kind of government involvement. It’s a monster that has grown out of control. We hand over dollar after dollar after dollar to state and federal governments and what we’re offered in return is pathetic. No offense intended as I’m confident many of our officials think they are trying to help. It’s coming to the point where we really don’t even manage our own lives or families. We are continually answering to some overseer about every single thing we do. This was never how our country was intended to function. We have plenty of money to manage what government was actually intended to oversee. Though the transition would certainly be difficult, the best thing we can do for our future generations is to begin to remove government management from their daily lives.At this rate, imagine what it’s going to look like for them.

  2. why would one tax services? This places a higher tax burden on low income families for needed services…such as car repair for our crappy roads.
    So you would defer road repair/reconstruction of dangerous roads and bridges to other areas of need. That solves nothing. The state needs to stop unnecessary frivolous law suits (let’s start with the ten commandments monument and go on to obstructing women’s rights) We cannot rely on income from sales tax. The state needs to stop giving businesses tax breaks…we all know companies use these then relocate where other tax breaks are more lucrative. We need to diversify our industries… come on, you can do better

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