OKPOLICY.ORG
Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1991. He currently practices law in Tulsa and represents clients at the Capitol.
An idea has surfaced again recently that, since the state will not or cannot properly fund public education, local school districts should be allowed to go it alone and fix their own finances, perhaps somehow with the help of cities or counties. This is not an original idea. Since I’ve been observing or participating in civic life for the past several decades, this same idea, born of frustration, comes and goes. People care about their local schools because they care about their kids. Not only that, communities depend on the quality of their schools to attract new businesses and the new residents who are employed by them. So, when their local schools suffer, people want to solve the problem. Completely understandable.
But the idea of raising taxes locally and keeping all of it locally for operating our own school districts, without regard for the rest of the state, is a bad idea. It will quickly lead to school funding inequities throughout the state. The unit of government that courts look to for equitable school funding is the state. At a point, it is unconstitutional for kids in Muldrow or McAlester to get an education funded at an impermissibly lower level than kids who live in Tulsa. Oklahoma owes its children not only funding adequacy, but funding equity. With the current sorry state of school funding, it won’t take long to find ourselves in court.
The argument is made that local folks, if they want to tax themselves for their own schools, should be allowed to without the school funding formula deducting state money to partially equalize for the increased funding. The argument sounds good but ignores economic realities. Most local school funding comes from property taxes. Tulsa, for example, is filled with tall office buildings, factories, equipment and businesses that serve areas well beyond the boundaries of Tulsa Public Schools.
The people who work in these buildings housing regional, statewide or even international businesses often live outside where they work in communities that don’t have an abundance of these buildings, factories and equipment. A very small increase in Tulsa property taxes could generate a large return while residents of these smaller communities could burden themselves with unbearable property taxes without producing much revenue at all. That’s why the state funding formula equalizes state funding, and that’s why the theory that we should just all keep our own property tax money won’t work.
People who live in Tulsa, Oklahoma City or other property rich communities who want to promote this idea have a much better solution already. They should pay attention at election time or in their political party selection processes and elect people to go to the state Capitol who will both properly fund and equitably distribute education dollars for all Oklahoma kids. The school funding formula hasn’t been seriously adjusted since HB 1017 in 1990. Perhaps it needs to be adjusted.
The present formula works quite well when it is funded properly from the state side. Local property taxes have been increasing and the state dedicated funds have been pretty much holding their own. However, the state side of the equation is what has been lacking. The formula works quite well when about 60% comes from the state appropriations. But, this has not been happening.
When this message of the effect of local funding on equity is brought to the attention of people from the City of Tulsa and the editor of the Tulsa World, they don’t seem to care about the people in the rest of the state or the effects it will have on Tulsa when those people from the rural areas will come to metropolitan areas such as Tulsa.
This is a state issue, not a local issue. They want to return to colonial days when it was up to the local people to fund schools. But, our state constitution requires the state legislature to fund free public schools. It is not a city obligation and it limits what a local school can do. The pressure should be put on the legislature to do what they are obligated to do – a not a mayor or anyone else. Tulsa has its own issues of funding the City of Tulsa – they don’t need to take on extra obligations. Just do your job as a mayor and take care of Tulsa. Besides, I do not trust the city to not divert these moneys for city obligations if they were able to get their hands on this extra money. Again – the pressure needs to be put on the legislature, not a local political entity.
The school funding formula definitely needs a major overhaul after 28 years (1990) of no significant changes. Whatever group that is formed to make these changes needs to spend significant amount of time on reviewing Texas school funding formula for solutions on how best to increase education funding.
Property taxes in Texas are 2 1/2 times as much as in Oklahoma. These property taxes are the reason so many TX schools can offer teachers starting salaries of $50,000+.
Oklahoma school districts need to be allowed to increase property taxes and instead of a $1 for $1 reduction in state funding… a $1 decrease in state funding for every $2.50 or $3 increase in property taxes would still provide incentive for local school districts to raise property taxes to increase teacher pay.
Also, state legislature needs to allow OK cities to levy a property tax to fund their operations like TX and many other states do. OK cities levy sales tax of 5+% for operations and significant portion of OK cities are overcharging their residents on water/sewer to use excess revenue for operations. Cities might be able to reduce their sales tax rate if they could levy property tax for operations.
Plight of Municipal Finance in OK
https://cmao-ok.org/DocumentCenter/Home/View/9
In Texas, State gets 6.25% vs OK gets 4.5%. So, TX has more sales tax revenue for state funding of education.