What’s up this week at Oklahoma Policy Institute? The Weekly Wonk shares our most recent publications and other resources to help you stay informed about Oklahoma. Numbers of the Day and Policy Notes are from our daily news briefing, In The Know. Click here to subscribe to In The Know.
This week’s edition of The Weekly Wonk was published with contributions from Communications Intern Lilly Strom.
This Week from OK Policy
We have better options than a costly and poorly targeted income tax cut: Now that the state’s economy and budget outlook are improving, lawmakers are considering a substantial state tax cut. House Bill 2041 — by House Speaker Charles McCall, R-Atoka, and others, and Sen. Julie Daniels, R-Bartlesville — would reduce the state’s individual income tax starting in tax year 2022 (for returns due in April 2023). While this bill provides long-needed refunds to some low-income taxpayers, more than half of tax cuts would go to higher income Oklahomans who can afford to pay the current rate. Along with HB 2083, which would eliminate the state corporate income tax, state revenue could be reduced by 7.5 percent. This would shrink our economy and speed up the reduction of public services that has continued throughout this century. [Paul Shinn / OK Policy]
Policy Matters: Asking better questions: Our governor gets razzed in some circles for his Top 10 state rallying cry, especially because many of the yardsticks are not nationally comparable or are not particularly relevant to everyday Oklahomans. While I have been known to occasionally poke fun at this Top 10 obsession, I acknowledge the value of establishing lofty aspirations regarding what our state can achieve. However, I am not sure we’re asking the right questions about Oklahoma’s aspirations, and I’m positive that everyday Oklahomans have not been fully engaged in that process. [Ahniwake Rose / Journal Record]
How HB 1888 came back from the dead this session (Capitol Update): No idea introduced into the legislative process is ever truly dead until the legislature has adjourned Sine Die. Living proof exists this year in House Bill 1888 by Rep. Danny Williams, R-Seminole, and Sen. David Bullard, R-Durant. HB 1888 says that “no public body shall conduct any form of gender or sexual diversity training or counseling.” Public body is expansively defined to include everything from a department of state or local government to a study group supported by public funds. Absent in the bill, however, is any definition of “gender or sexual diversity training or counseling.” [Steve Lewis / Capitol Update]
Weekly What’s That
General Revenue Fund
The General Revenue (GR) Fund, also known as the general fund, is the principal funding source for most Oklahoma government operations. Any revenue that is not restricted for a specific purpose flows into the general fund. The Legislature may direct money out of this fund for any legal purpose of the government.
Total General Revenue collections in FY 2020 were $6.273 billion, which was $586 million less than in FY 2019. The biggest contributors to the General Revenue Fund were the individual income tax ($2.750 billion, 44 percent) and sales tax ($2.020 billion, 32 percent). Dozens of smaller taxes and fees made up the rest.
The Legislature can budget up to 95 percent of the estimated General Revenue for the coming year (see Revenue Estimates). For Fiscal Year 2021, 71 percent of the money budgeted by the Legislature comes from General Revenue.
Quote of the Week
“If our solution to a bad zip code is to tell kids they can go to a different zip code, we’re not fixing the bad zip code. And not every kid is going to be able to get out of that district.”
-Rep. Forrest Bennett, D-Oklahoma City, speaking about inequities among the state’s school districts [The Frontier]
Editorial of the Week
HB 2078 should send up red flags
If Sen. Dewayne Pemberton says a measure is going to be bad for public schools, we believe him.
Pemberton, a Republican from Muskogee who represents much of Cherokee County, takes issue with House Bill 2078, which alters the state funding formula by basing per-pupil monies on the most recent enrollment data. The legislation, signed last week by Gov. Kevin Stitt, will do away with current law, which derives the initial allocation of dollars to school districts on the higher of the two previous years’ average daily student count.
That change, Pemberton says, could strip rural schools of funding. He’s a former educator, so he knows about such things. And State Rep. Bob Ed Culver and Sen. Blake Cowboy Stephens agree with him. These three gentlemen are no liberal fuss-budgets; their conservative credentials aren’t in question. So their concerns with the Stitt-touted measure ought to send up red flags.
When new law goes into effect in 2022, allocations will be based on only the previous year, and the mid-year adjustment will now be factored into the previous year’s count. A companion measure, Senate Bill 783, allows students to transfer to another district at any time, if the school has space.
School choice has long been championed by those who would prefer to home-school or send their children to private institutions, which is their prerogative. In recent years, suggestions have been floated that would give these parents state money to do with as they see fit. But there’s a fly in the ointment: Oklahoma’s constitution guarantees every child a free education. What happens when the money is siphoned off from public school coffers – or at least, out of rural districts – and many parents can’t afford to transport their kids to bigger schools, or pay the difference for a private education? And not every parent is cut out to home-school.
State Superintendent Joy Hofmeister, another Republican, said the measures marked one step forward and two steps back for public education: “Children in rural Oklahoma deserve to have a high-quality education and HB 2078 potentially jeopardizes that. This bill removes financial safeguards meant to protect all students from the impact of abrupt changes in the local economy.”
To the extent that anyone could have, Pemberton has a crystal ball on this issue. He knows both rural and inner-city schools will suffer, at the expense of the more well-heeled districts where the equally well-heeled want to send their kids. And as he said, the bill will lead to inequity: “Right now, the rural schools in the state of Oklahoma are declining in population, because most of the small rural districts are getting older and a lot of the younger people are leaving and going to bigger areas for employment. All the school districts in my district, except for one, are being negatively affected by this law.”
It might be difficult to find a superintendent in this county who disagrees with him. Although funding through the CARES Act and other monies being pushed to schools by the federal government could help rural schools with declining enrollments delay some tough decisions, that won’t always be available. And ultimately, the change in formula could force rural schools to cut programs or lay off staff.
Pemberton implied legislators could return to session next year and reverse course on this measure. But, he added: “As long as the governor has his mind set, he’ll veto that.” If that’s the case, Cherokee County voters should consider sending Stitt packing. Nothing is more important than the education of our children.
Numbers of the Day
- $531 million – Amount of state revenue increases approved by lawmakers in 2018 to support education. Two measures now being considered by Oklahoma lawmakers (HB 2041 and HB 2083) would cut revenue by $540 million, which is $9 million more than the new revenue raised by lawmakers in 2018. [Source: OK Policy]
- $9,399 – Oklahoma’s per pupil spending, the lowest among its six neighboring states. [Source: Oklahoma State School Boards Association]
- 81,739 – Number of students enrolled in Oklahoma’s charter schools, which represents 11.7% of Oklahoma’s school children. [Source: Oklahoma Department of Education]
- 451,749 – Number of Oklahoma students enrolled in Title I schools, which are schools that receive federal funding to support economically disadvantaged students. This represents about two-thirds of all Oklahoma students. [Source: KIDS COUNT Data Center]
- 29 -Number of charter schools in Oklahoma [Oklahoma Public Charter School Association]
What We’re Reading
- From the Archive: Nation’s Least-Funded Schools Get What They Pay For [Governing] NOTE: As Oklahoma lawmakers are considering revenue cuts (HB 2041 and HB 2083) that would undo 2018’s new revenue supporting education, we’re revisiting this piece from Governing about the impacts from Oklahoma’s underfunded schools.
- A Windfall, Teacher Shortages, and Uncertain Enrollments Shape Next Year’s K-12 Budgets [Education Week]
- A look at whether charter schools are fiscal threats to local school districts [The Washington Post]
- COVID-19 Aid Package Protects Funding for Students in Poverty, But Could Challenge Schools [Education Week]
- Chartered for Profit: The Hidden World of Charter Schools Operated for Financial Gain [Network for Public Education]