Perspective - March 2007 by OCPA

March 2007 â&#x20AC;˘ Volume 14 Number 3

Perspective For the Children? Governor Henryâ&#x20AC;&#x2122;s pre-K plan hurts children and expands government. Speaker Cargill has a better idea.

Perspective

Minimum Wage and Common Sense By Gerald Zandstra

March 2007

Vol. 14, No. 3

Brandon Dutcher .................................. Editor Perspective is published monthly by the Oklahoma Council of Public Affairs, Inc., an independent public policy organization. OCPA formulates and promotes public policy research and analysis consistent with the principles of free enterprise and limited government. The views expressed in Perspective do not necessarily reflect the views of the Oklahoma Council of Public Affairs, Inc.

OCPA Board of Trustees Blake Arnold

Henry F. Kane

Oklahoma City

Bartlesville

Mary Lou Avery

Robert Kane

Oklahoma City

Tulsa

Lee J. Baxter

Tom H. McCasland, III

Lawton

Duncan

Steve W. Beebe

David McLaughlin

Duncan

Enid

G.T. Blankenship

Lew Meibergen

Oklahoma City

Enid

John A. Brock

Ronald L. Mercer

Tulsa

Bethany

David R. Brown, M.D.

Lloyd Noble, II

Oklahoma City

Tulsa

Aaron Burleson

Robert E. Patterson

Altus

Tulsa

Paul A. Cox

Russell M. Perry

Oklahoma City

Edmond

William Flanagan

Patrick Rooney

Claremore

Oklahoma City

Josephine Freede

Melissa Sandefer

Oklahoma City

Norman

Kent Frizzell

Richard Sias

Claremore

Oklahoma City

John T. Hanes

John Snodgrass

Oklahoma City

Ardmore

Ralph Harvey

Lew Ward

Oklahoma City

Enid

John A. Henry, III

Gary W. Wilson, M.D.

Oklahoma City

Edmond

Paul H. Hitch

Daryl Woodard

Guymon

Tulsa

Daniel J. Zaloudek Tulsa

OCPA Adjunct Scholars Will Clark, Ph.D.

Ronald L. Moomaw, Ph.D.

University of Oklahoma

Oklahoma State University

David Deming, Ph.D.

Ann Nalley, Ph.D.

University of Oklahoma

Cameron University

Bobbie L. Foote, Ph.D.

Bruce Newman, Ph.D.

University of Oklahoma (Ret.)

Western Oklahoma State College

E. Scott Henley, Ph.D., J.D.

Stafford North, Ph.D.

Oklahoma City University

Oklahoma Christian University

James E. Hibdon, Ph.D.

Rex J. Pjesky, Ph.D.

University of Oklahoma (Ret.)

Northeastern State University

Russell W. Jones, Ph.D.

Paul A. Rahe, Ph.D.

University of Central Oklahoma

University of Tulsa

Andrew W. Lester, J.D.

Michael Scaperlanda, J.D.

Oklahoma City University (Adjunct)

University of Oklahoma

David L. May, Ph.D.

Andrew C. Spiropoulos, J.D.

Oklahoma City University

OCPA Fellows Steven J. Anderson, CPA Research Fellow

J. Rufus Fears, Ph.D. Dr. David and Ann Brown Distinguished Fellow for Freedom Enhancement

OCPA Legal Counsel DeBee Gilchrist ★ Oklahoma City

OCPA Staff Brett A. Magbee / VP for Operations Brandon Dutcher / VP for Policy Margaret Ann Hoenig / Director of Development Brian Hobbs / Director of Marketing and Public Affairs Mary Ferguson / Executive Assistant and Event Coordinator 1401 N. Lincoln Boulevard Oklahoma City, OK 73104 (405) 602-1667 ★ FAX: (405) 602-1238 www.ocpathink.org ★ ocpa@ocpathink.org

hat are we to make of the To make this assumption borders case for increasing the on racism, classism, or gender minimum wage? It is important to bias, depending on which people begin with a few basic moral you assign to it. distinctions. First of all, ChristianLow-paying jobs, for the vast ity has always professed that majority of people, are entry-level human beings have dignity and jobs. They are where we begin, not worth because they are created in where we end. Raising the minithe image of God. All human mum wage discourages employers beings, regardless of gender, from hiring more people and, in race, creed, or ability, are deservmany instances, removes the entry ing of respect and justice. point of the job market, which Second, human beings possess harms the very people those creativity. Our needs are met and backing the increase seek to help. our humanity is most realized The second assumption is that when we can there will be no apply our economic effect. Hiking the minimum intellect and But this simply creativity to the isn’t the case. wage leads to negative nature of When the consequences that are things. And it is government equal to – or sometimes a biblical puts in place a worse than – the principle that certain public human beings policy, there is problem that the wage be rewarded always some hike seeks to remedy. justly for their response that work. Indeed, comes from the we are called to be productive so marketplace. For instance, increasthat we can possess wealth to use ing the entrance fee to a public in God’s service. park by five percent might lead us The ultimate goal of the effort to to conclude that the park would increase the minimum wage is take in five percent more income certainly a laudable one. The than it did last year. But, in fact, problem arises in the efficacy of this is not necessarily the case the proposed solution and some of because increasing the cost may the assumptions that it makes. cause 10 percent fewer people to The first assumption is that the visit the park, resulting instead in a group most often referred to as the net reduction in revenue. “working poor” is a static group – The problem with the minimumthe same people over a long wage solution is that it leads to period of time. Increasing the negative consequences that are minimum wage would increase equal to – or sometimes worse their income, which seems like a than – the problem that the policy good thing. sought to remedy. But is this a sound assumption? Legislators ought to think long I would guess that the vast majorand hard before they lead with ity of the people reading these their hearts and ignore what their words have, at some time and heads ought to be telling them. ✪ maybe for a period of time, Rev. Gerald Zandstra, an ordained worked a minimum-wage job. The pastor in the Christian Reformed minimum wage does not encomChurch in North America, is a senior fellow at the Acton Institute. pass a particular class of people.

Cover art: Chuck Asay, The Gazette (Colorado Springs)

with Special Guest Speaker Dr. Larry P. Arnn, president of Hillsdale College in Michigan. Dr. Arnn is a distinguished scholar, author, and respected conservative leader. Imprimis, Hillsdale’s national speech digest, is currently read by more than a million people.

National Cowboy and Western Heritage Museum 6:00 p.m. • Reception 7:00 p.m. • Dinner 8:00 p.m. • Program

Wednesday, March 21, 2007 Watch the mail for your invitation or call 405-602-1667 to make your reservations today. Individual and table seating are available.

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Suffer the Little Children In his effort to expand non-parental child care, Gov. Henry is citing the available research on the subject quite selectively. By promoting surrogate parenting for three-year-olds while disregarding the research exposing its risks, Henry and his allies are doing the children no favors.

By Bryce Christensen

even a very favorable Michigan study of the much-lauded Head Start preschool program concludes with an admission that the authors were “unable to provide evidence of the program’s efficacy for nonblack children.” Of course, concerned policymakers will want to do what they can do to help desperately needy children, black and non-black. But policymakers are misleading their constituents when they justify yet more non-parental child care for the general population on the basis of research that simply does not apply to them. Worse, policymakers are actually hurting children when they expand funding for nonparental child care while disregarding research exposing the risks of such care. Anyone who is truly attentive to “all the research” on child care will take note of studies showing that young children in non-parental care are distinctively vulnerable to epidemic jaundice, childhood meningitis, giardiasis, otitis media, hepatitis A, and various other diseases. Anyone willing to learn from “all the research” will also pay close attention to an exhaustive study by the National Institute of Child Health and Human Development showing that putting young children in day care makes them more aggressive and belligerent – even when that day care is of high quality. Those willing to investigate “all the research” on child care will also want to attend to a 1994 study concluding that maternal employment – regardless of the mother’s occupation – translates into a reduced likelihood that children will graduate from high school or ©Cartoonbank.com

klahoma’s three-year-olds to some long-term educational may be too young to debate benefits. In particular, some public policy. But perhaps more studies do indicate that preschool than anyone else, they feel the programs can reduce a child’s effects of the surest of all publiclater need for special education, policy principles: You get more of can lower the risk that a child will what you subsidize, and less of repeat a grade, and can reduce what you tax. the likelihood that a child will drop For some time now, Oklahoma out of school before completing policymakers have been subsidizhigh school. ing – even completely paying for – Somehow, though, advocates of non-parental child care, choosing more public spending on preto fund these child-care subsidies school programs never get around by taking tax money from families to acknowledging studies showing who have made financial sacrithat virtually all of the cognitive fices to keep one parent at home benefits of such programs wash with their young children. This subsidize-and-tax strategy continues to find advocates despite clear evidence that it is parental care that best serves almost all young children. Oklahomans would never know about the virtues of parental child care by listening to Democrat Governor Brad Henry, who actually boasts of the state’s status as a “national leader” with 70 percent of all four-yearolds in state-sponsored developmental programs. He now aims to spend an additional $15 million to expand such programs by starting to enroll threeyear-olds. “All of the research,” Gov. Henry ex“Bye bye, sweetie. Daddy and I will pick plains, “tells us that the you up when you’re eighteen.” early years are critical to a child’s future success.” The governor is right: a child’s out by the time participants reach early years are critical. However, third or fourth grade. despite his implicit claim that he is What is even more telling, when drawing on “all the research” in these advocates of enlarged drafting his child-care policy, the preschool programs push to get governor and his child-care allies more and more young children are actually reading the available involved, they ignore the overresearch quite selectively. whelming body of evidence True, those wanting to spend yet indicating that these programs are more state money for non-parental of benefit only to children from care can point to studies linking impoverished and severely disadhigh-quality preschool instruction vantaged households. Indeed,

college. Likewise deserving attention is a 1996 study concluding that “the more hours a mother works, the lower [her] children’s grades and the poorer their work habits.” The suspicion grows that Gov. Henry and others pushing for more public spending on non-parental child care actually do not want to look at “all the research.” They are interested only in research that fits their political agenda. How else can Oklahomans explain a willingness to subsidize non-parental child care with tax money collected from households with a stay-athome parent? A Better Way Fortunately, one prominent Oklahoma lawmaker – none other than Lance Cargill, the Speaker of the Oklahoma House of Representatives – does seem disposed to craft child-care policy that takes

into account “all the research.” His approach to child care reflects real understanding of the potentially harmful effects of paying subsidies for non-parental child care out of taxes collected from families caring for their own children. Speaker Cargill has introduced a measure (HB 1295) that would allow households with a stay-at-home mom (or dad) to claim tax credits equivalent to those now claimed by Oklahoma parents who put their children in daycare. The Speaker’s explanation of his initiative is compelling: “I’m a firm believer in parents being able to stay home with their children. It’s something we should be encouraging in Oklahoma, not discouraging through unfair tax policies. Stay-at-home moms should not be excluded from being able to get tax credits similar to

parents who put their children in daycare. This is an issue of basic fairness.” Oklahoma’s babies and toddlers may be too young to join in the debate over this issue, but no one has more at stake. It is past time to end subsidize-and-tax policies that push young children out of the loving care of a parent and into the bureaucratic care of a stranger. ✪ Bryce Christensen (Ph.D., Marquette University) is an assistant professor of English composition at Southern Utah University. He is the author of Utopia Against the Family (Ignatius, 1990) and editor of several other volumes, including Day Care: Child Psychology and Adult Economics. His latest book is Divided We Fall: Family Discord and the Fracturing of America (Transaction, 2005). His article “Early Childhood Education in Oklahoma: Cui Bono?” appeared in the September 2004 issue of Perspective.

Nanny-State Expansion Dies in Senate; Henry Vows to Fight On Gov. Brad Henry’s plan to create a prekindergarten program for three-year-olds died February 21 in the Senate Appropriations Committee. The legislation, Senate Bill 518, failed to advance on an 8-to-8 vote. State treasurer Scott Meacham, for whom the job is apparently not a full-time one, took time out of his schedule to argue in favor of Henry’s plan for further government involvement in the lives of toddlers. Also in favor of the measure were Democrat senators Johnnie Crutchfield, Tom Adelson, Randy Bass, Kenneth Corn, Mary Easley, Charlie Laster, Susan Paddack, and Nancy Riley. To their great credit, voting against the plan were Republican senators Mike Johnson, David Myers, Patrick Anderson, Randy Brogdon, Brian Crain, Clark Jolley, Owen Laughlin, and Jonathan Nichols. “Henry said although the bill is dead under Senate rules, the issue is still alive and he will bring it up in discussions with legislative leaders at every opportunity,” the Associated Press reported. “I tell you what, this fight is not over, not by a long shot,” the governor said. The Tulsa World reported that “Henry said he would consider other ways to advance the issue,

possibly by executive order.” Which should come as no surprise. As Bryce Christensen pointed out in these pages in September 2004 (‘Early Childhood Education in Oklahoma: Cui Bono?’), there are countless politicians, bureaucrats, lobbyists, and political activists in this state with a vested interest – political and/or economic – in the expansion of “early childhood education” (i.e., preschool daycare). “Despite all of the strengths of at-home mothers as educators, and despite the risks of replacing those mothers with paid surrogates, Oklahomans will wait a long time before they hear advocates of earlychildhood education programs acknowledge those strengths or risks,” Dr. Christensen wrote. “Why this strange reluctance to address issues truly central to early childhood education? It is hard not to suspect the distorting influence of self-interest. After all, mothers who stay at home with their children do not create new opportunities for educators or bureaucrats or lobbyists. Those opportunities open up only by persuading parents to turn their children over to surrogates while opening up their tax checkbooks to pay other people’s salaries.” – Brandon Dutcher

Limiting Government, Advancing Freedom By Gov. Mark Sanford ny read through history demonstrates how essenperformers. Government doesn’t. The case in point for tial limited government is to preserving freedom us was the port in Port Royal, which does less volume and individual liberty. What life experience shows us in a year than the Port of Charleston does in a week. is that limited government is equally important in both We said let’s reshuffle the cards and after a fair making your economy flourish and in enabling citizens amount of consternation, the sale is now in motion. to get the most for their investment in government. That’s been matched by our efforts to maximize return Let me be clear up front that in the long run the only on investment to taxpayers through privatization of way to make government truly efficient is to make it things as wide ranging as the state-owned car fleet, smaller, and this seems to me to be the real clarion golf courses, and even bait and tackle shops once run call in highlighting the importance of privatization by state government prior to this administration’s efforts. Efficiency and government are mutually exclu- arrival! sive in our system, and if our Founding Fathers had There is no substitute for time and focus: Milton wanted efficiency I suppose they would have looked Friedman once said the ultimate measure of governmore closely at totalitarian systems. They wanted not ment is what it spends. This is certainly not the only efficiency, but checks on power in our republic. measure — but it is a very good place to start. As a In attempting to advance limited government, consequence, we have spent a lot of time digging into personal freedom, and free the budget. It is said in Washington markets over government fiat, that presidents often get diverted The first real barometer here are a few things we have and focused on foreign policy on whether we are found in South Carolina: because it is seemingly a loftier advancing the Friedman, not freedom, sells: issue. At the state level, there are a conservative So much of why we should wide variety of things to take a chief cause of limited limit government is tied to executive’s eye off budget matters, government is freedom, but sadly we have but I think we all need to remember the state budget. found greater leverage in the first real barometer on whether talking about how Thomas we are advancing the conservative Friedman’s newfound and socause of limited government is the called Flat World necessitates budget. It was Paul Kennedy is his limits to government. The point book The Rise and Fall of the Great we have made continually Powers who talked about how not over the past three-plus years foreign policy but, ultimately, ecois that for our state to survive nomic might was the driver of a and thrive in this new competination’s viability in the long run. tion of 6.5 billion people across planet earth, we must Finally, you can go back to the Ten Commandments make changes to our government cost structure. to see warnings on envy — on coveting what someone Business principles trump ideology in advancing else has. Tragically, envy is part of human nature and limited government: In the world of business, when in some cases it can be used as a tool in attempts to your business model changes, you change with it. limit government. We frequently make the point that South Carolina used to institutionalize every mental government shouldn’t grow faster than the people’s health patient in the state on a single piece of proppocketbooks and wallets — and what we’ve found is erty, but then the business model changed and the people, when they compare their wallets with the number of patients our state institutionalized dropped growth of government, nearly always agree! from several thousand to fewer than 200. Despite the Long story short is that it occasionally gets lonely change, we continued to hold on to the $50 million holding our position in the struggle between the piece of property. We made the business case, and growth of government and freedom — and in advancpointed out that if the vastly underutilized property ing market-based solutions in areas such as education were sold, there would be three dividends: one to or health care. And, as a consequence, I’ve grown to mental health patients, another to taxpayers, and a appreciate my fellow soldiers in this greater battle for third to children in the local school district because the freedom. ✪ property would be back on the property tax rolls. Mark Sanford is the governor of South Carolina. This article Similarly, in the business world, you constantly is excerpted from Reason Foundation’s Annual Privatization reshuffle the cards, from low performers to high Report 2006, available online at www.reason.org/apr2006.

Ya Got Trouble Right Here in Oklahoma City! Oklahoma’s crack team of government educators, the folks who spend billions of dollars a year to achieve heretofore unknown levels of semiliteracy and illiteracy among otherwise normal children, periodically take time out from their educational misfeasance to offer ominous warnings that we’ve got trouble – terrible, terrible trouble – lurking in homeschooling homes all across the state. But as was the case with the flimflam of a certain “Professor” Harold Hill, these warnings are just part of a swindle.

By Bruce N. Shortt

and illiteracy among otherwise normal American children succumb to a compulsion to abandon their diligent pursuit of intellectual mediocrity in order to offer proposals for regulating homeschool parents. Think of it as “the revenge of the failures.” The latest example comes to us courtesy of Oklahoma state Senator Jim Wilson (D-Tahlequah). It turns out there’s an emergency, a swelling crisis, that needs fixin’ right here in Oklahoma City! How do we know? Well, in a recreation of the role of “Professor” Harold Hill in The Music Man, Senator Wilson is in effect telling Oklahomans, “You’re closing your eyes to a situation you do now wish to acknowledge.” Trouble, trouble, trouble, trouble. As “Professor” Wilson puts it somewhat less lyrically in his Senate Bill 375, which was introduced in January: “It being immediately necessary for the preservation of the public peace, health and safety, an emergency is hereby declared to exist …” Now what is this threat to public peace, health, and safety that constitutes a state of emergency? The discovery of an Oklahoma-based Al-Qaeda terror cell? An outbreak of mad cow disease in Tahlequah? A visit to Oklahoma by Paris Hilton? No, “Professor” Wilson is apparently lying awake

n their never-ending effort to “improve” education, state legislators – typically at the behest of public school bureaucrats and special interests – periodically try to increase regulation of homeschooling parents. This makes K-12 education a unique endeavor: It’s a field in which the failures regularly, and astonishingly, insist that they should be able to regulate the successful. Never mind that homeschoolers consistently outperform children institutionalized in government schools or that the longer a child is institutionalized in a government school the worse he does in relation to homeschooled children. Never mind that international surveys of academic performance show that in the course of 12 years government schools manage to turn perfectly capable children into world-class dullards. Never mind, further, that a study of 7,000 homeschooled adults found, among other things, much higher levels of civic involvement, participation in higher education, and life satisfaction among homeschooled adults than among adults who were not homeschooled. None of that matters. From time to time, the same public school bureaucrats who are normally occupied achieving previously unknown levels of semiliteracy

out of prison). Obviously, these amounts would pay tuition at many, many excellent private schools in Oklahoma. Unfortunately, Oklahoma parents generally don’t know much about the actual academic performance of Oklahoma’s public schools. This isn’t entirely their fault. Oklahoma’s highly trained education professionals diligently work at making sure that parents aren’t getting the facts. Oklahoma’s education bureaucrats, together with their legislative enablers, have adopted, for example, a state “accountability test” (the Oklahoma Core Curriculum Test) with standards so low that parents can be told that 83 percent of Oklahoma’s 4th-graders are reading at grade level, rather than the 25 percent that the NAEP reports. Only Mississippi, Alabama, and Georgia have been more aggressive in trying to pull the wool over parents’ eyes about reading performance. Oklahoma’s low academic standards aren’t limited to reading. An American Enterprise Institute scholar examined the rigor of the accountability tests given in each state. Oklahoma’s tests earned the distinction of being one of two states that received a grade of “F.” But the bravura swindle by Oklahoma’s highly trained education professionals doesn’t end there. They’ve also managed to reduce the number of Oklahoma public schools failing to make Adequate Yearly Progress under No Child Left Behind by 85 percent through the simple expedient of lowering standards. This is a twofer for the educrats. Parents now are under the impression that 97 percent of Oklahoma’s public schools are making Adequate Yearly Progress, the highest percentage of any state in the nation. Moreover, the education bureaucrats’ student-victims in low-performing schools are, as a result of this bureaucratic public relations ploy, denied free tutoring services and the opportunity to transfer to a better school within their district. Then there’s the embarrassing problem of Oklahoma’s dropout rate. Oklahoma is among the national leaders in underreporting its dropout rate (Oklahoma ranks 12th out of 47 states in the national dropout lie-a-thon). So, parents and taxpayers also

nights worrying about the possibility that a homeschooling mom somewhere might be lounging in bed eating bon bons instead of educating junior. But before legislators and regulators try to remove an imagined speck in the eye of homeschooling parents, they ought to consider removing the very real log in the eye of Oklahoma’s highly trained education professionals. According to the U.S. Department of Education’s National Assessment of Educational Progress (NAEP), often known as “The Nation’s Report Card,” Oklahoma’s professional educators have failed Oklahoma’s children and taxpayers as follows: 1. Reading: 75 percent of Oklahoma’s 4th-graders cannot read at grade level, with an astonishing 40 percent not being able to read at even a basic level. By 8th grade, 75 percent of Oklahoma’s children still cannot read at grade level, with 28 percent being unable to read at even a basic level. 2. Mathematics: 71 percent of the state’s 4th-graders are below grade level in math, with 21 percent lacking even a basic grasp of mathematics. By 8th grade math illiteracy is burgeoning in Oklahoma: 79 percent of students are below grade level in math, with 37 percent lacking even a basic understanding of mathematics. 3. Science: 76 percent of the state’s 4th-graders are below grade level, with 30 percent lacking even a basic knowledge of science. By 8th grade, 75 percent of Oklahoma’s children are below grade level, with an amazing 33 percent lacking a basic grasp of the subject. Lest anyone be under the impression that the NAEP has unusually high academic standards, testimony before the NAEP board of governors indicates, for example, that the advanced mathematics questions for the 8th-grade NAEP are at best comparable to 5thgrade questions in Singapore’s math curriculum. So, while the NAEP may not require high levels of academic competence, it does highlight Oklahoma schools’ systematic failure to educate. Note, too, that Oklahoma’s public schools manage to produce these prodigious levels of academic failure by spending, according to their own Enron-like accounting standards, roughly $7,200 per student per year (more than $11,000 per student per year using accounting standards that would keep regular folks

Before politicians and regulators try to remove an imagined speck in the eye of homeschooling parents, they ought to remove the very real log in the eye of Oklahoma’s education professionals.

don’t know that roughly 30 percent of Oklahoma students leave high school before graduating. Interestingly, 57 percent of dropouts said in a survey that their schools didn’t do enough to make students feel safe. Even higher percentages wanted increased supervision and more classroom discipline. Evidently, rather than being the slackers they are often portrayed to be, most dropouts recognize that their schools are dangerous. Consequently, they’ve come to the entirely rational conclusion that they would rather be safe than be warehoused in their public school serving as a revenue unit for the system. Perhaps State Superintendent Sandy Garrett’s opponent last November, Bill Crozier, wasn’t so far off base when he recommended that thick textbooks be placed under every student’s desk for self-defense during a school shooting. Why, then, would Senator Wilson or any other politician think that homeschooled children would benefit from more regulation by Oklahoma’s crack team of government educators? Well, apparently Wilson has been persuaded that some Oklahoma homeschooling parents are removing their children from Oklahoma’s government schools just so they can deny them an education at home. Interestingly, SB 375 does not cite evidence that this is happening or that it’s an immediate threat to public peace, health, or safety in Oklahoma or anywhere else. A little reflection, however, would reveal that this worry is palpably absurd. After all, if you really don’t want your children to be educated, perhaps your most effective, and certainly your lowest-cost, strategy would be to institutionalize them in one of Oklahoma’s government schools. That obviously requires much less effort and expense than keeping

your children at home. Nevertheless, Wilson apparently believes that the same bureaucrats who daily busy themselves producing massive failure in Oklahoma’s public schools should have more power over homeschooling parents, even though homeschooling parents are already doing a good job with their own children. Think of it: The public school dropout problem alone dwarfs any difficulties that might or might not exist among homeschoolers. In fact, if the provisions of the Oklahoma law that SB 375 amends were strictly enforced against public school parents, Oklahoma would not be able to build jails fast enough to create the needed space for incarcerating the parents of public school truants and dropouts. Fortunately, it appears that a “Marian the librarian” has emerged to let the professor know that Oklahomans have figured out that SB 375 is a con job. The bill will not be heard in committee, which means it is dead for this year. Nevertheless, we can all agree with the professor that there’s trouble right here in Oklahoma City, but not of the sort he imagines. Oh yes, there’s trouble, friends – we got trouble that needs fixin’ right here in Oklahoma City! With a capital “T” and that rhymes with “P” and that stands for Public School. So now that we’ve identified Oklahoma’s real education problem, here is my modest proposal: Oklahoma’s homeschooling parents should regulate Oklahoma’s public school bureaucrats until Oklahoma’s public school students academically outperform homeschooled children. ✪ Bruce N. Shortt (J.D., Harvard University, Ph.D., Stanford University) is an attorney in Houston.

Oklahoma Democrats ♥ Homeschoolers

klahoma law is considered by national home education experts to be one of the best in the nation. According to the Home School Legal Defense Association, “Oklahoma is the only state with a constitutional provision guaranteeing the right to home school.” According to Article 13, Section 4 of the Oklahoma Constitution, “the Legislature shall provide for the compulsory attendance at some public or other school, unless other means of education are provided, of all the children in the State who are sound in mind and body, between the ages of eight and sixteen years, for at least three months in each year” (emphasis added). During the Oklahoma Constitutional Convention, “Alfalfa Bill” Murray delegate J. S. Buchanan, a Democrat from Norman, suggested that the “other means of education” language be added. Delegate J. A. Baker from Wewoka, another Democrat, agreed: “I think Mr. Buchanan has suggested a solution. A man’s own experience sometimes will teach him. I have two little fellows that are not attending a public school because it is too far for them to walk and their mother makes them study four hours a day.” The motion to add the “other means of education” language was seconded by none other than convention president William H. “Alfalfa Bill” Murray. Delegate Baker, in what has to be one of the best sentences ever uttered by an Oklahoma Democrat, put it well: “People ought to be allowed to use their own discretion as to how to educate their children.” – Brandon Dutcher

A Pension Deficit Disorder Thanks to a 70-year credit card binge by Oklahoma politicians, the state now has more than $10,000,000,000.00 in unfunded liabilities in its pension plans – and you the taxpayers will bear the burden. The current solutions being proposed – infusing the systems with cash or diverting certain tax revenues to them – are not solutions at all. We need real political leaders who will state the obvious: We must abandon our archaic defined-benefit system and move into the 21st century. By Steve Anderson early everyone has known someone – usually a young person – who has let his or her credit card charges get out of control. Often the person will make the minimum payments until he realizes he isn’t reducing the amount owed and in fact may be going deeper into debt. By the time he comes to see a financial professional he often is past the point of no return. Bankruptcy is the only viable option. Typically we think of these individuals as being fiscally irresponsible. Their behavior raises the cost of doing business for the rest of the consumer base. What Oklahomans may not realize is that our elected officials have been acting this way for nearly 70 years. The framers of Oklahoma’s constitution wisely included a ban on most forms of state debt so that politicians could not bankrupt the state with giveaways. However, our elected officials have found a big, big loophole. So it is that we now have a multibillion-dollar unfunded liability accumulating in the state’s retirement funds. A March 24, 2006 report from the Oklahoma Pension Oversight Commission (OPOC) entitled “Crisis in the Oklahoma State Pension Systems” included this bit of cheerful news for Oklahomans: “Oklahoma’s

pension systems are in a state of serious financial crisis. For many years, warnings have been issued, only to be ignored. In the meantime, the problem has grown worse and the financial problems have only accelerated. A crisis state has been reached.” The report went on to point out that “Oklahoma has more than $10 billion in current unfunded liabilities in its pensions” [emphasis in the original] and “four times more money than is currently provided is needed to just keep the fund level from dropping below the current level.” The bulk of this debt is in the Oklahoma Teachers Retirement System (OTRS), which has $7.673 billion in unfunded liabilities, but all of the state’s retirement systems (with the exception of the judicial retirement system) contribute to the debt. Guess who’s on the hook for the politicians’ irresponsibility? Published opinions from the attorney general (see, for example, No. 96-21 and No. 05-040) indicate this debt is an absolute obligation of the state. This means the ultimate responsibility for paying off this $10 billion debt rests with the Oklahoma taxpayers. However, even before Oklahomans directly feel the

effect on their pocketbooks there will be a hidden cost. As OPOC correctly pointed out, “State government faces negative impact from the funding crisis much sooner than the general public. Left unchecked, the State’s credit rating could be downgraded. The unfunded status of the State’s pension systems has become a more and more prominently mentioned concern of the rating agencies in their rating reports. A downgrade in the State’s bond rating would lead to higher borrowing costs and would siphon off funds that could otherwise be used to fund essential state services.” Just how real are these unfunded liabilities? They are very real. They represent amounts owed to retired or currently employed teachers, state employees, firefighters, and law enforcement officers in the form of promised retirement benefits that are nonnegotiable. As OPOC pointed out, “If the problem is left unaddressed, the systems will eventually require a cash infusion from the State of staggering proportions to meet current payment obligations. This could result in the need for the State to raise taxes or dramatically reduce funding to vital State programs.”

examples have spotlighted the inherent problems with defined-benefit plans. Unfortunately, the flaws of defined-benefit plans are even more pronounced in the public sector. For years a perverse incentive existed where Oklahoma politicians could use the plan to buy votes but hide their actions from all but the most knowledgeable financial wizards. For many years this debt was kept “off the books” thanks to flaws in governmental accounting rules which allowed politicians to cover their tracks. However, recent rule changes enacted by the Governmental Accounting Standards Board (GASB) have required government entities to reveal these debts to the public in their annual financial statements. Defined-benefit plans are typically funded by contributions from both the employee and the employer, but in the case of OTRS taxpayers have been the victims of politicians’ profligacy from day one. When OTRS was formed in the 1940s, legislators chose to grant benefits to teachers who had not yet contributed towards their retirement. Since that time, legislators have done things like borrow money from

Incredibly, the amount of the total debt is most likely understated since the assumptions used in the calculations to arrive at the estimate of future payments typically lag the realities of the real world. For example, the assumptions use an estimated life expectancy that cannot predict breakthroughs in modern science that may extend life past the estimated benefit payout life currently used. Additionally, since benefit improvements for each system’s retirees are voted on by the legislature, the systems can only estimate what they believe may happen with future benefit increases. How Did We Get Here? How did we get into this mess? The simple answer is that the state embraces a type of retirement plan that has shown a tendency to become fiscally insolvent. Defined-benefit plans such as the state uses in each of its systems have inherent flaws that are almost unavoidable. In a defined-benefit plan the employer guarantees a certain benefit payment to an employee for his or her lifetime, come hell or high water. The collapse of Bethlehem Steel, the continuing crisis at General Motors, and dozens of other

OTRS for pet projects and grant benefit increases without providing money to fund them – knowing full well that the bill for these acts would not come due during their tenure. (With respect to OTRS, more than one state legislator has been known to quip, “Thank God for term limits.”) In effect, politicians have used a “credit card” to buy votes from the members of the school-employee labor unions. With minor variations, the situation is similar in each of the other state retirement systems’ accumulation of unfunded debt. A recent example was seen during the fiscal “crisis” from 1999 to 2002 when Oklahoma legislators were strapped for cash with which to appease the Oklahoma Education Association (OEA), Oklahoma Retired Educators Association (OREA), and the Oklahoma Public Employees Association (OPEA). Legislators used their “credit card” to run up charges of nearly $2 billion by giving ad hoc benefit improvements to the members of those groups. In an effort that was similar in effect to putting a Band Aid on a gaping ax wound, legislators passed a law directing four percent (it will increase to five

percent in 2008) of Oklahoma’s individual income tax, corporate income tax, sales tax, and use tax receipts to go to the OTRS. This means millions of dollars a year (in fiscal year 2006 it was more than $202 million) are diverted from important tasks like locking up prisoners and fixing roads and bridges. A similar diversion is used by the Oklahoma Law Enforcement Retirement System (OLERS), Oklahoma Police Pension and Retirement Plan (OPPRS), and the Oklahoma Firefighters Pension and Retirement System (OFPRS) to finance benefits. Part of the cost of insurance purchased by hardworking Oklahomans is a state tax charged to the insurance companies called the insurance premium tax. Oklahomans may think these tax receipts are spent regulating the insurance industry and/or helping the poor afford insurance, but in 2006 more than $145 million was redirected to the aforementioned retirement systems. OPOC’s Non-Solutions “The current health of the State public pension systems is poor,” the OPOC report concluded. “This report is a call to action for Oklahoma policymakers similar to the warning of a heart attack. The patient

change the situation that created this mess. Third, OPOC suggests dedicating a portion of excess revenue collections to the pension systems. Again, we have the same fundamental flaw as in recommendations one and two above. Fourth, OPOC suggests that policymakers “pursue other financing mechanisms, such as pension obligation bonds [POBs], to infuse additional money into the systems.” On the face of it this idea has some appeal. But OPOC fails to point out the risk to the state – millions of dollars per year – if the market were to take a prolonged dip during the first years of the POBs. More money would be added to our debt payout, and at the end of the day we still haven’t done one thing to address the underlying cause of the problem. How Then Do We Solve the Problem? How do we get out of this mess? The answer is simple but the execution is complex. We must remove the ability of the legislature to fund benefits without providing funding. No doubt the framers of Oklahoma’s Constitution would have included a provision to limit unfunded liabilities if they had known they would exist. Without a constitu-

can choose to eat healthier, exercise, and stop smoking and continue to live a long, healthy, productive life. Or the patient can be stubborn and refuse to change his ways, thus choosing a path that leads to an early grave. The choice is up to Oklahoma’s policymakers.” OPOC correctly diagnosed that the patient is dying. Unfortunately, OPOC’s four-part prescription amounts to no more than hooking the patient up to a respirator. First, OPOC suggests that policymakers “increase State revenues to pension systems.” But by OPOC’s own admission it is not feasible to infuse the amount of cash needed to fix the current debt. One has to ask: What in the history of any of the pension funds, most especially OTRS, leads OPOC to conclude that OTRS won’t just incur more unfunded liabilities even if it can pay off the current ones? Second, OPOC suggests that policymakers “eliminate or ameliorate the effects of transferable tax credits on the insurance premium tax base.” In other words, a back-door tax increase. And at the end of the day you have the same problem as in recommendation number one – you have not done one thing to

tional control, the best hope for Oklahoma taxpayers is for a change in the type of plan used. Most private businesses use some version of a defined-contribution plan in which the employer guarantees the level of contribution to the plan. The employee is usually empowered to make investment choices but is not guaranteed any more than the amount in the plan at retirement. The very nature of the plan almost guarantees fiscal solvency for the provider. In previous issues of Perspective, Naomi Lopez Bauman has written about defined-contribution plans in great detail. The bottom line: It is improper to burden 3.5 million Oklahomans with billions of dollars in debt just so a tiny fraction of the population can cling to an archaic benefit system. It’s time for some true leadership on this issue. ✪ OCPA research fellow Steve Anderson (MBA, University of Central Oklahoma) is a Certified Public Accountant with more than 20 years experience in private practice. He previously spent two years as an analyst in the Oklahoma Office of State Finance, where he specialized in Medicaid and pension issues.

Important Things to Remember By Brett A. Magbee n about 170 words and six photographs, I am tasked with the responsibility of providing Perspective readers with a view of the ongoing activities at OCPA each month. It means capturing succinctly the essence of what happens here. That process is never easy because there is always more to report on than space permits. The important things to remember are: (1) OCPA is a place where people congregate to explore important and timely public policy ideas; (2) OCPA trustees, staff, supporters and friends have a principled way of viewing the world, based on the idea that free enterprise, individual initiative, and limited government

are essential to a well functioning society; and (3) that OCPA is always seeking to find new ways to serve our fellow citizens and policy makers through our work. The other thing we attempt to communicate is that this work exists because citizens like you give generously to our efforts. While we realize there are other worthy nonprofit organizations you can give to, we hope you recognize that when you give to OCPA you are investing in the future direction of our state. In Oklahoma’s centennial year what could be more appropriate? Please let us hear from you today. ✪

At a recent meeting at OCPA, Congressman Frank Lucas updates a group of citizens on happenings inside the Beltway. OCPA continues to be Oklahoma’s number one gathering place for both state and national conservative policymakers.

Lynne Thurman, director of the Stafford Air & Space Center in Weatherford, greets OCPA’s Margaret Ann Hoenig in front of a statue of General Thomas Stafford. This year’s 2007 Citizenship Award will be presented to the Oklahoma astronaut on March 21 (see page 3).

Civic responsibility is not only talked about at OCPA but also practiced by members of our staff. OCPA’s Brian Hobbs helps tutor a 3rd-grade student from Sequoyah Elementary School each week, saying it’s one of the most rewarding experiences he has had.

State Sen. Clark Jolley (R-Edmond) discusses school choice with one of his constituents, OCPA’s Brandon Dutcher. Last month in the Senate Appropriations Subcommittee on Education, Sen. Jolley voted in favor of a bill – SB 536 authored by Sen. James Williamson (R-Tulsa) – which would have provided school vouchers or scholarships for mentally disabled students. The bill was defeated on party lines.

Members of the OCPA team discuss the best ways to advance the cause of freedom in Oklahoma. Pictured here at a recent lunch meeting are (clockwise from left) OCPA fellow Dr. J. Rufus Fears, former OCPA intern Kyle Harper, OCPA chairman Dr. David Brown, and OCPA vice president Brandon Dutcher.

OCPA’s newest interns are from top to bottom: Carol Wehe, Rose State College; Dustin Gabus, University of Central Oklahoma; Paula Burger, University of Oklahoma; and Patrick Gibbons, University of Oklahoma. Many of our past interns have begun careers in public policy.

There are lots of ways to provide for those you love when you’re no longer able to be there for them. One way would be to include a gift to the Oklahoma Council of Public Affairs in your Will or Living Trust. This enables you to leave a legacy which advances policy solutions that increase the economic vitality of our state. Such gifts to OCPA are free of estate taxes and have other financial advantages too. Send for our free brochure on ways you can make a continuing impact on their futures. Call: 1-405-602-1667 or complete the following information and mail to OCPA, 1401 N. Lincoln Blvd., Oklahoma City, Oklahoma 73104.

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“To call someone ‘judgmental’ is to accuse him of disapproving of something. But the word itself expresses disapproval. Methinks this calls for explanation.” Joe Sobran

“The kind of things homeschoolers are doing may be the saving grace of our nation.” Civil rights activist Martin Luther King III

“Maybe we should subcontract all of public education to homeschoolers.” Former U.S. secretary of education William Bennett

“Heredity and environment are funny things ... The home environment can undo a lot you try to do at school. That’s why we’ve lowered the kindergarten age year after year until now we’re almost snatching them from the cradle.” The fire captain in Ray Bradbury’s Fahrenheit 451, explaining the key to building a totalitarian state

“The National Education Association supports early childhood education programs in the public schools for children from birth through age eight.” From the NEA’s 2006-07 resolutions

So By All Means Let’s Put the 3-Year-Olds on Campus “Today’s schoolchildren are definitely growing up in a world very different from the one that we were raised in,” first lady Kim Henry said February 10 in The Oklahoman. “Violence on school campuses is increasing at an alarming rate.”

E “The National Education Association believes that home schooling programs based on parental choice cannot provide the student with a comprehensive education experience. When home schooling occurs, students enrolled must meet all state curricular requirements, including the taking and passing of assessments to ensure adequate academic progress. … Instruction should be by persons who are licensed by the appropriate state education licensure agency, and a curriculum approved by the state department of education should be used.” From the NEA’s 2006-07 resolutions

“The latest political rumor is that if Hillary Clinton wins the presidency, she will be replaced in the Senate by her husband Bill Clinton. When asked about it, Bill Clinton said, ‘I dream of replacing Hillary every day.’”

“If there is one thing upon this earth that mankind love and admire better than another, it is a brave man — it is the man who dares to look the devil in the face and tell him he is a devil.” James A. Garfield

Conan O’Brien

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Perspective is published monthly by the Oklahoma Council of Public Affairs, Inc. No substantial part of the activities of OCPA includes attempting to influence legislation, and OCPA does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.