Perspective - August 2013 by OCPA

PERSPECTIVE August 2013

OKLAHOMA COUNCIL OF PUBLIC AFFAIRS

Growth Experience Oklahoma’s tax Cuts have worked

In Case You Missed It Some federal lawmakers are trying to defund Obamacare— something OCPA distinguished fellow J. Rufus Fears recommended two years ago.

A Weekly Standard cover story profiled GOP attorneys general, such as Oklahoma’s Scott Pruitt, as the unsung heroes challenging the Obama agenda.

http://tinyurl.com/mramjcw

Noting the recent surge in healthcare affordability fueled by price transparency, OCPA president Michael Carnuccio says Oklahoma should market itself as a medicaltourism destination. http://tinyurl.com/mzemm4a

Private schools produce more tolerant students than public schools. http://tinyurl.com/m7vkch3

http://shar.es/k1sAx

Barry Switzer, who has seven homeschooled grandchildren, thinks homeschoolers should be allowed to play public-school sports.

Politically powerful special interests stand to collect billions of dollars if politicians approve the Obamacare Medicaid expansion. http://www.mackinac.org/18844

To try to save Obamacare, President Obama has hired a hospital lobbyist. http://tinyurl.com/mgu56yw

Medicaid expansion could cause one million low-income Americans to move from work to welfare.

In The Wall Street Journal, James Pierson explains how big government has co-opted many hospitals and other parts of the nonprofit sector, turning it into a junior partner in administering the welfare state.

http://tinyurl.com/n2jr2dq

http://on.wsj.com/13Pv0YS

http://newsok.com/article/3828013

PERSPECTIVE OCPA Staff

OCPA Trustees

Brandon Dutcher .................................................. Editor

Blake Arnold • Oklahoma City

Tom H. McCasland III • Duncan

Daryl Woodard • Tulsa

Robert D. Avery • Pawhuska

David McLaughlin • Enid

Daniel J. Zaloudek • Tulsa

Lee J. Baxter • Lawton

Lew Meibergen • Enid

Steve W. Beebe • Duncan

Ronald L. Mercer • Bethany

G.T. Blankenship • Oklahoma City

Lloyd Noble II • Tulsa

OCPA Researchers Steven J. Anderson, MBA

Dave Bond ......................... Director of External Relations Brian Bush ..................................... Executive Vice President Michael Carnuccio .................................................... President

John A. Brock • Tulsa

Mike O’Neal • Edmond

Clint Colbert .................................................... Office Manager

David R. Brown, M.D. • Oklahoma City

Bill Price • Oklahoma City

Brandon Dutcher ....................... Vice President for Policy

Paul A. Cox • Oklahoma City

Patrick T. Rooney • Oklahoma City

Dacia Harris .............................. Interactive Media Director

William Flanagan • Claremore

Melissa Sandefer • Norman

Rachel Hays .................................... Development Assistant

Josephine Freede • Oklahoma City

Thomas Schroedter • Tulsa

Research Fellow

Ann Felton Gilliland • Oklahoma City

Richard L. Sias • Oklahoma City

Matt Mayer, J.D.

John T. Hanes • Oklahoma City

Greg Slavonic • Oklahoma City

Ralph Harvey • Oklahoma City

John F. Snodgrass • Ardmore

John A. Henry III • Oklahoma City

Charles M. Sublett • Tulsa

Henry F. Kane • Bartlesville

Robert Sullivan • Tulsa

Robert Kane • Tulsa

Lew Ward • Enid

Gene Love • Lawton

William E. Warnock, Jr. • Tulsa

Jennie Kleese ............... Development Events Manager Karma Robinson ...... Vice President for Development Jonathan Small .................................. Fiscal Policy Director

Research Fellow

Tina Dzurisin

Research Associate

Vance Fried, J.D. Research Fellow

J. Scott Moody, M.A. Research Fellow

Andrew C. Spiropoulos, J.D.

Milton Friedman Distinguished Fellow

Wendy P. Warcholik, Ph.D. Research Fellow

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 are those of the author, and should not be construed as representing any official position of OCPA or its trustees, researchers, or employees.

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Contact OCPA staff at (405) 602-1667 for more information on the State Policy Network (SPN) annual meeting. To learn more about SPN, visit www.spn.org.

School Spending Up, Student Achievement Flat By Patrick B. McGuigan

Every year, I perform in the Oklahoma City Gridiron show, a charity roast of local, state, and national politicians which raises money for scholarships. One of the most popular routines is a knock-off of the old “Carnac the Magnificent” skits Johnny Carson did on The Tonight Show. In our skits, “Gridnac” is given an envelope, then guesses the question hidden inside before opening it to see if he is right (which he always is). Every single year, for a long spell now, one of Gridnac’s magical answers is this: “Boy, the Dallas Cowboys really stink this year.” Inside the envelope, there is … no question. Changing the subject now to public policy … Answer: Higher spending in real terms, and classroom mediocrity, in every objective measurement. Question: What have taxpayers, parents, and students—nationwide and in Oklahoma—received in return for almost five decades of an open checkbook for school expenditures? In last winter’s Oklahoma City school board elections, the most telling paid advertisements were those that emphasized low scores, for many city schools, on the much-maligned A-F school grading system. Having heard many arguments against those grades, citizens who cared enough to vote decided the assessments were pretty much on target. They swept out a twoterm board president and replaced her with a passionate critic of the way things are. Across the nation, recent news stories have called attention to slight drops in taxpayer funding for America’s government-run schools over the last couple of years. Defenders of the sta-

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tus quo tout this as the reason student achievement remains lackluster in U.S. public schools. But, in truth, there is no question: For at least five decades, too many schools have been failing taxpayers, parents, students, communities, and the nation. Walk through the evidence. In May, The Wall Street Journal reported, “Education officials say decreased spending will make it more difficult to prepare U.S. students for an increasingly competitive global marketplace. Some critics argue that public education costs are skyrocketing while academic achievement has not kept pace. They want the system overhauled before more money is spent.” But the exception (a slight decline or flattening in education spending re-

cently) by no means disproves the rule (public education spending has grown significantly over the last half century of American history). Look at the Cato Institute chart below. It sketches total cost increases for U.S. public schools since 1970 (that’s the blue line, a hike of 160 percent or more). The Institute’s Andrew Coulson also sketches the increased number of employees (that gold line, showing a nearly 100 percent hike since 1970) and total enrollment (the dotted line, showing declines for 20 years after 1970, before slowly climbing in the subsequent three decades). And, wait for it … at the foot of the chart you can see the flat-lined achievement scores for reading, math, and science on the

National Assessment of Educational Progress (NAEP), popularly known as “the nation’s report card.” Even if the venerable NAEP is somehow suddenly deficient as a reasonable measure of achievement in the aggregate, it echoes what every objective measure of student achievement tells us. Despite spending increases and personnel increases over time, American student performance has declined, flattened, or infrequently blipped up temporarily, only to fall back again. Average scores on the SAT, one of the two most prominent measures of college preparedness, declined in 2012. As for the ACT, scores stayed flat in 2011 and 2012. Even critics of standardized testing say that, in the aggregate and over the course of years, the two college preparatory tests are, like the NAEP itself, a reliable way of looking at overall achievement (if not necessarily individual student potential). A Washington Post education writer recently reported that one of those critics—Bob Schaeffer, public education director of FairTest, the National Center for Fair and Open Testing—concludes “aggregate SAT and ACT scores trends are one tool for evaluating overall education quality—and they point to the conclusion that U.S. K-12 education is headed in the wrong direction.” Let’s bring it home, and give Oklahoma at least this much: About threequarters of our students take the ACT before high school graduation. This puts us in the handful of states that have the equivalent of an exit examination that, over time, provides a consistent measure of what most kids get from 12 to 14 years of Oklahoma schooling. And that is? Since 1990, less than a five percent improvement (despite a 40 percent-plus spending increase) in ACT scores for graduating seniors in the Sooner State. Since 2007, Oklahoma has been stuck at or around an average score of 20.7. Mike Antonucci of the Education Intelligence Agency is a man the National Education Association loves to hate.

His national analysis of five-year trends in per-pupil spending from 2005-06 to 2010-11 found a 0.2 percent decline in enrollment, a 16 percent increase in taxpayer funding, and flat or declining achievement. No matter how you look at it, there’s a bottom line, and the Cato Institute’s Coulson gets us there: “By the time students are preparing to enter higher education or the workforce, they are no better prepared academically than they were two generations ago—despite the fact that we have spent three times as much on their K-12 education as we did educating the class of 1970.” There’s no question. The story is the same in Oklahoma City. In 2001, voters approved a massive tax increase to finance infrastructure improvements throughout the metropolitan area, for all 21 public school districts in or touching the city. Despite this spending, achievement in local public schools has flattened and in some cases declined. Voters, parents, and school patrons

are not stupid. They know that despite the nice new or fully refurbished buildings, the actual results in students’ lives are, in the aggregate, unimpressive. There are pockets of high achievement, but those exceptions make the rule frustrating. Statewide and in the city, the education establishment had denigrated attempts to establish end-of-instruction tests to raise the bar in public education. So, as a result of actions taken in the 2013 legislative session, the state is more or less backing away from those tests. What’s beyond dispute is this: Whether achievement is measured by NAEP, SAT, ACT, or the Iowa test or the EOI tests for high school seniors, our schools are failing our students, taxpayers, community, state, and country. Our people, whatever else they’re missing, know the system is failing. When will those who get paid to run that system know it?

Patrick McGuigan (M.A. in history, Oklahoma State University) is editor of CapitolBeatOK.com. He is the editor of seven books on legal policy, and the author or coauthor of three books, including Ninth Justice: The Fight for Bork. The PBS affiliate in Oklahoma City announced last month that McGuigan has been nominated for a regional Emmy Award.

www.ocpathink.org

Policymakers Should Fund What Works By Brandon Dutcher

“There’s a tradition in education,” former New York City schools chancellor Frank Macchiarola once observed, “that if you spend a dollar and it doesn’t work, you should spend two dollars; and not only that, you should give those two dollars to the same person who couldn’t do the job with only one.” That tradition is alive and well in Oklahoma. Earlier this year the Tulsa World reported that national education activist Jonah Edelman, founder and chief executive officer of Stand for Children, was in Tulsa to announce

PERSPECTIVE • August 2013

that his organization is launching an affiliate in Oklahoma. “If Oklahoma wants to get results for students, it needs to fund the reforms it has already passed,” Edelman said. One example he cited was a recent reform of the Reading Sufficiency Act. Brian Hunt, a former president of Tulsa’s school board who now serves as executive director of Stand for Children Oklahoma, agreed. He told The Oklahoman that the organization’s main goal this year is “funding the reforms that are on the books.” Various policymakers have echoed this theme—a theme

which is quite frankly nothing short of absurd. Instead of demanding even more money for the government’s monopoly system, here’s what policymakers and activists should have said to taxpayers this year: We are profoundly sorry. Despite spending more than $8,000 per student in Oklahoma (the Census Bureau says $8,863; the NEA says $8,285), only 27 percent of our state’s fourth graders are proficient readers. In other words, there are currently more than 34,000 fourth graders in

this state who are unable to read at grade level—despite the fact that we’ve already spent some $30,000 on each of their educations. It is with deep sorrow that we are forced to acknowledge that, as one critic has noted, we “spend billions of dollars a year to achieve heretofore unknown levels of semiliteracy and illiteracy among otherwise normal children.” We have failed at our most basic task, and we have damaged countless lives. What’s worse, we continue to do it year after year. We can now populate five OU football stadiums with all of the school-produced adult illiterates in this state. We are deeply sorry for the lives we have damaged, many of them unalterably. That’s what the naked emperors should have said. Instead, here’s what they did say: “Oh, you mean you want them to read? Well now that’s gonna cost you extra.”

Legacy of Service Unfortunately, liberals have a long history of spending money—“for the children,” of course—on ineffective government programs. According to the Tulsa World, Mr. Edelman “said he founded Stand for Children as a way to carry on his parents’ legacy of service.” His mother, Marian Wright Edelman, is president of the Children’s Defense Fund. She is a former trustee of the Industrial Areas Foundation, which was established by community organizer Saul Alinsky to train people in the tactics of revolutionary social change. She considered Alinsky “brilliant” and delivered a eulogy at his funeral. As Kay S. Hymowitz writes: When the country debated welfare reform, [Mrs. Edelman] vigorously resisted work requirements—though she had seen with her own eyes that even the most destitute gain selfrespect from hard work and orderly lives. Edelman was in high dudgeon when President Clinton, her former friend and ally, was on the verge of signing a welfare-reform bill: she called it “national child abandon-

ment” and “a defining moral litmus test for your presidency” in an open letter published in the Washington Post. She organized the “Stand for Children” march on Washington. And when the president signed the bill and her husband [civil-rights attorney Peter Edelman, who had been the issues director for Ted Kennedy’s presidential campaign] resigned from his post as assistant secretary of HHS, she called it a “moment of shame,” comparable to the worst human evils: “Never let us confuse what is legal with what is right,” she reproached. “Everything Hitler did in Nazi Germany was legal, but it was not right.” Indeed, that 300,000-person-strong march on Washington—which Jonah Edelman helped organize—was Stand for Children’s founding rally. So I suppose it’s not surprising that the organization would continue to push for more government spending on ineffective government programs while continuing to resist reforms that are proven to work.

What Works One Oklahoma state lawmaker made the statement that Stand for Children Oklahoma is “going to try to take the side of what works.” But is that really true? Are they going to take the side of vouchers and tax credits, for example? As Greg Forster pointed out last month in these pages, “the empirical evidence consistently shows that choice improves academic outcomes for participants and public schools.” • Twelve empirical studies have examined academic outcomes for school choice participants using random assignment, the “gold standard”

of social science. Of these, 11 find that choice improves student outcomes—six that all students benefit and five that some benefit and some are not affected. One study finds no visible impact. No empirical study has found a negative impact. • Twenty-three empirical studies (including all methods) have examined school choice’s impact on academic outcomes in public schools. Of these, 22 find that choice improves public schools and one finds no visible impact. No empirical study has found that choice harms public schools. Oddly, during his visit to Tulsa Mr. Edelman was quoted as saying, “If you look at the research on vouchers, there is no indication of student achievement progress.” If indeed “the goal is student achievement,” as Mr. Edelman says—if the goal is to do what works—activists and policymakers should not be clamoring for something that doesn’t work: increased government spending on the monopoly system (see page 4). Instead, they should be calling for more private-school choice.

“

Oh, you mean you want them to read ? Well now that’s gonna cost you extra

Brandon Dutcher (M.A. in public policy, M.A. in journalism, Regent University) is vice president for policy at OCPA. He’s the editor of the book Oklahoma Policy Blueprint, which was praised by Nobel Prize-winning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His articles have appeared in Investor’s Business Daily, WORLD magazine, the Tulsa World, The Oklahoman, and more than 190 newspapers throughout Oklahoma and the U.S.

www.ocpathink.org

‘Freedom Feminism’ and the Pursuit of Happiness By Wendy P. Warcholik

“ In the pursuit of happiness, men and women take different paths 8

PERSPECTIVE • August 2013

With 70 percent of women now in the workforce, at first glance the audience might seem enormous for the recent bestselling career book Lean In, in which author Sheryl Sandberg discusses perceived roadblocks women face in their careers. Sandberg herself is a Harvard-educated woman who before the age of 30 had followed her economics professor Larry Summers to the World Bank and then served as his chief of staff when he was appointed Secretary of the Treasury. She helped start Google and is currently second in charge at Facebook, serving as chief operating officer. For the .001 percent of women like herself who are Ivy League-educated and determined to reach the highest levels of business leadership in their professional lives, she has much to teach. However, to the majority of women what she offers is her plan to compete with men to reach the corner office— which is squarely at odds with what most women say they want for themselves. In a 2013 national poll on parenthood, the Pew Research Center asked mothers and fathers to identify their ideal work arrangement. A full 61 percent of mothers said they would rather work part-time or not at all while 75 percent of fathers preferred full-time work. Christina Hoff Sommers, a resident scholar at the American Enterprise Institute, points to similar results found by sociologist Catherine Hakim at the London School of Economics when she studies the preferences of women and men in Western Europe.

In a recent article, Sommers said the progressive feminist movement views these choices as “evidence of entrenched sexism and internalized oppression.” She continues, “The National Organization of Women points to ‘persistent stereotypes’ and ‘myriad forms of sexism’ that ‘steer’ women to particular paths and family roles.” In an interview on 60 Minutes, Sandberg opined that the greatest threat to a woman’s career is that point in a woman’s life when she is considering having children. She says it is at this point that women tend to stop aggressively pursuing more challenging tasks in their jobs, and that this is when they should “lean in” instead of check out for mommy duty. Sandberg even contradicts herself when asked if she feels guilty about her decisions. To lend credibility to the content of her book, she should definitely say “no.” Instead, she says all women feel guilty about the professional decisions they make and this is a fact of life that doesn’t afflict men. That feeling is one that progressive feminists would have us women ignore. However, when a woman like Sandberg, who has written an entire book supporting progressive feminist ideology, publicly admits that even she feels guilty, we have a problem with how American culture perceives the role of women and work. The progressive feminist agenda pits women against men as they vie for the same jobs as men. The assumption is that men and women are interchangeable. Those who are in traditional marriages are told that domestic du-

OSUIT President Warns of Higher-Ed Tipping Point By Brandon Dutcher

The signs are all around us that big changes are afoot in higher education. Here are three more: • According to a recent USA Today report, 11 colleges and universities in Oklahoma have students who are more likely to default on their loans than they are to graduate. • A former United States Secretary of Education has co-authored a new book asking if college is still worth it. • In a new survey by Inside Higher Ed and Gallup, only 13 percent of campus chief financial officers express strong confidence in the viability of their institution’s financial model over the next 10 years. Thankfully, there are some leaders in Oklahoma’s higher education system who understand the times. University of Central Oklahoma president Don Betz, for example, recently told The Oklahoman that higher education has entered a new era, and that there’s no telling what colleges will look like in the decades ahead. Bill R. Path, president of the Oklahoma State University Institute of Technology (OSUIT), believes that “with unemployment rates among college graduates rising, the well-regarded reputation of higher education in the United States teeters

precariously between relevance and irrelevance.” Over at the Huffington Post, Dr. Path writes: In Malcolm Gladwell’s book, The Tipping Point: How Little Things Can Make a Big Difference, he describes how small incidents can become “moments of critical mass” that trigger widespread changes in public opinion. Perceptions like “relative worth” and “value in the marketplace” balance on a razor thin edge and the “tipping point” for public opinion of higher education is now upon us. Last year more than 1.5 million new bachelor’s degree holders reported being either unemployed or underemployed — a national tragedy by any measure. These young people enrolled in college with the expectation that a degree would improve their lives. They certainly deserved better. The general public watches helplessly as the cost of college tuition goes up every year. They have observed that more and more students are burdened with overwhelming school loan debt after college. They have seen unemployment lines growing longer across the coun-

try, and have noticed a rise in the number of recent college graduates waiting in these lines. Out of loyalty and respect to its many revered institutions, the public has been very slow to hold higher education accountable in such affairs. But make no mistake — if substantive changes do not take place, the tipping point of public opinion will shift to be against higher education. Even now, many college graduates are recognizing they have been ill-prepared for today’s workforce, and they are beginning to ask, “Was my college education worth it?” In Dr. Path’s view, “traditionalist attitudes” in higher education are largely to blame. He doesn’t appear ready to give up on the humanities altogether, but he does make a good case that “there must be a curricular balance struck. … Universities must find ways to adopt more applied instructional methodologies at all levels and offer more program options in fields of advanced and emerging technology.” Whether or not one agrees with his specific remedies, Dr. Path deserves great credit for his diagnosis.

ties should be equally shared. This is a necessity in Sandberg’s eyes as well. According to her, studies show that a wife’s estimation of her husband’s sexiness increases if he does the laundry. Perhaps this is true; however, what doesn’t correlate with Sandberg’s prescriptions for women’s success and happiness is the evidence of what women themselves are saying about the type of work arrangements they prefer and the professional fields they are actually pursuing. According to Sommers, women remain far more likely to enter fields like teaching, child care, social work, nursing, and pediatrics. Men are far more likely to be engineers, auto mechanics, metallurgists, and construction workers. As Sommers rightly questions: “Are these trends the result of sex discrimination, hostile environments, or invis-

ible barriers—as gender activists never tire of saying? They could be. But isn’t it possible that in the pursuit of happiness, men and women take somewhat different paths?” We are not a genderless society. The evidence is clear that women and men prefer different occupations and different work arrangements (full-time, parttime, stay-at-home). Sommers says that feminism needs to be redefined, and I agree with her. She has coined the term “freedom feminism.” “Freedom feminism stands for the

moral, social, and legal equality of the sexes—and the freedom of women to employ their equal status to pursue happiness in their own distinctive ways,” she says. “Freedom feminism is not at war with femininity or masculinity and it does not view men or women as opposing tribes.” What I value about this type of reform of progressive feminism is that if offers us a feminism that affirms a woman’s moral compass and personal liberty.

OCPA research fellow Wendy P. Warcholik (Ph.D., George Mason University) formerly served as an economist at the U.S. Department of Commerce’s Bureau of Economic Analysis, and was the chief forecasting economist for the Commonwealth of Virginia’s Department of Medical Assistance Services. She is a co-creator (with J. Scott Moody) of the Tax Foundation’s popular “State Business Tax Climate Index.”

www.ocpathink.org

Congratulations, KD! By Tina Korbe Dzurisin

When sports fans discovered that NBA all-star Kevin Durant proposed to WNBA standout Monica Wright, pundits quickly asked, “How will marriage change KD?” Implied in the very tone of the question was not merely that marriage will change Durant—and it will—but that it must necessarily negatively affect his focus on the basketball court. Kevin Durant is a multimillionaire athlete famous for his grounded approach to life. When the public greets even his decision to marry with suspicion instead of hearty congratulations, the members of the marriage-minded contingent may rightly assume they’re living in a culture that doesn’t exactly prize covenantal commitment. Yet, the proven benefits of marriage justify the heartiest of congratulations to Durant and his bride-to-be. As a 24-year-old professional basketball player in peak performance shape and with an annual salary of $17.83 million, Durant boasts impressive physical and financial health, but, if statistics are any indication, Durant will be even healthier and wealthier as a result of marriage. As I’ve written repeatedly, married individuals have lower rates of mortality than unmarried individuals—about 50 percent lower among women and 250 percent lower among men. They’re less likely to abuse alcohol or to engage in patently self-destructive behaviors like smoking. They report less depression, less anxiety, and lower levels of psychological distress than those who are single, divorced, or widowed. By their fifties and sixties, married individuals are likely to have a net worth of nearly four times that of their di-

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vorced or never-married counterparts. KD was also wise to pop the question when he did. The median age at first marriage might be at an all-time high (26 for women, 28 for men), but research suggests that Americans in their mid-20s are primed for lasting, high-quality marriages. Of Americans in five different data sets, those who married between age 22 and age 25 were most likely to be in “intact marriages of the highest quality,” according to “Later first marriage and marital success,” a 2010 study by Norval D. Glenn, Jeremy E. Ueker, and Robert W.B. Love, Jr. “Later marriages fare very well in survival but rather poorly in quality,” the researchers write. “The findings … suggest that most persons have little or nothing to gain in the way of marital success by deliberately postponing marriage beyond the mid-twenties.” Should Durant and Wright decide to have children shortly after they marry, they’d demonstrate sagacity yet again—and not just because their children would likely be prodigious basketball players. According to the 2010 Pew survey, “Millennials: Confident. Connected. Open to Change,” 52 percent of twentysomethings say to be a good parent is one of the most important goals in life. Yet, the number of women who opt for childbearing between the ages of 35 and 39 has increased by nearly 50 percent in the last 20 years, and by 80 percent for women aged 40 to 44, according to statistics cited by clinical psychologist Meg Jay, Ph.D., in her book The Defining Decade. “Compared to their twenty-something selves, women are about half as

fertile at 30, about one-quarter as fertile at 35, and about one-eighth as fertile at 40,” Jay writes. Women may proclaim, “30 is the new 20” or “40 is the new 30” as much as they like; biology disagrees. By proposing, presumably marrying, and possibly having children at a relatively young age, Durant demonstrates his down-to-earth realism yet again. Here is no spoiled celebrity who assumes that, because he can afford to be single or a single dad, or because he and his wife could afford expensive infertility treatments, it must be a neutral life policy to eschew marriage and young childbearing. In our culture today, the example of a celebrity is an incentive to fans—and incentives matter. It’s not improbable to say that a young boy who admires KD on the basketball court will be more likely to consider marriage “cool” because Durant has given it his de facto endorsement. Similarly, celebrities themselves are not immune to the incentives of the ambient culture and policy climate. What a shame it would be if we failed to signal to KD that we as a society value his decision to marry! At the very least, we can say, “Congratulations.”

Tina Korbe Dzurisin is a research associate at OCPA. Formerly, she was a staff writer at The Heritage Foundation and an associate editor at HotAir.com.

The Leavitt Report Is Still Obamacare By Jonathan Small

Recently, the consulting firm Leavitt Partners released a report paid for by the taxpayer-funded Oklahoma Health Care Authority (OHCA). Unsurprisingly, the report recommends Oklahoma seek “enhanced federal funding” from the Affordable Care Act’s Medicaid expansion. Proponents have gone to great lengths to avoid the words “Medicaid,” “Affordable Care Act,” “Obamacare,” or other references that might tip off the public that this is a recommendation to implement Obamacare’s Medicaid expansion. This was done due to Obamacare’s unpopularity. In May, a Magellan Strategies’ survey of likely Oklahoma voters found 70 percent agree with this statement: “Because there is so much disagreement among experts on the costs of expanding Medicaid, we shouldn’t rush into any expansion until we have a better handle on the financial consequences.” Proponents of the expansion argue the report’s premium assistance proposal isn’t Medicaid expansion. U.S. Health and Human Services Secretary Kathleen Sebelius and her staff disagree. In recent guidance to states on premium assistance, states were told that “beneficiaries remain Medicaid beneficiaries and continue to be entitled to all benefits and cost-sharing protections. States must have mechanisms in place to ‘wraparound’ private coverage to the extent that benefits are less and cost sharing requirements are greater than those in Medicaid.” The report acknowledges that the proposed expansion population has higher risky behavior rates than average and pegs upfront costs at $850 million (this estimate is understated for its use of a healthy population experience for the estimate). Using Obama stimulus-like math, the report tries to

wipe this sticker shock away by projecting that economic activity generated by federal funds will actually save the state money. Obamacare is breaking promises left and right, yet taxpayers are to believe funding promises will be kept? According to the OHCA, 1,007,356 Oklahomans were enrolled in Medicaid during fiscal year 2012. This is 26 percent of the population. Medicaid covers an astonishing 64 percent of births and 67 percent of long-termcare-occupied bed days in Oklahoma. Nearly 260,000 Medicaid patients used an emergency room last year, visiting an ER 528,264 times at a cost of more than $169 million to taxpayers. Based on last year’s enrollment, accepting Obamacare’s Medicaid expansion (as required in the Leavitt report) would result in nearly 33 percent of Oklahomans on Medicaid. Note: Medicaid spending in Oklahoma already

exceeds total state spending on common education and higher education combined. The Leavitt report’s chief problem is that it largely ignores the major problems in health care: lack of medical price transparency, high costs, and government intrusions in health care, which result in market distortions that put consumers on an uneven playing field with employers and health care providers. The crux of the report is to dump a bunch of money into a health care system that’s still controlled by a black box, especially as it concerns extreme lack of medical price transparency and cost. Sadly, some of Oklahoma’s biggest proponents of the report are working against price transparency. The Leavitt report is still Obamacare. It’s time to fix Medicaid, not expand it, and make it work better for patients, giving them a pathway off the welfare program altogether.

Jonathan Small, C.P.A., is the fiscal policy director at OCPA. He previously served as a budget analyst for the Oklahoma Office of State Finance, a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department.

www.ocpathink.org

Oklahoma’s History with Income-Tax Cuts: A Story of Growth By Jonathan Small and Dave Bond

From 2004 through 2009, Oklahoma’s personal income tax—the amount the state penalizes citizens and job creators for the right to earn a living—was lowered more than 20 percent. Over this period of time, the top marginal rate dropped, in a series of four reductions, from 7.00 percent to 5.50 percent. With each drop in the rate, many individuals and organizations in favor of higher government spending worked against the income tax cuts. They claimed income tax cuts would result in less revenue for state government programs. Even the Oklahoma Tax Commission estimated, with each new income tax cut, that the state would see a loss in revenue. What actually transpired was that Oklahoma saw an increase, both in economic activity and tax revenues, with each of the income tax cuts implemented between 2004 and 2009. Beginning in 2009, Oklahoma did see revenue declines in connection with the national recession, but a stronger reliance on sales tax revenues—due to income tax cuts—helped stabilize revenues compared with many other states.

Tax Cuts in 2005 In 2005, the Oklahoma Legislature passed what was, at that time, the largest personal income tax cut package in state history. The Oklahoma Tax Commission’s official estimate (a static analysis, projecting no economic growth due to cutting tax rates) was that, by fiscal year 2007, the tax cuts would cost the state $150 million. The reality was that, in that time period, individual income tax collections actually grew by

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$305 million, and state sales tax collections grew by $243 million. So, what the Tax Commission estimated, using static analysis, would be a $150 million hole turned into a $548 million surplus for the state. Had the Tax Commission used dynamic analysis in their estimates, those estimates likely would have ended up much closer to what transpired.

Tax Cuts in 2006 In 2006, the Oklahoma Legislature passed the largest personal income tax cut package in state history, to be phased in over a four-year period. The Tax Commission’s official estimate (again, a static analysis) was that, by fiscal year 2007, the tax cuts would cost the state $94 million in lost income tax revenue. Yet state personal income tax collections were over $111 million more in 2007 than the cost estimates by the Tax Commission. Total personal income tax collections for the year actually exceeded by $17 million, the tax collections of the baseline year used to calculate the static reduction. Also, state sales tax collections increased by $112 million. The Tax Commission’s official estimate was that, by fiscal year 2008, the income tax cuts would cost the state $339 million in lost revenue. Yet, state personal income tax collections were over $356 million more in fiscal 2008 than the Tax Commission’s estimates. Total personal income tax collections for the year actually exceeded by $17 million the tax collections of the baseline year used to calculate the static reduction. And state sales tax collections increased again, this time by $235 million.

Consistently Higher Revenues Despite cutting Oklahoma’s personal income tax rate by over 20 percent— from a top marginal rate of 7 percent down to 5.5 percent from 2004 through 2009—state personal income tax collections were never less than the prior year until the recession which took effect in 2009. Some may have forgotten the latter part of 2010, and the first couple months of 2011. The final quarter-percent reduction in the state’s personal income tax rate, which dropped the rate from 5.50 percent to 5.25 percent, was scheduled to begin for fiscal year 2012, and receive formal notification by the state Board of Equalization. At that time, a significant amount of concern was raised about the fact that revenue growth out of the low-revenue years had triggered the reduction. Tax users and their advocates loudly and publicly lamented the impending tax cut and claimed the quarter-percent income tax reduction would lower state revenues by approximately $61 million for fiscal 2012. According to annual net collection data from the Oklahoma Tax Commission, state personal income tax collections were $2,396,668,662 for fiscal year 2011 and $2,692,968,300 for fiscal year 2012. This represents an increase of more than $296 million. State sales tax collections were $1,997,659,460 for fiscal 2011 and $2,190,600,218 for fiscal 2012. This represents an increase of more than $192 million. In a year with the lowest top state personal income tax rate (5.25 percent) since income tax cuts began in 2005, the state set a record for net state sales tax collections and even managed to

Coburn and Jindal: Fix Medicaid, Don’t Expand It By Jonathan Small

OCPA has repeatedly made the case that Oklahoma should reform Medicaid, not expand it. And we’re not alone. Former OCPA trustee Tom Coburn is a U.S. Senator and a physician who has cared for thousands of Medicaid patients. Louisiana Gov. Bobby Jindal, a former member of Congress, is the former secretary of Health and Hospitals for Louisiana. In a recent article titled “Fix Medicaid, Don’t Expand It,” Dr. Coburn and Gov. Jindal wrote: Medicaid was designed to be a safety net for certain low-income Americans with special needs — mothers and children and the longterm aged, blind, and disabled — not an entitlement program for Americans with the means to make reasonable contributions to the cost of their coverage. … President Obama is fond of invoking a call to fairness when advocat-

ing for his policies. We would challenge him to apply that same test to his Medicaid expansion and answer the following questions: Is it fair that under an expanded Medicaid program, the federal government would pay a greater portion of the Medicaid dollar for an adult with no children above poverty, than for a single mother with children who live in poverty? Is it fair to expand a program that allows an individual to own a Lexus and qualify for a long-term-care benefit because Medicaid allows the exclusion of one vehicle regardless of value? Is it fair for this Congress and Administration to promise benefits from an expanded Medicaid program that soon will demand either dramatically higher taxes, significant benefit cuts, or both?

Is it fair to claim short-term political and financial gains from expanding Medicaid, while socializing the negative impacts of crowding out private coverage and delaying or denying care to the neediest citizens?... Even if the federal government has good intentions, the money just isn’t there. And make no mistake; states already face substantial budgetary pressures from Medicaid. Under the status quo, Medicaid spending will continue to consume nearly a quarter of every state dollar, passing education as the largest state budgetary commitment. Increased Medicaid spending will further crowd out other state spending and make the fiscal outlook for states even worse. I encourage you to read the entire article by visiting http://tinyurl.com/ ma4rtme.

make a record deposit to the “Rainy Day Fund”—all after the state personal income tax rate had been cut yet again.

by $1.4 billion. Though state personal income taxes were cut, state tax collections grew by $883 million from fiscal years 2011 to 2012. Furthermore, this growth occurred at the same time that natural gas prices—and resulting state tax revenues from natural gas production—dropped significantly.

taxes work, and they are working in Oklahoma and impacting the region. Whether letting citizens have more control of the fruits of their labor has an immediate impact on revenues is not the highest priority. The highest priority is letting citizens have more control of the fruits of their labor. Period. Oklahoma has proven that when a state does so, it can result in a dependable growth effect on the state’s economy.

SalesTax Collections Increase Since Oklahoma’s reductions in the personal income tax rate began in 2005, net state sales tax collections have increased by more than $694 million, even with periods of volatile energy prices. In the eight years preceding these state personal income tax cuts, the sales tax growth rate was 3.97 percent. In the eight years since state personal income tax cuts began, the sales tax growth rate was 5.80 percent, during a period that included both volatile energy prices and an economic decline that some have described as the worst since the Great Depression. According to Oklahoma’s Certified Annual Financial Report from the Office of State Finance and Tax Commission, total state tax revenues increased by $605 million from fiscal year 2010 ($6.3 billion total) to fiscal year 2011 ($6.9 billion total), and $883 million from fiscal year 2011 to fiscal year 2012 ($7.7 billion total), exceeding fiscal 2010 levels

Conclusion Pro-growth policies such as Right to Work (which Oklahoma implemented in 2001) and cutting income and death

Dave Bond is OCPA’s director of external relations. He previously served as director of the Republican State House Committee and worked at the Oklahoma House of Representatives in media and communications. He is a graduate of Oklahoma State University.

www.ocpathink.org

@OCPAThink 1. Author and filmmaker Dinesh D’Souza recently visited OCPA. To see Jonathan Small’s conversation with D’Souza, go to www.ocpathink.org/articles/2379. 2. OCPA’s Brian Bush and students participating in this year’s Four Star Leadership Program partnered with Central Oklahoma Habitat for Humanity on June 17. 3. On June 16 the OCPA road show was in Broken Arrow, where Michael Carnuccio discussed the Oklahoma policymakers’ opportunity to phase out Oklahoma’s income tax.

4. OCPA’s Dave Bond and an Ardmore Rotary Club member discuss pension reform after Michael Carnuccio’s talk on June 26. 5. In August OCPA launched its newest center, the Agricultural Center for Markets, Policy, and Property Rights. Professor Jayson Lusk, pictured here in a June 6 appearance on the John Stossel program, will serve as the Samuel Roberts Noble Distinguished Fellow at OCPA. Dr. Lusk, an agricultural economist at Oklahoma State University, has published more than one hundred articles in peer-reviewed journals on topics related to consumer behavior and food marketing and policy. His new book is The Food Police: A Well-Fed Manifesto About the Politics of Your Plate (Crown Forum, 2013). State Policy Network (SPN) is made up of free-market think tanks—at least one in every state—fighting to limit government and advance market-friendly policies at the state and local levels. OCPA will host this year’s annual meeting and celebrate “Oklahoma Night” on Wednesday, September 25. SPN For more information or to be involved in Oklahoma Night, please contact Karma Robinson at (405) 6021667.

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QUOTE UNQUOTE “I’m not an ordained minister, I’m not a theologian, but these guys are going to hell.”

Lily Eskelsen Garcia, vice president of the National Education Association, speaking of lobbyists and elected officials who oppose gun-control legislation

“The collection of any taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare, is only a species of legalized larceny.” Calvin Coolidge

“Do me a favor, and look at Detroit. Look at the failure of all the compassionate nostrums. Look at the collapse of real integrity. Look at the grasping and demented idiocy of the unions. Look at the abandonment of government’s true functions. Look at the wreckage of human lives. Look at the ruin of a once great city. Look at what aching greedlust does. Behold the handiwork of your compassion.” Author and pastor Douglas Wilson

“Turn Detroit into a national “14.5” park, to show our kids the The percentage of its active members the wonders of ‘Government Help.’” Oklahoma Education Association has lost in the Blogger David Burge

last three years

“With unemployment rates among college graduates rising, the well-regarded reputation of higher education in the United States teeters precariously between relevance and irrelevance.” Dr. Bill R. Path, president of the Oklahoma State University Institute of Technology

“We know the statistics—that children who grow up without a father are five times more likely to live in poverty and commit crime, nine times more likely to drop out of schools, and 20 times more likely to end up in prison.” Senator Barack Obama in 2008