In Case You Missed It Dr. Tom Coburn says government regulations and industry practices have played a large part in creating the opioid crisis. bit.ly/CoburnOnOpioidCrisis
The state’s largest newspaper says Oklahoma’s school-choice tax credit program is providing value to students and to the state budget. ocpa.co/OKTaxCreditScholarship
OCPA president Jonathan Small told Governing magazine that Oklahoma lawmakers haven’t done enough to make agency spending more efficient. ocpa.co/Small-GoverningMag
A teacher at Tulsa Memorial High School supports teacher pay raises but says “raising taxes drives away the very jobs Oklahoma needs.” ocpa.co/TeacherOnTaxes
Bullied Oklahoma students are utilizing school-choice options. ocpa.co/SchoolChoiceHelpsBullying
Mitch Daniels’s “Purdue Miracle” provides lessons for Oklahoma. ocpa.co/PurdueMiracle
Republican leaders, once they won complete control of Oklahoma’s state government, always intended to reduce higher education appropriations to sensible levels. ocpa.co/Last-In-Line
The Millwood superintendent says student test scores in a math class taught by an “emergency” certified teacher are higher than in the same class taught by a traditionally certified teacher in the school. ocpa.co/EmergencyCertified
PERSPECTIVE
Is Congressman Tom Cole blocking TSET reform? He won’t say. ocpa.co/TSETscrutiny
Dr. Tom Coburn says earmarks are inherently corrupt. ocpa.co/CoburnOnEarmarks
An analyst at the Heartland Institute says fracking is not the cause of Oklahoma’s increases in induced seismicity. ocpa.co/HeartlandInstitute
Brandon Dutcher, Editor
OCPA Trustees
OCPA Researchers
Glenn Ashmore • Oklahoma City
Thomas Schroedter • Tulsa
Robert D. Avery • Pawhuska
Charles M. Sublett • Tulsa
Lee J. Baxter • Lawton
Robert Sullivan • Tulsa
Douglas Beall, M.D. • Oklahoma City
William E. Warnock, Jr. • Tulsa
Affairs, Inc., an independent public
Susan Bergen • Norman
Dana Weber • Tulsa
policy organization. OCPA formulates
John A. Brock • Tulsa
Molly Wehrenberg • Edmond
David Burrage • Atoka
Daryl Woodard • Tulsa
Perspective is published monthly by the Oklahoma Council of Public
and promotes public policy research
William Flanagan • Claremore
and analysis consistent with the
Josephine Freede • Oklahoma City
principles of free enterprise and
Ann Felton Gilliland • Oklahoma City
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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Tina Dzurisin Research Associate Trent England, J.D. Dr. David and Ann Brown Distinguished Fellow for the Advancement of Liberty J. Scott Moody, M.A. Research Fellow Andrew C. Spiropoulos, J.D. Milton Friedman Distinguished Fellow Wendy P. Warcholik, Ph.D. Research Fellow
John A. Henry III • Oklahoma City Robert Kane • Tulsa Frank Keating • Oklahoma City Gene Love • Lawton Tom H. McCasland III • Duncan
EMERITUS BOARD
David McLaughlin • Enid
Blake Arnold • Oklahoma City
J. Larry Nichols • Oklahoma City
Steve W. Beebe • Duncan
Lloyd Noble II • Tulsa
David R. Brown, M.D. • Oklahoma City
Mike O’Neal • Edmond
Paul A. Cox • Oklahoma City
Andrew Oster • Edmond
John T. Hanes • Oklahoma City
Larry Parman • Oklahoma City
Henry F. Kane • Bartlesville
Bill Price • Oklahoma City
Lew Meibergen • Enid
Patrick T. Rooney • Oklahoma City
Ronald L. Mercer • Bethany
Melissa Sandefer • Norman
Daniel J. Zaloudek • Tulsa
OCPA president Jonathan Small
OCPA chairman Larry Parman
Building a State By Larry Parman and Jonathan Small
In 2018 much of the focus in the state Capitol building will be on building a budget. But in this issue of Perspective, we urge policymakers to remember the larger imperative: building a state. There are two bedrock issues which are absolutes in building a great state: a dynamic economic environment that creates highpaying jobs, and an excellent education system that stresses rigor, prepares our students for international competition, and respects a parent’s right to decide the best education pathway for his or her child. Without these, nothing else matters. Yet, tax consumers push to grow government and demand an increase in public spending. For years, even decades, government has commanded “just give us more money”—and “okay” was the only acceptable answer. In a strong economic environment, that might work. When revenues are increasing, no one puts a microscope on spending to see if it meets the “spend it wisely” test. Old habits are hard to break. Even during the past few years, with the Oklahoma economy in decline, few leaders paused to ask, “What better outcomes will taxpayers receive in exchange for giving government more money?" No one wanted to tackle the hard work of reform. Instead, in many cases, politicians abandoned their campaign promises and turned to the easy path—tax increases. It’s difficult to build a great state when the narrative, even from professed conservatives, is that “we have a revenue problem.” These policymakers aim to solve the problem by force: tax increases. This is like a business going to its customers, notifying them of their money-losing operation, and forcing them at gunpoint to pay more or to buy more products. We’re told “there’s nothing else to cut.” That may be true in some agencies, but our experience, research, and recent revelations in the Oklahoma State Department of Health suggest otherwise. What serious person now believes we have done all we can do to eliminate waste and inefficiency? Cutting spending requires the hard work of executive leadership and legislative oversight. It requires a relentless pursuit of carving out marbled waste within the meat of each agency. In other words,
at some point you have to govern. Families do it. Businesses do it. To maintain the trust of taxpayers, government must do it. Continuously. Both of us having worked in state government, we know full well that there is ample opportunity to find savings. That’s what conservatives are supposed to do. One dollar of waste and inefficiency saved is a dollar of new revenue not required. Take education, for example. We continue to fund an underperforming, heavily unionized system that employs more non-teachers than teachers. We spend on average $9,781 per student per year—that’s well over $100,000 for a student’s K-12 education—and yet the majority of Oklahoma students lack proficiency in all but one subject area! That is a broken promise to our children and an unacceptable return on taxpayer investment. Incredibly, some policymakers continue to heed the call of education producers for “more money” without reform. But more money—without reform in exchange—will not markedly improve student performance. It will only create a larger ineffective system. Shameful. Recent media articles reveal the misguided policies of Illinois, Connecticut, California, New Jersey, and others. Politicians in those states fell for the siren song of “just give us more money” and continued to raise taxes. Now those states face declining economies, loss of their credit rating, population migrating to other states, and pension systems that are broke. By the way, those states have per-pupil common education funding that ranks among the highest in the country, yet student outcomes remain stagnant. It’s time to build a smarter, more prosperous state served by a lean, efficient government. It’s time to look at modifying our tax structure so we tax work less in exchange for taxing consumption more. It’s time to focus on prioritizing core services. It’s time to eliminate the crony giveaways that siphon revenue from state coffers. We encourage our political leaders to think beyond balancing a budget and to remember they are building a state.
By Byron Schlomach
Reform the Budgeting Process Oklahoma needs greater transparency, an all-funds budget, and a streamlined revenue-estimation process.
The budget process for a state is more than simply putting numbers on a ledger, and far more than making comparisons to what was spent last year in order to adjust for inflation and provide for the same amount of services the next year. Truly conscientious government budgeting involves constant oversight, constant re-evaluation, and constant rethinking and redesign. Government budgeting is about setting hardnosed priorities in light of the fact that taxpayers, whose earnings are being forcibly taken from them to fund the budget, have their own priorities, ambitions, and needs independent of anything government does. Budgeting is about making tough choices, sometimes canceling old programs, sometimes funding new ones, but always making sure money is spent to gain maximum efficiencies and effectiveness for purposes only government can truly fulfill. Budgeting in a government context is critically different from a business context. Businesses are disciplined by the need to meet the desires and needs of consumers who voluntarily, not forcibly, give up their funds for something businesses produce. Consumers vote with dollars, literally all hours of every day. Markets are far more democratic than our “democratic” form of government. Businesses must be lean (efficient) and competitive (effective) in order to please consumers. No such discipline controls government. We have elections periodically where often a minority of voters choose representatives, not specific services, that they favor. Most agencies of government are highly insulated from the taxpayers who foot the bill. Most “customers” of our schools, universities, and health agencies, which consume the lion’s share of the state’s budget, do not come close to paying enough in taxes to cover the cost of the services they receive. All of this is to say that the budget process in government matters. But budget process is a very broad term. It includes who actually participates in budgeting, who possesses full information about agencies’ processes and performance, and who is privileged to provide information directly to those writing a budget. Budget process includes whether or not all
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funds are considered in budgeting or whether only a fraction of funding is budgeted while the rest is on some sort of autopilot. It also includes whatever constraints budgeters face that are imposed constitutionally and by tradition. Having witnessed budgeting in three states, Texas, Arizona, and Oklahoma, I find three issues that stand out as areas for potential improvement in Oklahoma’s budget process. These include greater transparency, an all-funds budget, and a streamlined revenue estimation process. The state has a transparency website (openbooks.ok.gov) that has the potential to offer some much-needed information. However, while it has some good narrative information regarding specific processes and particular funds, when it comes to specific financial information about agencies, the website simply does not work (at least in this author’s experience). What’s more, it is agency-oriented, not programoriented. Arizona has a 1,000-page “Master List of Programs” published biennially by the Governor’s Office of Strategic Planning and Budgeting. This document comprehensively lists every program administered by the state, by agency, with financial information. Texas's current and historical appropriations bills, which include high-level program information, are easily found online without having to do a clunky bill search that requires knowing just the right terms to use. Oklahoma’s transparency consists of disconnected sources organized in ways that make little sense, which do not allow one to get a sound overview at the state or agency levels, and which provide for so many avenues of inquiry that information can hide in plain sight. Real transparency (both for interested taxpayers and researchers with online resources) and complete information provided to legislators would not result in an agency in arrears by $30 million after spending money in an unauthorized manner for years. Oklahoma’s financial information is far too compartmentalized and too limited to the few rather than the many. Limited information availability is a major reason that a
state’s appropriations act should reflect expenditures from all funds, not just general revenues. As of 2015, the state’s appropriations act reflects expenditures from both dedicated funds (whether dedicated by statute or by the constitution) and federal funds as well as general funds. Sound decisions on how to allocate general funds cannot be made without being fully informed about how other funds are spent. However, the legislature has the duty to exercise oversight in how dedicated and federal funds are spent, a mindset that does not appear to have fully developed so far. There are even more benefits from comprehensive budgeting. One is that agencies are far more responsive to the legislators when the legislature says, “Sure, you can receive that money, but you can only spend it with our express yearly permission.” However, the legislature has to mean this. So far, it seems to have only made a change in the budget’s appearance. What’s more, some federal funds have some limited flexibility in how they can be spent, and the legislature can have a say. In this way, federal funds can help to solve budget crises. Finally, Oklahoma’s revenues are estimated by a committee called the Board of Equalization. This really means that
TOTAL OKLAHOMA STATE GOVERNMENT SPENDING (IN MILLIONS OF DOLLARS)
revenues are estimated by individuals within the government’s bureaucracy whose estimates are then given legitimacy by the Board of Equalization. This system results in no one person or organization being held responsible when actual revenues turn out less rosy than predicted. Instead of an unaccountable revenue-estimating system, the state’s constitution should be amended to give the responsibility of creating a legally binding revenue estimate to a single elected office that is not directly involved in the appropriations process. In this state, the most appropriate office is the state treasurer. In so doing, when it comes to revenue estimates, everyone would know exactly whom to hold accountable. Accordingly, revenue estimates will be uniformly conservative and the state would be less likely to find itself in unexpected financial difficulty. Byron Schlomach (Ph.D. in economics, Texas A&M University) is director of the 1889 Institute, an independent research organization. He is a scholar in residence at the Institute for the Study of Free Enterprise at Oklahoma State University. He previously served as director of the Center for Economic Prosperity at the Goldwater Institute, and prior to that was chief economist for the Texas Public Policy Foundation.
Source: Oklahoma Office of Management and Enterprise Services, Comprehensive Annual Financial Reports
Data are adjusted for inflation using 2016 dollars.
www.ocpathink.org
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By Jonathan Small
TO PRESERVE AND BUILD UPON THE LEGACY OF D R . D AV I D & ANN BROWN
Joining OCPA’s David & Ann Brown Legacy Society is a way to invest in the freedom of future generations while decreasing your tax liability. To learn more, contact Rachel Hays at rachel@ocpathink.org or by calling (405) 602-1667.
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PERSPECTIVE January/February 2018
Know the Facts on SQ 640 Some Oklahoma lawmakers are looking to wage war against SQ 640, claiming it confines government by making any revenueraising measures impossible to pass. But that’s not true. If you want to regulate speech, you belittle the First Amendment. If you want to confiscate guns, you vilify the Second Amendment. In Oklahoma, if you want to reach into taxpayers’ wallets for more cash, you denounce the constitutional protections established by State Question 640, which was approved by voters in 1992. In case some forgot, 640 is that annoying rule on revenue-raising measures. With it, voters took back some of their power. The measure first calls for Oklahoma voter approval on tax increases. Or, alternatively, the Legislature could pass tax increases with a supermajority of at least 75 percent in each chamber. For working Oklahoma families, 640 offers some protection from the threat of constant tax increases. Before it passed, simple majorities easily raised taxes without concern for Oklahoma’s economy. For example, House Bill 1017 passed in 1990, which raised taxes by more than $200 million. If history doesn’t necessarily repeat itself, it echoes. Look at where we are today. We have a downturn in Oklahoma’s oil and gas economy, and a state government frantically searching for more than $200 million to spend instead of making tough choices. As you might expect, some lawmakers are now looking to wage war against 640. They claim it confines government by making any revenue-raising measures impossible to pass. But that’s not true. In 2009, 2010, and 2011, legislators organized bipartisan supermajorities to pass bills that raised some $224 million in new annual state funds and $268 million in annual matching federal dollars. Press releases from the executive branch, Board of Equalization reports, and legislative budget summaries show that the 2015, 2016, and 2017 legislative sessions combined to annually increase revenue for appropriation by more than $500 million. Moreover, Oklahoma has raised personal income tax rates, cigarette taxes, gaming taxes, and authorized a state lottery (a tax on the poor) since 640 was adopted by voters. So mostly during Republican majority control, annually recurring revenues were raised more than $724.7 million. Oklahoma’s budget issues stem from two causes—an extended recession that hit the oil and gas industry and the failure to address the inefficient structure of government. When times are tough, state government must do everything possible to adjust spending to match income, just like the rest of us. When we easily give government more money, it finds a way to quickly spend it. Then, it returns next year asking for more. Oklahoma taxpayers are grateful to have 640 in the books. Lawmakers should respect taxpayers instead of waging war against 640.
By Tom Newell
To Help Needy Oklahomans, Implement Medicaid Audits If robbers pulled off a $19 billion heist, the story would be on the front page of every major news source. Unfortunately, a similar scheme occurs every year—and few people are talking about it. Annually, billions of dollars are lost—and stolen—from taxpayers and the truly needy through spending on ineligible Medicaid recipients. Some of the dollars are lost through outdated systems and auditing practices by the state, others through blatant fraudulent and criminal behavior. But this massive fraud can be prevented. In Oklahoma, more rigorous auditing of Medicaid rolls could save taxpayers an estimated $86 million each year, preserving money for education, public safety, infrastructure, and the truly needy. And states that have implemented this bipartisan reform have seen just that. Within 10 months of implementing more rigorous auditing procedures to check Medicaid eligibility, Pennsylvania identified more than 160,000 individuals who were receiving welfare benefits despite being deemed ineligible. When those individuals—including millionaire lottery winners and individuals in prison—were removed from the rolls, taxpayers saw nearly $300 million in savings before the end of the program’s first year. Illinois followed Pennsylvania’s lead with its own programintegrity initiative, bringing in a third-party vendor to verify income, residency, and other eligibility criteria of the state’s Medicaid enrollees. By the end of the first year, more than 300,000 individuals found to be ineligible had been removed from the program. In the second year, the state removed an additional 400,000 individuals. And while state officials had projected that the initiative would save taxpayers nearly $350 million per year, based on the success of the program, actual savings was estimated to be between $390 and $430 million each year. Medicaid audits do not remove deserving recipients from Medicaid rolls. Instead, these audits use enhanced tools and existing state data to verify an enrollee’s income, residency, and more. These factors are frequently monitored to ensure enrollees are still eligible for benefits; if they are found to no longer be eligible, they are removed. Also removed are those individuals found to be abusing the system through welfare fraud. The importance of up-to-date auditing and eligibility checks for Medicaid recipients is underscored by the fact that Medicaid, like most social welfare programs, relies on self-reported data. Potential enrollees are supposed to report accurate data in
income, residency, identity, employment, and other factors—and are supposed to report any subsequent changes to these factors. But relying on self-reporting is like asking a bank robber to pay taxes—it’s frequently a recipe for disaster. In a recent audit, one state found that 93 percent of all eligibility errors were due to enrollees not reporting information or reporting incorrect information. In Michigan, more than 7,000 lottery winners were still collecting welfare benefits. In Illinois, more than 14,000 dead people were found on the Medicaid rolls—sometimes for decades after they died. And in Arkansas, more than 20,000 Medicaid enrollees had high-risk identities, meaning many were using fake or stolen social security numbers. These audits will not only mean an end to fraudsters, but they ensure that deserving Oklahomans remain on the Medicaid rolls—and that the funds are there to provide for them. There are some who do not think Oklahoma needs more stringent Medicaid audits. These people choose to believe that this fraud isn’t occurring within our state. But I assure you, it is. It’s happening everywhere. According to data from the U.S. Department of Health and Human Services, nearly 10 percent of all Medicaid spending is improper. Given that Medicaid is the single largest line-item in states’ budgets, that 10 percent represents a massive amount of money. And it’s money that cannot be spent on critical public services like education and public safety—services that are vital to Oklahoma’s success. Unfortunately, the reality of Medicaid fraud reaches beyond stolen money from public services. When money is being spent on criminal behavior, less funds are available for those who truly rely on Medicaid services to survive. The truly needy suffer the most at the hands of Medicaid fraud. By not implementing rigorous audits to check eligibility, we are turning our backs on our most vulnerable neighbors. In Oklahoma today, one in four citizens receive some sort of Medicaid benefits. Rigorous, frequent audits to check eligibility will help prevent fraud and misuse, and will better preserve resources for public services and needy Oklahomans. We owe it to the taxpayers and the truly needy to conduct audits to ensure these benefits are going to people who need them. Tom Newell is a senior fellow at the Foundation for Government Accountability. A former member of the Oklahoma House of Representatives, he served as chairman of the Government Oversight and Accountability Committee and vice chairman of the Appropriations and Budget Committee.
www.ocpathink.org
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By Andrew Speno
Enact Criminal-Justice Reform Thailand is a third-world country notorious for human rights abuses and a corrupt criminal justice system. So it should not come as a surprise to learn Thailand puts more women behind bars per capita than any nation on earth. Oklahoma, however, incarcerates women at double the rate of Thailand. Our female incarceration rate is not just the highest in the U.S., it’s the highest on the planet.
Consider County Home Rule Option For a state our size, Oklahoma has a lot of counties. These local governments bear the burden of much of our criminal justice and transportation systems. The current structure of county governments seems to work well for most, but may fall short of the needs of the state’s largest counties. The State of Oklahoma should grant the people, within the largest counties at least, more flexibility in how to organize county governments. This policy of “home rule” could help make one of the layers of government that is closest to the people more competent to deal with challenges like criminal justice reform. —Trent England
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How did we end up here? “Tough on crime” policies of the late 20th century, meant to address rising levels of crime during that time, seemed logical: If people knew they would face long sentences for most crimes, they would stop their behavior. However, that theory does not pan out in reality. Study after study has shown that more people in prison does not mean safer streets, and long sentences for low-level, nonviolent offenders does not deter crime. In many cases, it can have the inverse effect. It’s time for conservatives in Oklahoma to embrace criminal justice reform, not because we want to coddle criminals, but because we demand effective returns on public safety when we spend public dollars. That is the idea behind the “Right on Crime” initiative, and it’s why many prominent national conservatives have signed onto the group’s statement of principles. Oklahoma’s corrections system is broken and financially unsustainable. Projections show that our prison population will increase by 25 percent over the next nine years, even when accounting for State Questions 780 and 781, ballot measures which were approved in 2016. The Oklahoma Department of Corrections has submitted a budget request for $800 million to build two new prisons, with an additional $55 million needed every year for operating costs. However, at our current rate of inmate population growth, Oklahoma will actually need three new prisons within the next nine years. The urgency for reform comes from the fact that the $800 million must be allocated in this budget session. If the legislature fails to act, we will immediately compound our
current budget crisis by an additional $800 million. Fortunately, lawmakers can still avert disaster before the sand runs out of the hourglass. Five reform bills which were produced by Governor Fallin’s Criminal Justice Task Force, but ultimately not passed in 2017, would have produced a net decrease in our inmate population over the next 10 years. The bills include provisions for early release of nonviolent inmates, reducing mandatory sentencing for low-level drug possession and property theft, and providing alternative sentencing for nonviolent crimes. On a positive note, the five reform bills ended with a “Conferees Do Not Agree” report in the House Judiciary Committee, meaning the bills are eligible to be heard within the first week of the 2018 legislative session. Leadership should take this opportunity to enact policies proven to work in other conservative states such as Texas, Georgia, and Mississippi. Texas, in particular, has implemented similar reforms, and the results have been a resounding success. Since passing landmark reforms beginning in 2007, Texas has closed eight corrections facilities. They averted spending billions of taxpayer dollars and public safety has improved. These reform bills should be the first step toward criminal justice reform, not the last. Problems facing Oklahoma are systemic, and lawmakers must address issues on multiple levels if we expect a long-term solution. Reforms to Oklahoma’s probation system— currently run by prosecutors’ offices (who have a financial incentive to prosecute) rather than by the Department of Corrections—are greatly needed, as are necessary changes to expedite pre-trial release for nonviolent defendants. By coupling these reforms with genuine community-based supervision, we can significantly reduce our recidivism rate, thereby saving taxpayers millions of dollars. Our priority must always be public safety. It’s why we have a criminal justice system in the first place. But we have a rapidly closing window of opportunity to duplicate the success of Texas and other conservative states before painful fiscal realities begin asserting themselves. Oklahoma needs conservative criminal justice reform, sooner rather than later.
Three Important Judicial Reforms Oklahoma’s Supreme Court district boundaries have not changed since the 1960s. While people have moved around, those lines have stayed the same for half a century. This isn’t merely unfair—it also hurts the quality of our judiciary for basic reasons described by James Madison. In "The Federalist Papers," Madison explains that a benefit of selecting government officials from a larger population is that the odds of finding more talented people get better. This becomes even more important when seeking someone with special training and experience. There are only so many lawyers, and not just any lawyer can make a good judge. To maximize the potential quality of future Oklahoma Supreme Court justices, the lines at least need an update. Even better would be to select some Justices from anywhere in the state (“at large” is the term often used). A bill to update the districts had bipartisan support last year, but the House and Senate still need to agree on a version to send to the Governor. Another important reform would be to eliminate the power of the Judicial Nominating Commission (JNC) to blackball potential judges. This would take an amendment to Oklahoma’s Constitution, but would be well worth it. The Governor, like the President of the United States, should have the power to nominate judges without an unelected commission artificially limiting the choices. The JNC could still advise the governor and vet candidates to ensure they meet legal requirements. Finally, the Oklahoma Senate should have the power to confirm or reject these appointments. All this would make judicial nominations a part of gubernatorial and state Senate campaigns. In other words, this reform would give Oklahoma voters some say in how judges are selected. —Trent England
Andrew Speno is the Oklahoma state director for Right on Crime (www.rightoncrime.com), an organization which advocates for conservative criminal-justice reform.
www.ocpathink.org
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By Jonathan Small
School Serves Children of Incarcerated Parents What challenges do children with parents in prison face? Ask Robin Khoury, founder and director of Little Light Christian School in Oklahoma City: “Shame. Grief. Anxiety. Post-traumatic stress disorder. Poverty. Attention deficit or hyperactivity. Attachment disorders. And a wide range of behavioral issues.” Which is why Khoury and Little Light’s supporters have made those kids their specialty. Each day this school year, 29 children from ages 4 to 14 report to the Little Light campus in northeast Oklahoma City—ironically, just across the street from the headquarters of the Oklahoma Department of Corrections—for an 8 to 5 regimen of learning and nurturing. For Khoury and her husband and staff, Little Light has become a lifelong mission. But it’s not one they arrived at overnight or from their business background in the restaurant and building industries. In 1990 they made a decision to home school their two sons. One day Robin was struck by a blinding vision: “Someday you are going to have a school for poor kids who didn’t have the opportunities my kids did.” Khoury later began volunteering with a prison ministry that targeted incarcerated women, and as part of that program she attended a symposium on what happens to the children of those women sent to prison. “They are seven times more likely to wind up in prison themselves,” she said. “In many cases they are being raised by grandparents or other relatives, often moving from place to place.” Khoury was determined to give them a place. Little Light’s stated mission is “to break the cycle of incarceration in Oklahoma.” Little Light Christian School was founded with the support of Lone Star Baptist Church near Edmond, which became its first home. It opened its doors there with six students in 2012. Today it receives steady support from several other churches and the Jasco Giving Hope Foundation, which this year provided the funds to purchase a school formerly used to serve autistic children in northeast Oklahoma City. Little Light moved there at the beginning of the 2017 school year. Donors who help keep the school thriving and growing are encouraged to pledge up to $84 monthly or give a one-time donation of $5,000 to become “Little Light Dream Builders.” The school accepts no government funds.
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Students are charged no tuition or fees and receive both breakfasts and lunches each day, plus a weekend take-home food package, since as Khoury notes, “they are getting 75 percent of their nutrition from us.” The school operates vans to transport students within a ninemile radius, and daily after-school programs keep them on campus during the “latchkey kid” hours in late afternoons. Little Light offers cooking, archery, crafts, and even a chess club after school hours. Student-teacher ratios are kept low to allow plenty of individual attention and instruction. Grants and donations fund all ongoing costs, including the salaries of 16 staff members, some of whom are former public school teachers who sought a more meaningful mission. The school is openly Christian, with daily Bible classes and weekly chapel. Volunteers also provide music and arts and crafts programs. As Khoury notes, public schools and most other private schools are not well equipped to address the unique issues faced by children whose parents are in prison, often after long-term addiction with the outriders of abuse and neglect that so often accompany such pathologies What are the results? Since many students arrive at the school with poor, and often nearly non-existent, academic records, progress is often slow. But as Khoury notes, “our students are our best advertisement. People see the positive changes in them after a while.” Little Light has boasted enrollment numbers as high as 40 and is gradually expanding grade levels to cover up to fourth grade
Create Scholarships for Children of Incarcerated Parents Oklahoma has an important private-school voucher program, the Lindsey Nicole Henry Scholarship Program for Children with Disabilities. The program, enacted in 2010, is helping teenage students who are battling addiction, bullied children who contemplated suicide, rural students who want a faithbased education, autistic students, and many more. In 2017, policymakers expanded the eligibility for this scholarship program, formerly limited to special-education students, to include children in foster care (a 2015 OCPA recommendation) and children adopted out of state custody.
this year, with the middle school, and eventually the high school, years an ultimate target. The Little Light kids wear matching khaki pants and blue shirts. They appear well behaved to campus visitors, although Khoury said that good behavior is often hard won for some of the kids who arrive with serious behavioral issues. “I tell them there are 10 other kids waiting for a place here,” she said. “They can take responsibility for good behavior or leave.” Perhaps Little Light’s key to success is summarized in a statement by Khoury—“we remove the shame factor”—and a story she likes to tell of a small boy who arrived at the school virtually mute. He sat silently for the first few days and then one day began to “howl and cry,” she recalled. “He kept screaming, ‘My momma is in prison!’ After a moment another boy went over to him and put his arm around him and said, ‘ It’s okay, my daddy’s in jail too.’” Khoury keeps a poster that crying boy made in her office. It bears the repeated plea, “God please help my Mom.” The boy has moved away with relatives and no longer attends Little Light, but she said she keeps in touch with him and family and has learned that he is doing well and testing at grade level in public schools. Mike Brake is a journalist and writer who recently authored a centennial history of Putnam City Schools. He served as chief writer for Gov. Frank Keating and for then-Lt. Gov. and Congresswoman Mary Fallin, and has also served as an adjunct
Building on the program’s success—and with an eye toward breaking the intergenerational cycle of incarceration— lawmakers in 2018 should create a new program providing scholarships for the children of incarcerated parents.
Give School Districts Flexibility to Raise Teacher Pay Oklahoma’s education system is enjoying near-record revenues. Unfortunately, as OCPA’s education data tool makes clear (www.ocpathink.org/ education-data), too much of the money is cordoned off in silos. Thus we end up with unfortunate scenarios like what’s going on in Catoosa Public Schools. Citing a lack of funding, Catoosa went to a four-day school week. Yet at the same time the district bought MacBook computers for all middle-school and highschool students and built a $1.5 million press box at the high-school football field. Removing the chains that keep some of the billions of taxpayer dollars locked in various accounts could open the door for a significant boost in teacher pay. —Brandon Dutcher
instructor at OSU-OKC.
www.ocpathink.org
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By Greg Forster
Relax School Regulations In Oklahoma and across the nation, we’ve been trying to improve education by tightening regulations on schools. The 1889 Institute recently published a database of mandates that Oklahoma public schools have to follow, and it’s a mind-boggling experience. The irony is that better educational results actually come from giving more freedom and responsibility to schools, principals, and parents—which means relaxing central control. This question of whether schools are overregulated is especially important in Oklahoma in light of the alleged teacher shortage. There has been a large increase in the number of teachers hired via exceptions to the standard certification system—exceptions that are labeled “emergency certifications” by hysterical people on both sides, and by cynics seeking to exploit hysteria. The question is whether to spend huge amounts of money (that taxpayers don’t have) to try to prop up the certification system, or admit that the certification system is dysfunctional because our schools are overregulated. Whenever anyone dares to suggest that schools should not be strangled to death by arbitrary and educationally fruitless overregulation, the people who gain power by regulating schools immediately shriek “deregulation!” and “unregulated schools!” They create the false impression of a strict binary choice between the status quo and chaos. Either we let them keep
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100 percent of their power over schools, or we loose the tide of mere anarchy upon the world. But we don’t have to abolish all state oversight to see that schools are now laboring under a smothering burden of rules and mandates. The question is not whether we will ask nothing of our schools. The question is whether we have benefited or harmed schools by pursuing centralized regulation and control as the primary path to educational improvement. In the past generation, there have been two successful movements in education reform. Both these movements arose from the failure of earlier reform efforts that were focused on increasing resources, staffing, pedagogical research, and other “inputs” to the school system. For decades, we greatly increased spending, reduced student-teacher ratios, and brought many promising new ideas to schools. Spending per student doubled, then doubled again, even after inflation. And these very expensive reforms produced no net effect on educational outcomes. Of course, the clamor for more inputs has continued unabated – from those who benefit from the inputs. But by the 1990s, real reformers had concluded that if inputs did not have much relationship to outcomes, inputs were not the problem. The system needed overhauling at a deeper level. Two strategies emerged. The more
prominent strategy, the one that got the most attention and funding, was toward greater centralized control. If schools are given more inputs and they fail to use them to produce better outcomes, then the schools are clearly working to enrich themselves. They can’t be trusted to carry the ball for fixing education. Who could be trusted? Why, the reformers, of course. So they set about taking more and more power into their own hands, creating mandate after mandate and regulation after regulation for schools to follow. This, of course, necessitated the creation of a large and very powerful central authority to enforce the regulations. This has been most noticeable at the federal level, but there has also been a dramatic centralization of power in the states as well. This is not to say that the whole overregulation problem stems from this recent movement. Schools were already overregulated before the 1990s. This was partly a legacy of the regulation-happy days of the 1960s and 1970s, partly a byproduct of judicial overreach, and partly the natural result of a certain heightened public anxiety that always makes itself felt when a policy directly affects children. The 1889 Institute’s database of public school regulations is the cumulative legacy of these earlier forces and the dramatic increase of regulations in the last generation. It runs to 610 entries. Schools
are required to track every individual student’s progress in financial literacy education and every individual teacher’s professional development “points,” spend at least a certain minimum amount on their libraries, and meet test score targets or be subject to sanctions. They must also master obscure laws governing everything from inter-district transfers to the nutritional value of diet soda. And what is the net result of the education reformers’ regulation mania? The quantitative educational outcomes that the reformers are obsessed with (test scores, graduation rates) are still flat at the end of high school, which is the only point where they matter. And nobody thinks qualitative outcomes (character formation, good citizenship) have improved. If command and control doesn’t work, what does? That brings us to the other big reform movement that got going in the 1990s—school choice. Access to private school choice programs and charter schools has dramatically increased and shows no sign of slowing down; there are now 62 private school choice programs in 29 states plus Washington, D.C. A large body of research shows that choice improves outcomes both for participating
students and for those who remain in district schools. Escaping the burden of overregulation is one of the main reasons choice is so effective. Choice schools are regulated—in fact, in most states they are overregulated. But they are not nearly as overregulated as district schools. I once heard a woman who had left her job as principal of a district school to start a school of choice testify in a state legislative hearing. A legislator asked her why she did it. “Because I can hold a meeting,” she replied—explaining that the state’s work rules had made it impossible for her to convene an all-staff meeting as a district school principal. Choice makes it possible to run schools effectively because it aligns freedom and accountability, and focuses them both at the most local bureaucratic level possible—the school building. This principal now has the freedom to run her school how she needs to. She can be given that freedom because parents have the power to hold her accountable for whether she runs her school well. We can easily start applying that principal’s principles to the way we run our district schools (on top of enacting school choice programs, of course).
Inflation-adjusted Spending per Student, Oklahoma
The two basic rules are: freedom and accountability must always be kept together, and we should always put as much of them as possible in the individual school building rather than in larger administrative units. Very few of the regulations in the 1889 Institute’s database deal with issues that really need to be handled at the district level, never mind the state. I honestly think that the nutritional value of diet soda might not even need to be managed by schools at all. But if it does, why not let the principal hire lunchroom staff who are up to the job? The biggest dysfunction, and hence the biggest potential improvement, involves the hiring and firing of teachers. No one is really qualified to do this except the principals who actually know them. Teachers aren’t interchangeable widgets, they’re human beings. Of course, building-level freedom for principals would require building-level accountability. The simplest and most effective way to get that, as I’ve said, is parental choice. But reform of school boards and other local governance structures—now typically moribund— could also be a huge help. With cleaner and more transparent local elections for local boards, we could let principals hire and fire teachers, boards hire and fire principals, and voters hire and fire board members. None of this will be desirable to the huge number of people who now make a living off the School Regulation Industrial Complex. But it ought to be welcome to parents, teachers, and taxpayers alike.
Greg Forster (Ph.D., Yale University) is a Friedman Fellow with EdChoice. He is the author of six books, including "John Locke’s Politics of Moral Consensus" (Cambridge University Press, 2005),
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and the co-editor of four books, including "John
Byron Schlomach, 1889 Institute, August 2017. Data sources: U.S. Census Bureau, Statistical Abstract of the United States, selected years; Oklahoma State Department of Education. Inflations adjustments by author to 2015 dollars using the Consumer Price Index.
Rawls and Christian Social Engagement: Justice as Unfairness." He has written numerous articles in peer-reviewed academic journals as well as in popular publications such as The Washington Post and the Chronicle of Higher Education.
www.ocpathink.org
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By Brandon Dutcher
Expand Parental Choice in Education Oklahoma has two private-school choice programs which are benefiting students. In 2018, policymakers should expand them and enact new ones.
Vouchers
Oklahoma’s private-school voucher program, the Lindsey Nicole Henry (LNH) Scholarship Program for Children with Disabilities, is helping hearing-impaired children, autistic students, rural students who want a faith-based education, and many more. In 2017, lawmakers expanded program eligibility to include foster children and children adopted out of state custody. “It is not about saying that public education is bad—I’ve never said that and I never will,” said state Sen. AJ Griffin (R-Guthrie), who spearheaded the 2017 expansion. “It is about saying that some children who have suffered a brain change, it requires them to have a different environment in order to thrive and learn.” •
Recognizing that many more children also need a different environment, lawmakers should create a scholarship program—modeled after legislation (HB 1) introduced in Florida—for victims of bullying, harassment, sexual offenses, physical attack, and more.
Tax Credits
Oklahoma’s tax-credit scholarship program gives individuals and businesses a tax credit for contributions made to philanthropic organizations which award private-school scholarships. The program is helping bullied children, homeless students, teenage students battling addiction, children of Fort Sill enlisted families, and more—all while saving the state money. As The Journal Record reported on October 6, 2017, “The state budget saves $1.24 for every dollar of tax credit issued to the Oklahoma Equal Opportunity Education Scholarship Act, according to an Oklahoma City University study released Friday.” The study was conducted by economists Jacob Dearmon and Russell Evans of OCU’s Meinders School of Business. “Out of a total of 28 empirical studies (before the new one in Oklahoma) that have looked at this question, 25 studies find school choice saves taxpayer money,” said Dr. Greg Forster, a political scientist who studies school choice. “The other three find choice programs to be revenue-neutral. No empirical study has ever found that school choice is a net drain on taxpayers.” Thus, it’s no surprise that lawmakers overwhelmingly (38 to 4 in the Senate, 64 to 23 in the House) saw fit to expand the program in 2017 by making more tax-credit cap space available. •
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Lawmakers should raise the tax-credit cap and build in an automatic escalator whereby the cap would increase
PERSPECTIVE January/February 2018
•
automatically as the program continues to serve more students. Lawmakers should also create an individual tax credit. Parents paying for private education or home education have to pay twice: once in taxes and once for tuition or curricular expenses. To address this inequity, Oklahoma should join the eight other states which provide for individual education tax credits or deductions.
Education Savings Accounts (ESAs)
Six states have created an Education Savings Account (ESA) program in which the state deposits a portion of a child’s per-pupil funding into a bank account controlled by the parents. Parents use the funds to pay for private school tuition, online learning programs, private tutoring, educational therapies, or a customized mix of options. They can even save some for college. •
Lawmakers should create an ESA program.
Again, none of this is to disparage the public education system. “I am very pro public schools,” writes Wade Burleson, pastor of Emmanuel Baptist Church in Enid (and an ESA supporter). “God gives parents the responsibility to be the primary educators and formers of their children’s faith. Parents should be able to consider the best option for their children’s whole education and formation.” Parents, not government officials, have the moral right to raise their children according to their consciences. State lawmakers should work to secure that right in 2018. Brandon Dutcher (M.A., Regent University) is senior vice president at OCPA. He is listed in the Heritage Foundation Guide to Public Policy Experts and is editor of the book "Oklahoma Policy Blueprint," which was praised by Nobel Prizewinning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His award-winning articles have appeared in Investor’s Business Daily, WORLD magazine, Forbes.com, Mises.org, The Oklahoman, the Tulsa World, and 200 newspapers throughout Oklahoma and the United States.
By Jonathan Small
Let Teachers Vote on Unions Helping teachers and students succeed is a goal we all share, a goal that matters most for Oklahoma’s most vulnerable young people. Getting public policy right in the area of education includes respecting teachers and freeing them from the shackles of old, outmoded systems. One old system that is particularly unfair is the state law that gives private political organizations power to claim to represent teachers, whether they like it or not. In Oklahoma, state law gives unions that power, even though voters adopted a right-to-work law in 2001. The law protects workers from being fired if they refuse to become union members and pay union dues. However, it does not allow workers who opt out of union membership to also avoid union representation. Union executives claim this is necessary for efficiency. How could workers negotiate with management on their own? How could a workplace have multiple bargains for different employees? Of course, in many workplaces employees do stand on their own feet and work out their own deals. The real absurdity of this situation is becoming clear in some Oklahoma school districts. Many were unionized long ago, before most current teachers or other staff were ever employed there. Since voters adopted the right-to-work law, many employees have opted out of those unions. But the unions mostly remain and continue to exercise power to represent all those public servants. House Bill 1767, sponsored in 2017 by Rep. Todd Russ, would have let teachers and other education employees vote each year on whether to keep their union, look for a new union, or pass on union representation altogether.
Wisconsin Gov. Scott Walker and OCPA president Jonathan Small discuss education policy at OCPA.
Current state law allows workers to ask permission to hold such an election, but makes the process difficult in a way that benefits the union status quo. Just one example: Workers can only request an election during the month of February! Rep. Russ’s bill would let teachers vote every five years to express their true feelings about union representation. Gov. Scott Walker included a similar measure in his package of union reforms in Wisconsin. And while some teachers there did vote to dissolve their unions, the measure also reaffirmed that some unions actually do what they say they do. About three-quarters of Wisconsin teacher unions were retained. A statewide survey conducted last year asked likely Oklahoma voters: “Do you agree that Oklahoma school employees who are represented by a labor union should be allowed to vote every five years to decide whether they want to be represented by that union?” Not surprisingly, 67 percent of Oklahoma voters agree with this common-sense idea, while only 13 percent disagree. Rep. Russ’s bill passed out of the General Government Oversight and Accountability Committee on March 2, 2017. It was never brought to a vote on the House floor. That’s a shame, because Oklahoma union executives have nothing to fear from more democracy—as long as they are really representing the interests of workers.
www.ocpathink.org
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By Trent England
Limit Local Taxing Power Because taxing income means disincentivizing paid work, OCPA advocates shifting the state of Oklahoma away from reliance on income taxes. Moreover, state lawmakers should eliminate the possibility of local income taxes within Oklahoma—while allowing city governments to access available and stable sources of revenue to support the legitimate ends of local government.
A collection of liberal officials and tax-consumer groups spent the fall working to get a municipal income tax on the Oklahoma City ballot. Failure to follow signature-gathering rules and questionable ballot-language construction halted, or at least delayed, the effort. Of course, ballot measure signature drives sometimes are used by political activists simply to create lists of voters for future organizing. But the Oklahoma City effort deserves to be taken seriously because it raises two important questions. First, what are (or should be) the limits of local governments’ power to tax? And second, what are the guiding principles of good tax policy? Before addressing those questions, it is important to remember that local governments are all creations of state governments. American federalism is not just a system of local control or subsidiarity, but a structure where the states are the foundational level of government. “We the people,” through our states, joined the federal union. And we also, again acting through our states, establish local governments. This means state legislators (or all those with power to modify a state constitution, including the voters) have a duty to decide what are the limits of municipal power. Those limits should recognize that the purpose of government is not simply to “do what people want.” That would be mob rule. The entire Bill of Rights is about foiling majorities that
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PERSPECTIVE January/February 2018
want to use government for illegitimate ends. The purpose of government is to protect individual rights and, in so doing, to secure our “Safety and Happiness.” The foundation of good tax policy is the understanding that all taxes impose a cost on individuals by taking from them some of their property and thus infringing on their liberty. This is the cost of government, but it is a real cost. If taxes are too high or the money is not well spent (or both), taxes destroy the very reason for government in the first place. In other words, the first principle of good tax policy is that taxes should be as low as possible to provide for the basic services that are necessary and within government’s legitimate powers. Second, taxes should be as uniform as possible. The “rule of law” means that the law should apply the same way to everyone. From this proposition comes the idea of civil rights, that governments should not discriminate against particular citizens or groups of citizens. As a practical matter, as soon as this principle is violated politicians have tremendous power to pervert justice in order to benefit their friends and punish their enemies. Taxes should be low and uniform, but they also should be predictable. This is true for those who pay, spend, and benefit from taxes, but especially for the first and last of these groups. When tax policies change too much, this instability makes it hard for taxpayers to plan. Economically speaking, this uncertainty
increases the cost of a tax even without increasing how much government receives. On the other hand, when taxes are attached to volatile economic activities, those who spend and benefit from tax dollars will have a hard time planning. Again, in economic terms, this kind of uncertainty decreases the value of future taxes. It also leads to “fiscal cliffs” and often to big tax hikes at the very worst times. Good tax policy aims for stability and predictability. Finally, good tax policy recognizes that the laws of economics—really just reflections of human nature—apply to taxes just like they do to everything else. Taxes create incentives and disincentives that affect the choices people make and, consequently, the economy overall. A high tax on a certain kind of investment will mean people make fewer of those investments than they would have without the high tax. If the price of gasoline goes up by 50 cents, people will drive less, whether the price hike is the result of tax hikes or market changes. Good tax policy considers these disincentives and other economic effects. In Oklahoma, the largest source of city revenues is sales taxes. Other revenue sources include fees and excise taxes. These are relatively broad and reliable taxes. Sales tax revenues do fluctuate with economic conditions, but not as much as income, capital, or commodity-based severance taxes. The only tax that is clearly more stable than a broad sales tax is a property tax, and many other states make property taxes the primary revenue source for cities and other local governments. Income taxes are narrower and often more volatile than sales taxes. For Oklahoma City to begin relying on income taxes would be a step in the wrong direction (especially given our fierce competition with Texas, which levies no income tax). And if other cities within Oklahoma determined to set up their own income taxes, each with different rates and rules, the resulting patchwork would create uncertainty and instability for taxpayers. Taxing income also means disincentivizing paid work—the principled reason why OCPA advocates shifting the state of Oklahoma away from reliance on income taxes. Should Oklahoma allow cities to create their own income taxes? Local communities often are the best places to make policy decisions. But local control is an idea about how government should work, not what government is for. It would be foolish for state lawmakers to allow cities to undermine the state’s economic future. Legislators should eliminate the possibility of local income taxes within Oklahoma. At the same time, they should take seriously the concerns of city leaders and allow city governments to access available and stable sources of revenue to support the legitimate ends of local government. Trent England (J.D., George Mason University) serves as executive vice president at OCPA, where he also is the Dr. David and Ann Brown Distinguished Fellow for the Advancement of Liberty. Formerly a legal policy analyst at The Heritage Foundation, England also directs the Save Our States project (saveourstates. com). He hosts a radio program, The Trent England Show, from 7 to 9 weekday mornings on Oklahoma’s AM 1640, The Eagle. He has also filled in as host of other radio programs, including The Ben Shapiro Show. England is a contributor to two books—"The Heritage Guide to the Constitution" and "One Nation Under Arrest: How Crazy Laws, Rogue Prosecutors, and Activist Judges Threaten Your Liberty." His writing has also appeared in the Wall Street Journal, Christian Science Monitor, Washington Times, and other newspapers.
OCPA’s Trent England is pictured here at the Save Our States booth at a December 2017 meeting of the American Legislative Exchange Council (ALEC) in Nashville. Save Our States is now a project of OCPA.
Save Our States How we elect our president affects every other part of our American political system. The Electoral College forces candidates to run national campaigns and build broad, diverse coalitions. The National Popular Vote scheme would give more power to fringe candidates, regional political movements, and corrupt big city political machines. The authors of the United States Constitution understood that the structure of government is more important to human liberty than even a bill of rights. Indeed, while our Bill of Rights was added later, the systems of checks and balances and federalism were built into the original Constitution. One of these structures is the Electoral College, the process by which we elect the President of the United States. The Electoral College forces candidates to build national coalitions. It prevents candidates from winning based on intense support in just one region of our large and diverse nation. The Electoral College is just a system, but the incentives it creates have moderating, unifying, and stabilizing effects that help the United States to remain a free and prosperous nation. Oklahoma lawmakers in 2018 should continue to squash attempts to implement the National Popular Vote scheme.
www.ocpathink.org
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By Byron Schlomach
Stop Conspiring with Zero Emissions Suppose I told you of a way to imperil the state’s budget, force needless investment spending in an industry that everyone depends on so everyone must help to pay for that spending, destabilize the electric grid, and hand millions of dollars to foreign companies, all at the same time. It sounds like a plot from a spy movie, or maybe some cockamamie conspiracy theory off a paranoid website. But it’s not. It’s real. It’s happening in Oklahoma right now. What’s worse, our state legislature has actively participated in this plot, although it has been taking steps of late to wash its hands of the affair. There is still more to be done, though, if the legislature is to be rid of this scandal. I’ve just described the wind generation industry in Oklahoma. Even though new state income tax credits are no longer being granted, the state’s budget will continue to bleed potential revenue— hundreds of millions of dollars, all told—for years to come on wind projects already in the program. Since these credits are “refundable,” the state does not just lose revenue, but actively pays for some projects since their credits are worth more than their income tax liability in the first place. Since wind generation plants are located far away from where the bulk
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PERSPECTIVE January/February 2018
of the demand for electricity occurs, all rate payers (i.e., everybody in the state) must pay for the new and upgraded transmission lines to connect electricity users with the turbines. Meanwhile, the electric grid is at risk since the wind, even in Oklahoma, does not always blow. We could very well find ourselves without adequate generation capacity on an unusually windless day in the future. And foreign companies are often the primary beneficiaries of the tax treatments the legislature bestows, either as initial investors or when buyouts occur. The fact is that federal zero emission tax credits dwarf the state’s. For this reason, wind plants are likely to continue to be built even if the state directly taxes them. Thus, the legislature should end all favorable tax treatments for zero emission plants that remain. Two tax favors, in particular, should end right away. First, tax credits already promised and in place must be honored, but a tax credit is different from a subsidy. These credits do not have to remain refundable. That is, the state should not pay a producer the difference between a credit that is worth more than what the producer’s tax liability would have been without the credit. This is a direct payout from the state’s treasury, and the Oklahoma Supreme Court has ruled, in Ali v. Fallin, that the state is not obligated to maintain such payments into the future. Second, the state has a sales tax exemption for manufacturers for good economic reason. The exemption is designed to prevent tax pyramiding,
The legislature should end all favorable tax treatments for the wind industry. where taxes are paid on taxes. However, this exemption does not extend to oil and gas equipment. Why? Because Oklahoma is rich in oil and gas, and it is common for commodity-rich states to tax those very commodities in order to place the tax burden on broad shoulders in what is, after all, a low-cost industry compared to other states. Oklahoma has been called the Saudi Arabia of wind. Wind would seem to have the same broad shoulders as oil and gas. Finally, the legislature should repeal its zero-emission tax credit for all sources of zero-emission power, not just wind. The main threat to Oklahoma’s budget and power grid in the future is solar power. As long as that law remains on the books, we are at risk from solar for exactly the same reasons that wind has been a bad deal for Oklahoma’s taxpayers. In the future, perhaps an inexpensive battery technology will finally be developed that will make zero-emission generators truly economically competitive with fossil fuel-powered electric generation. Until that time, the legislature needs to stop conspiring against its own constituents.
Two Reforms for TSET By Trent England
He approaches you on the sidewalk and asks for money. He does look a little disheveled, maybe down on his luck, but something catches your eye. In the cart behind him is a cashbox with its lid partly open. In fact, the lid can’t close because it’s packed to overflowing with twenty-dollar bills. “What’s the deal?” you demand. “You’re begging for money when you’ve got a whole bunch right there!” He's offended. “That’s my savings,” he retorts, “I can’t spend that.” And so some Oklahoma officials decry tight budgets and demand tax increases, all while the state has one account holding more than a billion dollars. The account is held by the agency called TSET—Oklahoma’s Tobacco Settlement Endowment Trust—and is a model of how not to build a bureaucracy. TSET was set up to hold money the state receives from its participation in the tobacco lawsuit in the 1990s. It is subject to no political control or accountability and has a mission so broad it can use funds on anything related to health, education, or whatever else might benefit Oklahomans. What it does, predictably, is spend some money on high priorities like cancer research, but also spend money on absurd projects like hassling people not to drink soda while paying for advertising for bars and sleazy nightclubs that happen to ban smoking. And this is just what TSET does with the earnings from its growing savings account. The bulk of the money is—for now—locked away. That might have seemed like a good idea when people thought it would only amount to a few million, or even tens of millions, of dollars. But today TSET sits on a pile of more than $1.1 billion. The time has come to reform TSET in two ways. First, new tobacco settlement dollars should be redirected to high-priority health care needs (rural hospitals, care for veterans, etc.). Second, TSET’s endowment should be reduced, capped, and limited to helping people quit smoking and to health care needs related to smoking (what most people thought TSET was about in the first place). Excess TSET funds should be appropriated by the legislature, which might use these temporary revenues to cover transitional costs related to criminal justice reforms or tax reforms (or both).
Finish the Job on Federal-Funds Transparency In 2015 a very important piece of legislation, House Bill 1748, required Oklahoma state agencies to publicly report the amount of federal funding they receive and the strings attached to that money. The measure passed overwhelmingly in both chambers. Disappointingly, it was vetoed by Gov. Mary Fallin. Today, as OCPA president Jonathan Small has pointed out, “tens of millions of dollars are missing; criminal investigations are under way. Officials at the State Department of Health, it seems, misspent funds and misled the public about it for at least six years. Some of the money came from the federal government, meaning those involved could face federal charges, and state taxpayers might have to pay that money back.” Would HB 1748 have prevented all of these problems? No. Still, the scandal reminds us of “the danger of federal funds flowing through state agencies and the need for greater transparency,” Small says. “The money looks deceptively free, inviting abuses. After all, the Legislature doesn’t have to raise it through taxes. For that matter, about a quarter of all federal funds are borrowed (something that would be illegal for state government to do on its own).” “What’s most upsetting about the governor’s wrongheaded veto,” OCPA distinguished fellow Andrew Spiropoulos presciently noted at the time, “is what it tells us about the mindset of her administration. Both her decision and her defense of it help explain why, less than five months into her second term, many conservatives have lost hope that we will see any meaningful change in the next four years.” Nevertheless, in light of the Health Department scandal and perhaps other scandals we don’t yet know about, lawmakers should pass federal-funds transparency legislation in 2018 and send it to the governor’s desk. —Brandon Dutcher
www.ocpathink.org
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QUOTE UNQUOTE “Persself.” One of the gender-neutral pronouns OU students are encouraged to use, according to a Fall 2017 resource guide published by a department in the University of Oklahoma’s division of student affairs. Other recommended pronouns include “zirself,” “hirself,” and “eirself.”
“Well congratulations to you. You are officially a
“Several recent political
politician, instead of a human being.”
science studies
State Rep. Roger Ford (R-Midwest City), in a Nov. 8 Facebook post calling out his colleagues who dared to vote against one of the largest tax increases in state history
colleges in Tishomingo and Wilburton), but no four-year public college in Tulsa.” Tulsa World editorial board, November 22, 2017
“Our district has failed. It's an embarrassment to the state. It's an embarrassment to the nation. Our children are not prepared.” Oklahoma City school board member Charles Henry, quoted in The Oklahoman on December 5, 2017
that when legislators political brand all of their
system deal with the debilitating legion of college campuses created logic resulted in a graduate-level university in Goodwell (and two-year
marketing industry lingo, weaken their party’s
“Fallin is absolutely correct to demand that the state's higher education by pork-barrel legislation over the decades. Somehow that crazy quilt
demonstrate, borrowing
members lose credibility “It starts with how you raise your children. If a young man doesn’t have a father figure, he’ll go find a father figure.” Denzel Washington, star of the film “Roman J. Israel, Esq.,” when asked by a reporter about the prison system
and, eventually, elections.” OCU law professor Andrew Spiropoulos, in a November 16 column titled “Following core political principles.” Spiropoulos says the conservative members of the Oklahoma House of Representatives who defeated a tax-increase bill during the special session were right to do so.