Perspective - July 2017

JULY 2017

OKLAHOMA COUNCIL OF PUBLIC AFFAIRS

Income Taxes & Team Success

In Case You Missed It Oklahomans should be very thankful for State Question 640. bit.ly/OK-SQ640

Okmulgee public school teachers dropped the OEA and chose a non-union bargaining representative. bit.ly/OkmulgeeDropsOEA

If you know of a federal regulation that should be rewritten or eliminated, send the information to Paul Winfree: paul.l.winfree@who.eop.gov

The superintendent of Stroud Public Schools is not waiting for the legislature to raise teacher pay.

Americans’ trust and confidence in the mass media “to report the news fully, accurately, and fairly” has dropped to its lowest level in Gallup polling history. bit.ly/TrustInMediaDrops

By a margin of 5 to 1, Oklahoma voters support a Scott Walkertype reform which would allow teachers to vote every five years on whether to keep their union. bit.ly/UnionRecert

An OSU professor says we should let entrepreneurs, like those at the Surgery Center of Oklahoma, play a prominent role in fixing our broken healthcare system.

bit.ly/TPS-org-chart

Progressives claim to love science, Kevin D. Williamson writes, but what they really love is power. bit.ly/PowerOverScience

According to the website SpendingTracker.org, Frank Lucas (R-OK) is the top spender in the U.S. House of Representatives. Tom Cole (ROK) is ranked 16th. bit.ly/SpendingTracker-OK

The liberal Brookings Institution is funded by U.S. taxpayers.

bit.ly/SurgeryCenterOK

bit.ly/StroudPS

PERSPECTIVE

The Tulsa Public Schools org chart is a thing to behold.

bit.ly/2r1WA1p

Brandon Dutcher, Editor

OCPA Trustees

OCPA Researchers

Glenn Ashmore • Oklahoma City

Patrick T. Rooney • Oklahoma City

Robert D. Avery • Pawhuska

Melissa Sandefer • Norman

Lee J. Baxter • Lawton

Thomas Schroedter • Tulsa

Douglas Beall, M.D. • Oklahoma City

Greg Slavonic • Oklahoma City

Inc., an independent public policy

Susan Bergen • Norman

Charles M. Sublett • Tulsa

organization. OCPA formulates and

John A. Brock • Tulsa

Robert Sullivan • Tulsa

David Burrage • Atoka

William E. Warnock, Jr. • Tulsa

Michael Carnuccio • Yukon

Dana Weber • Tulsa

analysis consistent with the principles

William Flanagan • Claremore

Molly Wehrenberg • Edmond

of free enterprise and limited

Josephine Freede • Oklahoma City

Daryl Woodard • Tulsa

Perspective is published monthly by the Oklahoma Council of Public Affairs,

promotes public policy research and

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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PERSPECTIVE // July 2017

Ann Felton Gilliland • Oklahoma City

Steven J. Anderson, MBA, CPA Research Fellow Tina Dzurisin Research Associate Trent England, J.D. Dr. David and Ann Brown Distinguished Fellow for the Advancement of Liberty Jayson Lusk, Ph.D. Samuel Roberts Noble Distinguished Fellow J. Scott Moody, M.A. Research Fellow Andrew C. Spiropoulos, J.D. Milton Friedman Distinguished Fellow

John A. Henry III • Oklahoma City Robert Kane • Tulsa

Wendy P. Warcholik, Ph.D. Research Fellow

Frank Keating • Oklahoma City Gene Love • Lawton

EMERITUS BOARD

David Madigan • Lawton

Blake Arnold • Oklahoma City

Tom H. McCasland III • Duncan

Steve W. Beebe • Duncan

David McLaughlin • Enid

David R. Brown, M.D. • Oklahoma City

J. Larry Nichols • Oklahoma City

Paul A. Cox • Oklahoma City

Lloyd Noble II • Tulsa

John T. Hanes • Oklahoma City

Mike O’Neal • Edmond

Henry F. Kane • Bartlesville

Andrew Oster • Edmond

Lew Meibergen • Enid

Larry Parman • Oklahoma City

Ronald L. Mercer • Bethany

Bill Price • Oklahoma City

Daniel J. Zaloudek • Tulsa

Oklahoma Education Spending Continues to Rise

Inflation-adjusted Spending Per Student, Oklahoma

FIGURE 1 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 1919-20

By Byron Schlomach

1929-30

1939-40

1949-50

1959-60

1969-70

1979-80

1989-90

1999-00

2008-09

Inflation-adjusted Average Teacher Salary, Oklahoma

FIGURE 2 $60,000

In a recent policy brief published by the 1889 Institute (“Public Education Spending in a Historical Context”), I made the case that Americans have lavished more resources on public education than even the National Education Association would have dreamed of a hundred years ago.

The idea that public schools in the United States in 2017 are being starved of what they need to fulfill their task, given the history of public education funding, is more than a stretch. Given the facts, it is more than reasonable to ask: (1) Where are all the resources going? and (2) Why can’t the schools do more with what they have?

Based on the evidence I compiled, it can definitely be said that new resources are not flowing to the classroom, either in the form of more teachers or better teacher pay. The answer to the second question has many potential answers, but the evidence is that it should certainly be possible.

And what about Oklahoma? As the nearby table and figures make clear, Oklahoma shows the same basic pattern as the nation.

$50,000 $40,000 $30,000 $20,000 $10,000 $0 1959-60

1969-70

1979-80

1989-90

1999-00

2008-09

Student/Teacher Ratio, Oklahoma

FIGURE 3 45 40 35 30 25 20

Byron Schlomach (Ph.D. in economics, Texas A&M University) is state policy

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director for the 1889 Institute, an independent research organization. He is a

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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

5

Prosperity at the Goldwater Institute, and prior to that was chief economist for the

0

Texas Public Policy Foundation.

TABLE 1

1919-20

1929-30

1939-40

1949-50

1959-60

1969-70

1979-80

1989-90

1999-00

2008-09

Select Oklahoma Public Education Statistics, 1920 - 2009 1919-20

1929-30

1939-40

1949-50

1959-60

1969-70

1979-80

1989-90

1999-00

2008-09

Inflation-adjusted Spending per Student

$473

$705

$937

$1,957

$3,030

$3,683

$5,540

$7,934

$9,534

$10,023

Inflation-adjusted Average Teacher Salary

N/A

N/A

N/A

N/A

$36,938

$41,477

$39,971

$42,909

$46,846

$47,931

Student/Teacher Ratio

38.3

34.5

30.4

24.7

23.0

21.6

16.9

15.7

15.1

15.6

Notes: Inflation adjustments by author to 2015 dollars using the Consumer Price Index. The pupil/teacher ratio is simply the number of pupils divided by the number of teachers. Individual experience will obviously vary.

Source: Statistical Abstract of the United States, U.S. Census Bureau, selected years

www.ocpathink.org

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Income Taxes & Team Success

By Mike Brake

Want to help the Thunder win an NBA championship? Eliminate the state income tax!

Okay, it’s not quite that simple. But a new study by a University of Illinois economist finds a clear correlation between state income tax rates and the winning (or losing) records of professional sports teams.

Dr. Erik Hembre of U of I’s Chicago campus studied the win-loss records of all teams in Major League Baseball, the National Football League, the National Hockey League, and the National Basketball Association between 1977 and 2014. He found an increasingly clear connection between winning and lower (or no) state income tax rates after 1994.

So why would this be the case?

First, even rookies in those four professional sports leagues earn hundreds of thousands of dollars a year, which means that professional athletes almost universally fall into the top income tax brackets. The average salaries range in the $2-4 million category, and all-stars typically earn $15 million or even $20 million per year. Regardless of the state, we can assume that everyone who plays full time in the NBA, NFL, MLB, or NHL

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PERSPECTIVE // July 2017

is taxed at maximum rates.

Those rates might only seem like an annoyance for someone earning $50,000 or even $100,000 a year, but assess, say, a five percent state income tax rate against a $10 million income and you’re talking about an extra half a million a year in state income taxes.

That’s a significant bite out of anyone’s income.

A second factor is the relatively brief playing careers of most professional athletes. While they may make oodles of money for five or 10 years, rare is the player whose career extends even to two decades. They must earn a lifetime’s worth of wealth in a relatively brief career, and tax rates play an increasingly large role in what they ultimately get to keep.

Third, while those four professional sports leagues bind players to their initial teams during their first few years in some way, all allow some form of free agency after a specified number of years.

Teams routinely bid for the services of star players, and any competent agent or business manager takes state income tax rates into account when advising his client about which $15 million free agency offer would actually reap the most money—the one from a California team with a 13.3 percent state income tax, or

the one from Texas with no state income tax at all.

Dr. Hembre also notes that while some teams might offer a “tax differential” to help offset the amount lost to state taxes, all but MLB are subject to some form of salary caps that limit how much a team can pay in total salaries. So such a differential might not be possible.

But the proof is in the data, and Dr. Hembre is convincing.

Since 1994, he reports, every 10 percent increase in state income tax rates has resulted in an average decline in the number of games won by a professional sports team of at least three percent. That may not sound like much—until one realizes that the difference between a championship team and an also-ran can be as little as one game in an extended season.

Dr. Hembre found the largest win-loss differential in the NBA. Between 1993 and 2015, the 13 teams in the highest-taxed states played in the NBA finals 12 times and won six championships (and most of those were one by one superteam, the Los Angeles Lakers).

During those same years, there were just seven teams from states with no income tax, but they played in the finals 18 times and won 11 titles.

“State income tax rates significantly

impact team performance,” he wrote.

In fact, he suggested, having an NBA team in a state with no personal income tax allows owners there to construct teams in a way that is the equivalent of adding one all-star player.

Dr. Hembre says that teams in high-tax states are less likely to pursue the best free agent players for the reasons noted above. They are constrained by the subtle but real combination of high taxes and the impact they have on player salaries and salary caps that limit how much they can

found no connection between tax rates and win-loss records. That’s as one would expect when the key factor is player salaries, which do not exist in college.

Of course, if you asked an individual player what impact state income tax rates might have on where they would choose to play, most would refer you to their agents or business managers. But some professional athletes have said state income tax rates play a role in such decisions.

In 2013, after California raised its

fans of high tax rates, fellow golfer Tiger Woods admitted that he had moved from California to Florida when he turned professional at least in part because of the comparable tax rates.

And when baseball all-star Torii Hunter left the Los Angeles Angels for the Detroit Tigers he noted the differences in state tax rates—13.3 percent in California and 4.35 percent in Michigan. Hunter also moved his residence to Texas where he would have to pay no state income tax on non-playing endorsement income.

Having an NBA team in a state with no personal income tax allows owners there to construct teams in a way that is the equivalent of adding one all-star player. offer a free agent.

That is true especially of the NBA, where one all-star caliber player can make a huge difference. It remains true to a lesser extent for the NHL and NFL, but Dr. Hembre found minimal impact for tax rates on Major League Baseball, the only league that does not have an enforced salary cap.

To add some proof, Dr. Hembre also ran the numbers on college basketball teams in high- and low-tax states, but

top state income tax rate to the nation’s highest at 13.3 percent, professional golfer Phil Mickelson stirred a minor frenzy when he announced that he was considering moving to a no-tax state to escape the California tax burden.

That’s hardly surprising. Forbes lists Mickelson’s 2016 earnings from golf and the many endorsements that go with it at $53 million. In California his state income tax bill would be more than $7 million!

After Mickelson was roundly booed by

So it is hardly a pipe dream to see a championship in the Thunder’s future in a no-income-tax Oklahoma.

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 Lt. Gov. and Congresswoman Mary Fallin, and has also served as an adjunct instructor at OSU-OKC.

“Players make free-agent decisions for many reasons, and New York or Los Angeles can offer attractions and endorsement deals that offset their horrendous tax rates. But no one should be surprised that professional athletes respond to incentives like individuals in any industry. Perhaps this evidence will tempt governors and state lawmakers to cut rates now that they know that, along with a growing economy, they might end up with better sports teams and happier fans, also known as voters.”

The Wall Street Journal, in a house editorial on May 8, 2017

www.ocpathink.org

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School Choice and Segregation

By Greg Forster

If you want to make sure schools are segregated, the quickest and easiest way to do it is to force families into schools based on their ZIP codes. Segregation flourishes under the government monopoly—both because schools are tied to ZIP codes and because power brokers draw the attendance lines.

School choice is actually the only education policy with a serious hope of reducing segregation in schools.

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PERSPECTIVE // July 2017

The accusation that school choice will increase ethnic segregation in schools, after a long period on the rhetorical back-burner (during the age of test-score obsessions), has suddenly returned to the forefront of public debate. That’s no surprise, given rising levels of ethnic tension and polarization.

But it remains as false as it ever was; school choice is actually the only education policy with a serious hope of reducing segregation in schools.

The triggering event for the recent surge in attention to this accusation was a report released in March by the Century Foundation, claiming that “studies,” “evidence,” and “data” show that choice will increase segregation. The report’s actual attention to empirical studies was scanty and misleading. Its claims were mostly based on the author’s speculative theories about what choices we might expect parents to make. Her characterization of the studies, when she deigned to discuss them, was wrong; real researchers quickly debunked it. No doubt that’s why the report seems to have disappeared down the memory hole.

But now lots of people are talking about

choice and segregation.

For the record, 10 empirical studies have examined the relationship between school choice and ethnic segregation. The methods differ, and not all studies allow us to look at all possible questions. Nonetheless, all these studies provide some useful information about what’s going on when parents exercise choice.

Nine of those studies found that school choice provided a more integrated classroom experience. One found no visible difference. No empirical study has ever found that a school choice program made ethnic segregation worse.

In fact, that body of research is the reason it’s been a while since we heard much talk about segregation in the debate over school choice. I remember hearing this talking point much more in the early 2000s, when fewer of these studies had been done. As the evidence piled up, the talking point went away.

It’s worth asking why the data show what they show. The basic claim of choice opponents has always been that if we give parents a choice, they will choose

M.L. KING JR. ELEMENTARY SCHOOL Oklahoma City Public Schools 89% BLACK 6%

CAUCASIAN

3%

HISPANIC

1%

NATIVE AMERICAN

1%

ASIAN

SOUTHEAST ELEMENTARY SCHOOL Jenks Public Schools 81% CAUCASIAN 8%

ASIAN

5%

HISPANIC

5%

NATIVE AMERICAN

1%

BLACK

DOUGLASS HIGH SCHOOL Oklahoma City Public Schools 86% BLACK

segregation. Families have to be forced into schools based on their ZIP code, not allowed to seek out what will serve their children’s unique needs, because they’re racist. This might be a subtle or even unconscious bias, but whether it’s overt or covert, that’s the direction parents will take us in if we let them.

Surprisingly, the strongest counterargument is not “parents aren’t racist.” (Or, to be fair, “parents aren’t racist enough for this to be a problem.”)

Some do think the danger of racism is simply overblown, and that is one plausible way to explain the positive data on choice programs and segregation. I used to be satisfied with that explanation myself. As I have considered it further,

7%

HISPANIC

5%

CAUCASIAN

2%

NATIVE AMERICAN

0%

ASIAN

RUSSELL DOUGHERTY ELEMENTARY SCHOOL Edmond Public Schools 87% CAUCASIAN 6%

HISPANIC

5%

ASIAN

2%

NATIVE AMERICAN

0%

BLACK

LEE ELEMENTARY SCHOOL Oklahoma City Public Schools 90% HISPANIC

SOURCE Oklahoma Office of Educational Quality and Accountability, “2015 School Profiles”

5%

CAUCASIAN

2%

NATIVE AMERICAN

2%

BLACK

1%

ASIAN

www.ocpathink.org

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however, I have grown to think there’s more to the story.

There’s a critical fact we have to consider before we evaluate the merits of the “parents are racist” argument. If you want to make sure schools are super-segregated, the quickest and easiest way to do it is to force families into schools based on their ZIP codes!

And that is why our public schools are in fact super-segregated, and are likely to remain that way until we get school choice.

Americans are highly segregated by residence. Anglo people tend to live in Anglo neighborhoods, black people in black neighborhoods, Hispanic people in Hispanic neighborhoods, and so on. If you force people to go to school where they live, you can’t escape the trap of segregated schools.

The causes of residential segregation are various. Part of it is discrimination in the housing market. And part of it is a real preference of buyers, conscious or unconscious, to live among similar people. Moreover, these two factors reinforce one another; real estate agents will sometimes not bother showing buyers homes in the “wrong” neighborhoods, not for invidious reasons, but simply because they anticipate closing a quicker sale if they stick to the “right” neighborhoods. (I know this from experience because on one occasion my wife and I caught our real estate agent excluding homes in black neighborhoods from our house search results.)

However, while the causes of residential segregation are complex, the result is simple. Americans overwhelmingly live in ethnically homogeneous neighborhoods. Since there seems to be no end in sight for residential segregation, there is also no end in sight for highly segregated public schools.

In fact, it gets worse than that. Residential segregation would cause school segregation by itself. But it gets a lot of help from how the powerful people who run the government school monopoly draw the school district and “attendance zone” lines.

Because we have a government school monopoly, which neighborhoods are served by which schools is necessarily a political question. It’s settled by powerful people who care about power. Which isn’t good news for desegregation.

Don’t believe me? Do a Google Image search for “Manhattan by ethnicity” (better yet, use the New York City ethnicity map from data visualizer Eric Fischer’s Flickr page) and then

“Manhattan school district map.” Compare the images. See how the school district lines are drawn right along the ethnic lines?

I’m sure it’s just a coincidence. Everyone knows ethnic power games aren’t an important factor in municipal politics.

When we see this, and only when we see this, are we are in a position to evaluate the claim that school choice will increase segregation because parents are racist. To whatever extent parents are racist, consciously or unconsciously, the government monopoly system is perfectly designed to cater to those racist preferences. Segregation flourishes under the government monopoly, both because schools are tied to ZIP codes and because power brokers draw the attendance lines.

So the strongest argument for choice is not “parents aren’t racist.” It’s “under the government monopoly, segregation happens by default, regardless of what parents prefer; only school choice creates the opportunity for integration.”

Choice does a better job of producing integrated schools because it weakens the association between schools and (heavily segregated) ZIP codes. If parents have a choice of where to send their kids to school, their primary concerns will be educational— strong academics, good character, school safety. To the extent that parents in general are making choices beyond their neighborhood boundaries, that’s going to shake up patterns of segregation. Moreover, if parents feel confident in the schools that they’re sending their kids to, that creates a feeling of safety which, we can hope, will defuse anxieties about integration.

Maybe you think parents are very racist and maybe you think they’re not. But we can all agree that parents have many preferences, among which racism (to the extent that it exists) is only one factor. A government monopoly simply enforces segregation upon schools, which is why public schools are so segregated. Choice opens the door for other options, and parents have lots of motivations to seek them.

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), and the co-editor of three books, including John 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.

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PERSPECTIVE // July 2017

A Closer Look at S&P’s Bond Rating Downgrade of Oklahoma

By William Freeland and Jonathan Small

Earlier this year, Standard & Poor’s (S&P) downgraded Oklahoma government debt a notch. According to a March 1, 2017, “ratings action” memo: “S&P Global Ratings lowered its rating on the state of Oklahoma's general obligation (GO) bonds and appropriation debt backed by the state's credit enhancement reserve fund one notch to 'AA' from 'AA+'. At the same time, we lowered our rating on the state's appropriation debt to 'AA-' from 'AA'. The outlook is stable.”

S&P cited recent revenue shortfalls, which they categorize as “persistently weak revenue collections.” Moreover, they essentially view Oklahoma as having a structural, persistent lower pattern of state revenue collections relative to the trajectory of state government spending—while treating that spending trend as somewhat sacrosanct and largely escaping their fiscal scrutiny. They also cite an underperforming economy, particularly noting the Oklahoma state economy’s focus on energy extraction, which has seen lower prices depress the state’s economic growth in recent years.

S&P’s partially stated and fully implied remedy is additional stable revenues to be raised by the state, in addition to enhancing the level of the state’s rainy day fund and an improvement in state economic performance generally.

In a new report published by OCPA, we suggest that S&P’s downgrade of Oklahoma state government debt should be considered with a healthy degree of skepticism.

S&P has a dubious track record of accuracy, objectivity, and impartiality in bond ratings. These ratings advise debt investors on the relative risk of failure to receive consistent, timely interest payments and, more drastically, loss of initial investment principal through debt default. S&P ranking of this risk often exhibits an agenda that can be difficult to detect, leaving their assessments with potential bias and questionable accuracy relative to the true underlying risk of the debt they rank.

Moreover, analysis of Oklahoma’s fiscal positions by other credible organizations, as well as a review of available data,

suggest a much stronger fiscal position than S&P recognizes in their recent ratings action. Even S&P itself, in maintaining a “high, investment grade” credit ranking for Oklahoma state government debt, recognizes the state has a much stronger fiscal position than many flawed media reports and opportunistic, agenda-driven commentary by some policymakers seems to suggest.

S&P’s ratings have been substantially incorrect in the past and, worse still, they have been systematically biased. Additionally, the agency is likely overly concerned with the short-term interests of bondholders of state debt, and grossly under-appreciating the long-run potential of economic growth and the benefits of a less volatile tax regime.

Standard & Poor’s frets over Oklahoma’s “persistently weak revenue collections” yet seems to treat ever-increasing government spending as sacrosanct. Yet even S&P—which has a dubious track record of accuracy, objectivity, and impartiality in bond ratings—recognizes that Oklahoma has a much stronger fiscal position than many flawed media reports and opportunistic, agenda-driven commentary by some politicians would suggest.

Still, there is some truth in S&P’s concerns regarding Oklahoma’s recent revenue shortfalls. Public policy must address these concerns. Unfortunately, both S&P and key executivebranch officials in Oklahoma provide the wrong solution.

Oklahoma’s anemic economy, in part caused by low energy prices but more broadly due to issues in economic competitiveness, must be addressed to solve the problem of chronic revenue shortfalls. This means enhancing economic competitiveness in Oklahoma through pro-growth economic reform, not further stymieing the economy through higher taxes.

Oklahoma needs to diversify its economy by fostering substantive growth in industries outside the energy sector. This will bolster overall economic performance, increase earnings and the performance of labor markets, and reduce the impact of energy prices on Oklahoma’s economic well-being and on annual tax returns.

The only viable pathway to substantive diversification through broad, fast-paced, dynamic economic transformation is by creating a climate that offers a more competitive economic policy regime to entrepreneurs.

William Freeland is an independent public policy analyst, research economist, and data scientist with a decade of experience in public policy research and advocacy. He has worked as a research analyst and economist for the American Legislative Exchange Council (ALEC), as an economist at the Tax Foundation, and as a member of the research faculty at the George Mason University Law and Economics Center.

Jonathan Small is the president of the Oklahoma Council of Public Affairs. A Certified Public Accountant, he previously served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden.

www.ocpathink.org

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A Tribute to State Question 640

By Jonathan Small

As lawmakers navigated through the final days of the 2017 legislative session, with debates over budget gaps and proposed tax increases, some who love the idea of soaking the taxpayers for all they can get bemoaned the existence of one of the most important constitutional safeguards in state history: State Question 640, passed overwhelmingly by the voters in 1992.

If it wasn’t for that pesky 640, they wailed, we could jack taxes up as much as we want. This, of course, was precisely the purpose of that landmark constitutional amendment: to protect Oklahomans from tax consumers.

Prior to 1992, bare legislative majorities raised taxes time and time again, most notably in the early 1980s after the oil bust. They were determined to keep state government on its spendthrift course, even while Oklahoma businesses and families were swimming upstream through a serious extended recession.

But when voters said “enough!” with 640, the tax-raising authority was rigidly curtailed. Under its provisions, taxes could not be raised during the last week of the legislative session, all revenue-raising measures had to originate in the House of Representatives, and both houses of the Legislature had to approve any tax increase by a supermajority of at least 75 percent. Alternatively, voters could approve a tax increase at the polls.

No longer was the annual tax increase the go-to strategy of the big-government advocates.

Some then claimed that 640 would hamstring government forever, making any revenue-raising measures impossible to pass. But that has turned out to be untrue.

In 2010 and 2011 alone, legislators deployed bipartisan supermajorities to pass bills that raised some $200 million in new state funds and $268 million in matching federal dollars.

Also, Oklahoma has raised personal income taxes since 640 was adopted by voters.

Oklahoma voters are not inevitably tax-averse. They just want any tax increase to have broad public support and to be spent responsibly for the public good. They also sought to block the common instinct of many government officials to raise taxes endlessly to feed the unsustainability of government. That’s what State Question 640 sought to assure, and it has been a resounding success.

We should all be thankful that Oklahoma voters were wise enough 25 years ago to pass State Question 640. The mad dash to address an $878 million budget shortfall in the closing days of this year’s legislative session focused almost entirely on raising taxes.

But Oklahoma’s budget issues are not due to too few, or too low, taxes. They stem from two clear causes— an extended recession that hit the core oil and gas industry especially hard and the persistent failure of state leaders to truly address the convoluted, wasteful structure of government.

Given that total state spending is at an all-time high, it’s clear that many opportunities for spending reform still exist.

But if we too easily give government more money, they’ll just find a way to spend it. And then, they’ll be back next year asking for more.

This landmark constitutional amendment is protecting Oklahomans from tax consumers.

And given that total state spending is at an all-time high, it’s clear that many opportunities for spending reform still exist.

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PERSPECTIVE // July 2017

Jonathan Small is the president of the Oklahoma Council of Public Affairs. A Certified Public Accountant, he previously served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden.

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@OCPAthink 2

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Brent Bushey, executive director of the Oklahoma Public School Resource Center (OPSRC), speaks at the May 25 meeting of the Oklahoma School Choice Coalition. Thanks to online "course choice," Bushey pointed out, students at even Oklahoma's smallest rural public schools can take Advanced Calculus.

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Education researcher Michael Q. McShane discusses how educational choice can benefit rural Oklahoma at the May 25 meeting of the Oklahoma School Choice Coalition, held on the OCPA campus in the Advance Center for Free Enterprise.

Formerly at the American Enterprise Institute, McShane is the director of education policy at the Show-Me Institute, a public policy think tank in Missouri. Citing data from The Brookings Institution, McShane pointed out that 61 percent of Oklahoma students have at least one private school within five miles of where they live.

3

OCPA trustee Frank Keating discusses the state budget with a reporter from FOX 25 during a recent interview at OCPA.

4

OCPA president Jonathan Small (right) discusses the state budget with Grant Hermes, a reporter for News 9, the CBS affiliate in Oklahoma City. Contrary to conventional wisdom, total state spending in Oklahoma is at an all-time high.

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QUOTE UNQUOTE “Much of the media is now just another part of the partisan divide in

“[W]e could say that the public schools’ monopoly on public

the country with Republicans not trusting the ‘mainstream’ media and

educational funds is actually in tension with both of the First

Democrats seeing them as reflecting their beliefs.”

Amendment’s religion clauses. The absence of some sort of

Mark Penn, co-director of the Harvard–Harris Poll, a collaboration of the Harvard Center for American Political Studies and The Harris Poll

voucher program (at least for low-income students) is in tension with the Establishment Clause because it promotes secularism in children’s formal education. It is also in tension with the Free

“$205,025” Total annual compensation for Ponca City school superintendent David Pennington

Exercise Clause because it places a substantial burden on the ability of parents to fulfill one of their most serious religious duties.”

“The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a

Philosophy professor Melissa Moschella, author of To Whom Do Children Belong? Parental Rights, Civic Education, and Children’s Autonomy (Cambridge University Press, 2016)

most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever,

“My communications director spends hours every day

and which would nowhere be so dangerous as in the hands of a man who

correcting false stories and headlines. Don’t assume it’s true

had folly and presumption enough to fancy himself fit to exercise it.”

just because it’s in the news.”

Adam Smith

Congressman Justin Amash (R-Mich.)