Perspective - November 2015 by OCPA

November 2015

OKLAHOMA COUNCIL OF PUBLIC AFFAIRS

In Case You Missed It In a new OCPA video, Ronald Reagan and some prominent Oklahoma Republicans make a strong case for parental choice in education.

ocpa.us/EdChoiceGOP

OCPA’s Trent England says the Judicial Nominating Commission empowers a small special-interest group and hides the politics inherent in judicial selection.

ocpa.us/1jOmF0r

OCPA president Michael Carnuccio says it makes no sense to spend millions of dollars warehousing nonviolent offenders.

ocpa.us/1OmlTEK

Stressing the need for civil asset forfeiture reform, OCPA’s Trent England says we need “a bright line between policing and privateering.”

ocpa.us/1QZHoZG

Attorney and financial professional Joel Griffith reports on the work of OCPA and OCPA Impact to phase out Oklahoma’s income tax responsibly over time.

ocpa.us/1OYvGkn

Writing in the Tulsa World, OCPA’s economists note that Oklahoma’s employment of non-instructional workers in higher education is a startling 82 percent higher than the national average.

ocpa.us/1OmmgPJ

The average private school tuition in Oklahoma—$4,467 for elementary schools and $7,121 for high schools—is lower than Oklahoma’s public school costs.

ocpa.us/1L0bJG4

OCPA’s economists say raising the Oklahoma sales tax will hurt consumers and small businesses.

ocpa.us/1Q87jOE

In a Google Hangout hosted by The Oklahoman, OCPA’s Jonathan Small made the case for parental choice in education.

ocpa.us/1FTvBM3

PERSPECTIVE OCPA Staff

OCPA Trustees

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

Blake Arnold • Oklahoma City

David McLaughlin • Enid

Glenn Ashmore • Oklahoma City

Lew Meibergen • Enid

Robert D. Avery • Pawhuska

Ronald L. Mercer • Bethany

Alex Jones .............................................Art Director

OCPA Researchers

Lee J. Baxter • Lawton

Lloyd Noble II • Tulsa

Sarah Andrews .......................Content Marketing Specialist

Steve W. Beebe • Duncan

Mike O’Neal • Edmond

Michael Carnuccio ...................................................President

John A. Brock • Tulsa

Bill Price • Oklahoma City

Brandon Dutcher .................................Senior Vice President

David R. Brown, M.D. • Oklahoma City

Patrick T. Rooney • Oklahoma City

Trent England ..........Vice President for Strategic Initiatives

Paul A. Cox • Oklahoma City

Melissa Sandefer • Norman

Dacia Harris .........................Development Projects Manager

William Flanagan • Claremore

Thomas Schroedter • Tulsa

Rachel Hays .........................................Development Director

Josephine Freede • Oklahoma City

Richard L. Sias • Oklahoma City

Ann Felton Gilliland • Oklahoma City

Greg Slavonic • Oklahoma City

John T. Hanes • Oklahoma City

Charles M. Sublett • Tulsa

Ralph Harvey • Oklahoma City

Robert Sullivan • Tulsa

John A. Henry III • Oklahoma City

Lew Ward • Enid

Henry F. Kane • Bartlesville

William E. Warnock, Jr. • Tulsa

Alex Jones ......................................Communications Director Trey Malone ....................................... Research Assistant Renae Page ................................................Executive Assistant Jonathan Small ................................Executive Vice President Hannah Wallis ............................Communications Associate

Robert Kane • Tulsa

Dana Weber • Tulsa

Kenny Yoder ................................... Operations Associate

Gene Love • Lawton

Daryl Woodard • Tulsa

Teresa Yoder ........................................Director of Operations

Tom H. McCasland III • Duncan

Daniel J. Zaloudek • Tulsa

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 Adam Luck, MPP Research Fellow Jayson Lusk, Ph.D. Samuel Roberts Noble Distinguished Fellow Matt Mayer, J.D. Research Fellow J. Scott Moody, M.A. Research Fellow Andrew C. Spiropoulos, J.D. Milton Friedman Distinguished Fellow Wendy P. Warcholik, Ph.D. Research Fellow

Perspective is published monthly by the Oklahoma Council of Public Affairs, Inc., an independent public policy organization. OCPA formulates and promotes public policy research and analysis consistent with the principles of free enterprise and limited government. The views expressed in Perspective are those of the author, and should not be construed as representing any official position of OCPA or its trustees, researchers, or employees.

Poll Shows Oklahomans Support Civil Asset Forfeiture Reform By Trent England

A long-established principle of property law is that no person has a right to the proceeds of their criminal activity. Yet what if a government official merely suspects, rather than proves, the crime? Does government still get to seize personal property? In Oklahoma today, the answer is yes. Civil asset forfeiture allows district attorneys to confiscate a citizen’s car, house, or cash without a criminal conviction. In fact, the district attorney may never even file criminal charges. Because the process is “civil,” a citizen can lose his property simply because he cannot prove he is not a criminal. Public opinion research conducted in September shows most Oklahomans agree: This is not the way it is supposed to work in the United States of America. In fact, as the chart below shows, Oklahomans across the political spectrum recognize the need for better protections for citizens’ property rights. At the same time, most of the respondents also support local law enforcement. While some district attorneys claim the move for civil

asset forfeiture reform is an insult to law enforcement, the poll results show this is untrue. Oklahomans respect the public servants who work so hard to keep us safe. Just like supporting the Fourth and Fifth Amendments in the Bill of Rights does not make a person anti-police, the Oklahomans who want to limit government power to seize private property turn out to be strong supporters of law enforcement. State Sen. Kyle Loveless introduced civil asset forfeiture reform legislation this year and plans to push the issue in the 2016 legislative session that begins in February. Trent England (J.D., George Mason University) is vice president for strategic initiatives at OCPA, where he also serves as the David and Ann Brown Distinguished Fellow for the Advancement of Liberty. A former legal policy analyst at The Heritage Foundation, England has contributed 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 writings have appeared in The Wall Street Journal, the Christian Science Monitor, and numerous other publications.

www.ocpathink.org

TEACHER SHORTAGE SPECIAL

A Closer Look at Oklahoma’s Teacher Shortage Talk of a pending teacher shortage comes every decade. (In between, there’s talk of massive teacher layoffs.) While the talk rarely has translated into disaster, there’s no question that it causes districts and school boards to panic. In the search for solutions, technology, new collective-bargaining agreements, smarter licensing regulation, and better pay all need to be on the table.

By Kate Walsh

Some Oklahoma school districts have a real problem. They can’t hire enough teachers and are scrambling to put warm bodies at the head of their classrooms. In early August, districts across the state reported they were short more than 800 teachers. The problem is not new. The Oklahoma State School Boards Association says that, last school year, districts struggled to fill about 1,000 positions. If the pattern persists—if the people who hire teachers have to compromise standards year after year—it’s not going to be long before the workforce will include a lot of people you wouldn’t want teaching your child. In many districts, the difficulty has been finding teachers who are qualified to teach students who are still learning English and hiring teachers in science, math, and special education. This mirrors the national situation. But Oklahoma school administrators say that this year even elementary teaching spots, traditionally in excess supply, were going unfilled. That development illustrates the serious difficulty of recruiting for some communities. Nationally, the country’s 1,400 teacher preparation institutions have been turning out more teachers than there are jobs for, particularly in the elementary grades. (Visit nctq.org to see some of the supply and demand

PERSPECTIVE • November 2015

data we have collected for the most recent year available, 2012-13, around elementary teachers.) On paper, at least, there should not be a shortage. Oklahoma’s teacher preparation programs graduated 962 aspiring elementary teachers for 570 openings that year. Oklahoma is way down the list of states that over-produce teachers. But the unfilled jobs seem to suggest that too many of its potential recruits either never get a teaching job or leave the state to teach elsewhere. Pay is almost certainly a factor. In our groundbreaking report, Smart Money: What teachers make, how long it takes and what it buys them, Tulsa came in 109th out of 125 cities for the lifetime earnings teachers accrue, while Oklahoma City was 117th. In both districts, it takes more than three decades to begin earning more than $75,000—far longer than in other professions. Consider that exemplary teachers in Pittsburgh—who have the No. 1 place in the National Council on Teacher Quality (NCTQ)’s study— earn well over $1 million more during their careers than their counterparts in Oklahoma’s two biggest cities. Much as many people want to resist believing it, the teaching profession cannot be managed as if it were exempt from market forces. To attract teachers, especially those in

Staffing every position in every school, no matter how far out of the way, just isn’t practical. hard-to-fill positions like STEM, districts and states must be willing to offer competitive salaries. We also have to accept that some teachers need to be paid more because the market demands it. Typically, physical education teachers—who don’t have a lot of other career options—are paid the same as chemistry teachers, who generally have many more lucrative choices. Consider also that districts disadvantage themselves when they require new teachers to start at the lowest step on the salary schedule, no matter what their backgrounds. This virtually uniform practice tells content experts—the retired physicist or the ex-military officer—that they should take their skills anywhere but the classroom. What mid-career person wants to be paid as if nothing

Typically, physical education teachers— who don’t have a lot of other career options—are paid the same as chemistry teachers, who generally have many more lucrative choices.

she or he has done before counts? Let’s also not discount the importance of removing regulatory policies that discourage qualified persons from teaching. Emergency certificates are not always a bad thing—if they’re being given to professionals who have real content expertise and who are working on completing coursework that would help them be effective. When we allow anyone to teach simply because they can breathe and stand on two legs, the health of the profession suffers. Meanwhile, Oklahoma is far from alone in having particular difficulty attracting teachers to rural communities. The key to addressing those shortages— until or unless the state or others offer enticing incentives—lies in much higher pay for doing a tour of duty in rural areas (not just a $1,000 bonus but increments of $15,000 and up). It also requires us to solve our infrastructure issues so that technology can be used. Small districts may have no choice but to “pipe in” specialized teaching. Staffing every position in every school, no matter how far out of the way, just isn’t practical.`

Talk of a pending teacher shortage comes every decade. (In between, there’s talk of massive teacher layoffs.) While the talk rarely has translated into disaster, there’s no question that it causes districts and school boards to panic. It’s a level of panic that causes policymakers to make bad decisions— for the teaching profession and for kids. It’s a short walk from “We have a crisis” to “We have to lower standards.” If all people are thinking about are declining enrollments and open jobs, teacher prep institutions will be encouraged to keep their already pitifully low admission standards, and states will toy with lowering the rigor of teacher licensing tests. That will take us nowhere good. If we want talented people to become teachers—if we want the profession to have stature and respect—we have to structure a profession that is attractive to them. Assuming government projections are even remotely accurate, the drop in teacher prep enrollment isn’t likely to lead to general shortages, not at their

current rates. Further, a decline is not necessarily a bad thing, provided it isn’t the better prospective candidates who are making other career choices. While universities might like the resulting tuition revenue, it’s not healthy for a profession to systematically overproduce, and not only because it suppresses wages. The reality is that there is not going to be a single solution to real shortages like those that exist in Oklahoma. Technology, new collective bargaining agreements, smarter licensing regulation, better pay—all these things need to be on the table. If we really care about giving every child an effective teacher, we have to end some of the nonsensical things we’re doing. We definitely can’t let all comers become teachers. Kate Walsh is president of the National Council on Teacher Quality, a nonpartisan research organization based in Washington, D.C., whose focus is driving student achievement through improving teacher preparation.

www.ocpathink.org

TEACHER SHORTAGE SPECIAL

Evidence Shortage for Teacher Shortage By Andrew J. Coulson

According to recent news reports, many states are facing a teacher shortage. This is said to be proven by a Google search returning blog posts and news stories in which some people claim there is a teacher shortage. But is that true? The claimants could be uninformed, misinformed, or even have incentives to cry “shortage!” when there isn’t one. For instance, consider this U.S. government program for cancelling teachers’ loans: 34 CFR 674.53(c) enables Federal Perkins Loan borrowers who are full-time teachers of mathematics, science, foreign languages, bilingual education or any other field of expertise where the State educational agency determined there is a shortage of qualified teachers to qualify for cancellation of up to 100 percent of their loan repayment. Hmm. But let’s not speculate. The federal government’s National Center for Education Statistics compiles data on public school enrollment and teacher employment. To verify the claims of teacher shortages nationally and in Indiana, for example, I charted the data in the figure at right. [OCPA economist Scott Moody has created a similar chart for Oklahoma on page 7.] For the United States as a whole, we see that there are fewer pupils per teacher today than at almost any time in the past 50 years. Put the other way, we currently have more teachers per pupil than we’ve had in the past—with the exception of a brief period last decade. In the case of Indiana, the pupil/teacher ratio is about the same as it was in 1982. The difference between Indiana’s ratio and that of the nation as a whole is currently less than one student/teacher. Clearly, the nation has

PERSPECTIVE • November 2015

been on a very long teacher-hiring binge. Since 1970, the number of teachers has grown six times faster than the number of students. Enrollment grew about 8 percent from 1970 to 2010, but the teaching workforce grew 50 percent. There are a lot more public school teachers per child today, so how can districts and states still claim to be facing “teacher shortages”? In some areas, the shortages are said to be restricted to teachers of certain subjects or grade levels. But if that is so, it only begs the question: why did the system hire so many teachers in the other subjects where there were not shortages—decade after decade? Wouldn’t it have been wiser not to hire so many new teachers over the last 50 years in the other subjects that were not facing shortages? Had the nation not gone on what seems to be an acrossthe-board teacher hiring binge since 1970, districts would have more money at their disposal today to offer teachers in truly hard-to-fill positions. As my erstwhile colleague Marie Gryphon has noted, there are “large differences among teachers in their impacts on achievement, and … high-quality instruction throughout primary school could substantially

Sources: National Center for Education Statistics, Digest of Education Statistics, https://nces.ed.gov/programs/ digest/current_tables.asp; Oklahoma Council of Public Affairs

offset disadvantages associated with low socioeconomic background. [….] The group noted that good teachers matter more than smaller class sizes. Rivkin and his colleagues found that raising teacher quality by one standard deviation would improve student achievement more than a very expensive class-size reduction of 10 students per class.” And not only have U.S. public schools favored quantity over quality in their long-term hiring behavior, they have been found to make systematically poor choices among the available candidates: Ballou found that administrators were no more likely to hire high-ability teaching candidates than candidates of lower tested ability. He writes: “Applicants from better colleges do not fare better in the [public school teacher] job market. Indeed, remarkably, they do somewhat worse.” That was the case despite substantial evidence that higher tested ability of teachers is one of the most reliable indicators of superior classroom performance. [Gryphon 2006, italics added] Research shows that the brighter candidates are likely to become better teachers, but also that they are less likely to be hired by public school districts in the first place. Another respect in which the nation’s public school systems invite teacher shortages upon themselves in highdemand subjects is their erection of barriers to entering the teaching profession. States generally require candidate teachers to obtain a 4-year degree from a state-accredited

teachers’ college. These credentials tend not to be portable between states. Nor, as Gryphon reported, have state teacher credentials been shown to confer a meaningful benefit on students. The desire to drive up teacher quality is worthy, but there are more empirically supported ways of doing so. One is competition. Gryphon writes that “schools subjected to competition hire more teachers who have the specific qualities that have been tied to performance by past research: high tested ability and experience with math and science.” So does America have a “teacher shortage” writ large? No. We had 22.3 pupils/teacher in 1970 and 16 pupils/teacher in 2012. Compared to the past, we are rolling in teachers. If we have too few in some fields and too many in others, it is for the reasons described above—mistakes in policy and/ or execution. In Indiana, for example, the ratio went from 17.5 to 17.4 over the past 30 years. If there are subject-specific shortages, they are the result, again, of policy and execution. Andrew J. Coulson is a senior fellow in the Center for Educational Freedom at the Cato Institute. He serves on the Advisory Council of the E.G. West Centre for Market Solutions in Education at the University of Newcastle, UK, and has contributed to books published by the Fraser Institute and the Hoover Institution. This article first appeared August 23, 2015, on the website of the Cato Institute.

www.ocpathink.org

TEACHER SHORTAGE SPECIAL

Other Voices on “There must be less rhetoric so we can have an honest conversation and a commitment to changing how we do things. Together, we have to develop a long-term plan that addresses the teacher shortage, student testing, and bloated administration levels. Schools cannot continue to operate as they have in the past.”

Rep. Michael Rogers (R-Broken Arrow), vice chairman of the House Education Committee, August 25, 2015

“Do we really have a shortage of teachers today, compared to historical levels? ... [We] employ over 150% as many teachers as we did in 1970, to teach only 109% as many students. In other words, the number of teachers has grown five times faster than enrollment. That does not mean that there couldn’t be a small portion of districts in the U.S. that really need to hire teachers, but it does mean that there is no ‘national teacher shortage’ compared to historical levels of employment. To anyone who claims otherwise, we can only ask: a shortage compared to what?”

Andrew J. Coulson, Cato.org, August 10, 2015

“There’s no doubt that there are some positions that, no matter how large the teacher surplus, are difficult to fill. Teachers fight over positions in the suburbs, but avoid troubled urban schools and isolated rural ones. Teachers with particular skills, including training in special and bilingual education, as well as those with real math and science degrees, are in high demand. We don’t need to raise the salaries of all teachers to reduce vacancies—we need to target our resources toward recruiting the teachers we really need.”

OCPA distinguished fellow Andrew Spiropoulos, The Journal Record, April 30, 2015

PERSPECTIVE • November 2015

“In the education-establishment monopoly, prices don’t adjust to market conditions. Further, when the establishment has the power to expropriate property (via taxation) for refusal to pay for education (output), the power is not in the hands of the consumers (parents/taxpayers /children). Rather, the power is in the hands of the establishment which receives the rents. The consumer is certainly not empowered to effectively solve the shortage problem, especially when it is beneficial for the establishment to make policy decisions that create these so-called shortages. The only real solution is to break up the monopoly by expanding school-choice opportunities.”

OCPA economist Wendy Warcholik, Tulsa World, December 31, 2014

“Our teachers need competitive wages. The 33 percent increase in the number of non-teaching staff members in Oklahoma schools from Fiscal Year 1992 to FY2013 when our enrollment grew by 14 percent and the number of teachers only grew by 11 percent is concerning at the least and merits a legislative review. If the growth of non-teaching staff had even been equal to the 14 percent increase in the number of students, it would mean roughly $294 million dollars would be available annually to significantly raise the salaries of our classroom teachers. These are dollars that could have addressed teacher compensation, but instead the education lobbyists would have everyone believe that the legislature is the only group responsible for being efficient with state tax dollars when we should all share in that responsibility.”

Rep. Chad Caldwell (R-Enid), a member of the House Education Committee, August 25, 2015

“In a market system any mismatch of supply and demand is quickly removed through the workings of the price system. If there are more engineers than are demanded by producers, then the wages of engineers fall and less people wish to become engineers. If there is a shortage of plumbers, then the wages of plumbers will rise and more people will become plumbers. Because Oklahoma’s education system more closely resembles the socialist system than the market system, excess numbers of history teachers will not result in a lowering of the wage of history teachers, nor will a shortage of science teachers result in an increase in the wage of science teachers. As a consequence mismatches continue for years, with history teachers teaching science as the solution.”

Hillsdale College economist Gary Wolfram, Perspective, May 2001

“As for the so-called teacher shortage, the unions have been inventing stories about a teacher shortage consistently for decades. The number of teachers can go up or down, it doesn’t matter; there’s always a shortage. If so, the best thing we can do is move students out of public schools, where the teaching profession is stymied by numerous union-backed barriers to entry, and into private schools that are free to hire talented young people into the profession.”

Education researcher Greg Forster, Perspective, May 2015

“Some teachers do earn more in surrounding states, primarily because local school boards in those states choose to pay more than Oklahoma’s local school boards. Total funding for Oklahoma schools during the 2013-14 academic year reached nearly $5.5 billion, an all-time high. So why don’t Oklahoma’s local school districts just pay more? A recent report from the U.S. Department of Education shows it may be because local school boards have committed a growing percentage of their funding to salaries and benefits for administrative and nonteaching staff. Oklahoma taxpayers are doing their part, providing the resources necessary for a quality education system that can competitively attract great teachers and lessen the impact of the national teacher shortage on our children. It’s time for the Legislature to ensure school districts get those hard-earned dollars where they are needed.”

Oklahoma House Speaker Jeff Hickman, The Oklahoman, September 13, 2015

www.ocpathink.org

The For-Profit Nightmare Before Christmas By Greg Forster

If there’s one thing the government education blob knows it hates, it’s “profit.” Inside the closed epistemic bubble in which the unions and their allies talk to each other, that word is all you have to invoke to establish that something is evil. And by repeating this association over and over in the centers of cultural power, they have taught millions of ordinary Americans to unconsciously assume that profit can’t mix with education. A typical post from the blog of the Oklahoma Education Association (OEA) provides a window into this mindset. Posted shortly before Christmas in 2013, it darkly warned that instead of Santa, a “sinister sleigh” was approaching Oklahoma, “being pulled by those whose intent is to devalue public education and then turn education into for-profit businesses. … Alas, their motives are far from good. The bottom line for them is profit. Profit made at the expense of our children’s education.” The great irony is that this educational blob is itself dependent upon profit in numerous ways. It’s a story as old as history: “It’s different when we do it.” In fact, the problem is not the existence of profit, but how the profit is made and who—government or parents—has the authority to decide when it’s being made at the expense of education. It’s interesting to note that the OEA’s list of alleged profiteers contains only one group of actual profiteers. Here are the groups the OEA says are pulling the sinister sleigh: “You know the Arnold Foundation, our State Superintendent, the A-F grading system proponents, Chiefs for Change, Student’s First, testing companies and pension reformers. And then do you recall the most famous group of all? ALEC, the American Legislative Exchange Council.” So let’s count up those malevolent reindeer: a non-profit, a government official, a policy coalition, a non-profit, a non-profit, testing companies, a policy coalition, and a non-profit. If this list of villains points to a need to restrain anyone, it points to a need to restrain non-profits. The OEA could reply that these non-profits are really serving someone’s financial interest—say, their funders’. But the same is true of the OEA, which has spent decades fattening itself and its members and allies, all at the direct expense of school improvement, destroying the futures of Oklahoma children. Aha, but what about those dastardly testing companies? Certainly they have an economic interest and will act to promote it. Again, this by itself makes them no worse (or

PERSPECTIVE • November 2015

What does the education establishment always advocate? More spending. Where does that spending go? A good deal of it goes to for-profit corporations. From textbooks to cafeteria food to school buses, our schools supply the ghouls and vampires of the private sector with billions of dollars of business a year. better) than the OEA. The real question is whether the fact that testing companies make a profit introduces some special new evil. That’s where the story gets really interesting. What’s sauce for the goose is sauce for the gander. What do unions always advocate? More spending. Where does that spending go? A good deal of it goes to for-profit corporations. Testing companies are not the only businesses that sell to schools. From textbooks to cafeteria food to school buses, our schools supply the ghouls and vampires of the private sector with billions of dollars of business a year. The next time the unions demand more spending, ask them to guarantee none of it will wind up in the pockets of those horrible for-profit companies they keep telling us they hate so much. The unions are quick to point out that education reform serves the interests of for-profit businesses. It does—and so does a failure of education reform. In fact, more for-profit businesses are served by pursuing the unions’ tired old agenda than by pursuing reform. This helps explain why the unions have so much more money to advocate their view than the reformers do. What’s that? The biggest thing the unions want schools to spend money on is salaries for school employees? True

enough, but that only puts the problem one step back. Do teachers and principals and guidance counselors and cafeteria workers and bus drivers take only enough salary to cover their own personal needs? Once their bills are paid, do they return the rest of their salaries to the school, saying, “Please, take this back, I don’t want to make a profit off education?” Or do they think it’s okay for them to charge what their services are worth according to the laws of supply and demand? Some school superintendents in Oklahoma make a quartermillion dollars a year. Are the unions prepared to denounce this as “profiteering” at the expense of our schools? Or is it only profiteering when people they don’t like do it? My favorite example comes from education labor reporter Mike Antonucci. He pointed out that teacherunion conventions—where rhetoric about the evils of profit is always abundant—are in fact a big business. Any large gathering of people is an advertising opportunity, and the unions have never been in the least shy about monetizing that opportunity. Try to reserve an exhibit booth at the next big union convention by paying only what it costs to provide the booth; if they turn you down, ask them how they justify such profiteering! Let me be clear: for-profit corporations often do bad things. So do non-profit corporations and government agencies. This is not a debate between virtuous people who want to police the behavior of for-profit corporations and vicious people who don’t. Granted, there are a fair number of rabid freemarket fanatics who will excuse any amount of private-sector wrongdoing if it helps them bash government. But there are at least as many on the other side who have the opposite blindness. The sensible thing to do is find a way to police the behavior of all types of organizations equally. The assumption that profit is evil, or at least that it’s evil to let it come into contact with education, depends on a prior assumption—that for-profit corporations are more likely to misbehave than other kinds of organizations. Hence the resulting approach is to set up the more virtuous types of organizations (non-profit corporations and, of course, the omnibenevolent hand of government) to police the less virtuous type. These allegedly more virtuous organizations thus acquire large amounts of power and, just as important, public permission to use that power aggressively. This is the path to all big-government solutions, whether the old unconstrained union blob or the new centralized federal “accountability.” Of course the solution is not to reverse the system and trust businesses to dictate to government. If you think all organizations are about equally likely to misbehave, you won’t want to set up any one of them as a dictator to control the others. You’ll want to disperse power as widely as possible among as many actors as possible.

Above all you’ll want to keep power in the hands of the one kind of group that really is the most likely to serve its members well—families. Parents can be trusted to look out for their own children virtuously a great deal more than for-profits, non-profits, or governments can be trusted to do anything virtuously. If we put choice—that is, power—into parents’ hands, we’d really see what it looks like to clean up education and get rid of all the organizations whose goal is to use schools as a cover to grab money for themselves. Heads up, OEA. Greg Forster (Ph.D., Yale University) is a senior fellow with the Friedman Foundation for Educational Choice. He is the author of six books, including John Locke’s Politics of Moral Consensus (Cambridge University Press, 2005) and Joy for the World: How Christianity Lost Its Cultural Influence and Can Begin Rebuilding It (Crossway Books, 2014). 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

How to Help Oklahoma’s Rural Hospitals By Steve Anderson

Those who regularly monitor rural America know that one of the surest signs of a town or city about to enter the slide to near-ghost-town status is the loss of their school and/or their hospital. The loss of either one makes it exceedingly difficult for the town’s leaders to recruit future businesses, or even retain existing ones. How bad is the situation with Oklahoma hospitals? Randy Ellis reported August 3 in The Oklahoman: Oklahoma rural hospitals are under financial siege. “It’s very scary right now,” said hospital consultant Val Schott, 71. About 56 percent of Oklahoma’s rural hospitals operated at a financial loss between 2009 and 2013.“I would say probably 70 (percent to) 75 percent of the hospitals in rural Oklahoma are having some kind of financial struggle,” Schott said. Moreover, most rural hospitals are facing extreme difficulty in recruiting and retaining physicians to the rural areas. I think we all understand that the stagnant or negative population growth in some of the rural counties has had an impact, but the hospitals say it goes much further than that. A major part of the problem comes from issues within the Affordable Care Act (ACA). Roger Knak, chief executive officer of Fairview Regional Medical Center in Major County, has faced some tough cashflow issues. He told The Oklahoman that his hospital recently was down to four days of cash on hand to pay expenses. Mr. Knak cites systemic problems with the ACA, including one of the “cost saving” elements that was supposed to help pay for the ACA. The electronic medical records requirement was supposed to not only improve patient service but also reduce costs by finding fraud and waste. The upfront investment in hardware, software, and employee training of this section of the ACA was known to be considerable, especially for cash-strapped rural and inner-city hospitals. The Obama administration had included a federal reimbursement plan for hospitals to help cover these costs. But is anyone surprised that there are problems? As The Oklahoman reported: While the federal government said it would reimburse the hospital for its costs, the hospital had to pay $923,000 up front and then wait for reimbursement, which put it in a financial bind, Knak said. When the hospital was finally reimbursed, it only received a portion of what it was promised, which helped but

PERSPECTIVE • November 2015

didn’t relieve all the financial stress, he said. And the electronic records system reduced productivity in the clinic by 30 percent because it takes doctors longer to navigate, Knak said. But the ACA’s failure to deliver on Mr. Obama’s promise of reducing the uninsured is even more central to the hospital’s problems. The Oklahoman reports: He said proponents of the Affordable Care Act (Obamacare) told hospitals they could expect an increase in the percentage of insured patients to offset other increased costs that hospitals were asked to absorb. But Major County still has 21 percent of its residents uninsured, the same level as before, he said. All of this has compounded a long-running problem in maintaining doctors on staff in rural Oklahoma. Mr. Knak noted that at his hospital, “I’ve been struggling for almost three years to replace a physician who left us.” PMTC Isn’t Working. Try Something New. Oklahoma state legislators can’t fix the issues with the ACA, but there are two immediate actions they can take that will help rural hospitals weather the storm and return to firmer financial ground. And the good news for Oklahoma taxpayers is that lawmakers won’t have to take any more money from taxpayers to do it. First, it is time that one of the “legacy” programs from Oklahoma’s past is eliminated and the funding put to a more productive use. The mission of the Physician Manpower Training Commission (PMTC) is “to enhance medical care in rural and underserved areas of Oklahoma by administering residency, internship, and scholarship incentive programs that encourage medical and nursing personnel to establish a practice in rural and underserved areas. Further, the PMTC is to upgrade the availability of health care services by increasing the number of practicing physicians, nurses, and physician assistants in rural and underserved areas of Oklahoma.” The PMTC is approaching 40 years of attempting to reach that goal. It’s time to face the fact that it’s not working. According to the Governor’s historical budget book, the PMTC received around $6.5 million in fiscal year 2014, of which just under 10 percent went for salary and other employee expenses. Why not repurpose it in a way that more than doubles the $6.5 million and allows individual

communities and their hospital administrators to control those funds? Here’s how to do it. Oklahoma should apply for what is known as an 1115 Waiver under the Social Security Act. Securing a waiver under this Act allows those funds to become eligible for a Medicaid matching payment. One of the principles for obtaining one of the waivers is to “increase access to, stabilize, and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state”—which is what saving those rural hospitals provides. The legislature could sunset the PMTC, allow a skeleton staff to remain to close out the scholarship program and other ongoing programs, and ask the Centers for Medicare & Medicaid Services (CMS) to grant an 1115 Waiver targeted specifically to rural hospitals. There are numerous ways to do this, as I discovered when working for Gov. Frank Keating and was instrumental in designing and implementing the upper payment limit using the 1115 Waiver program. The net fiscal effect of removing the PMTC’s funding and transferring it to an 1115 Waiver program would be to increase the $6.5 million to more than $16 million based on the current Medicaid matching rate. All this would not be available immediately, but if the PMTC is disbanded and issues no further scholarships some funds would free up immediately, and within a very few years the whole amount plus the Medicaid match would be available to disburse directly to rural hospitals. These hospitals could then upgrade facilities and hire doctors and nurses. Let’s be clear: this is not a Medicaid expansion and has no effect on the number of recipients. Properly written, this waiver would only apply to raising reimbursement levels for Medicaid services provided by rural hospitals to make them more financially viable. If the application is limited to that guiding principle, it is almost certain that CMS will approve the waiver. But that’s not all a properly written waiver could do for rural Oklahoma hospitals. Many of these rural communities have a local-tax-based revenue stream flowing to their hospitals in order to keep them operating. Some states already allow Local Hospital Districts, which when formed can use those tax revenues to apply for the same Medicaid match as we discussed in the PMTC situation. Again, this is not an expansion of Medicaid either in Oklahoma tax dollars or number of recipients. It is merely using existing dollars to provide stability to rural health care by increasing payments to doctors and hospitals in those areas for Medicaid services. In fact, we suggest that policymakers give the Local Hospital Districts the option to increase recipient levels or types of services, but only if those residents of the Local Hospital Districts vote an additional tax on themselves to fund it. The condition that must be included for the creation of the Local Hospital Districts would be that in the future, expansions of Medicaid recipient levels or new services can only be done at the local level through the Local Hospital Districts, with the same restriction that it must be funded with local tax dollars approved by their residents.

One of the major inefficiencies of Medicaid has been its statewide expansion approach, which ignores income and health need differences between different areas of the state. Many, if not most, previous Medicaid expansions have been driven typically by major metropolitan legislators, activists, and providers, with little or no attention to the rural areas’ demographic health needs differences. The other major flaw in the current Medicaid structure has been the separation of payer (in the case of Medicaid, it is you the taxpayer) and service recipient. That disconnect has created a system that struggles to provide positive outcomes. Issues are largely approached with the standard call for more money that far too often legislators provide. Imagine the difference in accountability that would come when it requires a vote to tax local citizens for a service or recipient expansion. A local community has a far greater grasp of the needs of those who are poor amongst them than those under the dome in Oklahoma City. Rural Opportunity Zones The combination of the PMTC conversion and the Local Hospital Districts would bring a considerable amount of new funding to rural hospitals. But there is one additional thing state legislators can do to help rural hospitals. In the 2015 legislative session, lawmakers came very close to passing legislation creating Rural Opportunity Zones (ROZ). The basic plan as advanced was to make any individuals who moved to those counties from out of state free from individual income tax for 10 years. Lawmakers could improve the ROZ concept by adding an amendment which says that any medical specialist who moved to a rural community to work in their healthcare system would also be eligible. Would excluding high-income earners from state taxation make a difference in the ability of rural hospital administrators to hire medical staff? Anyone who doubts it might want to call the Ashland, Kansas, hospital administrator and ask him to tell you about his experience with the Kansas ROZ program. I served in the first few years of Governor Sam Brownback’s administration. As one of the primary forces behind the Kansas ROZ passage, I often received letters or phone calls about the program. One such unsolicited endorsement came from the Ashland hospital staff. The letter was so moving that Governor Brownback invited the administrator to attend and be recognized at the State of the State speech. Oklahoma legislators can give rural hospitals the tools they need to help their hospitals—and the cost to Oklahoma taxpayers is nearly non-existent. Steve Anderson (MBA, University of Central Oklahoma) is an OCPA research fellow. A Certified Public Accountant with more than 30 years of experience in private practice, he is currently a partner at Anderson, Reichert & Anderson LLC. Anderson spent two years as a budget analyst in the Oklahoma Office of State Finance, and most recently served as budget director for the State of Kansas. At one time he held 17 state teaching certifications, ranging from mathematics to physics to business. This article is the fifth in a multi-part series on “Reviving Rural Oklahoma.”

www.ocpathink.org

The new Advance Center for Free Enterprise was filled with a diverse audience, including many students and faculty from The Academy of Classical Christian Studies and several state legislators, as OCPA hosted a birthday celebration for the U.S. Constitution. Trent England talked about the constitutional process devised by the Framers for presidential elections and fielded questions on a variety of constitutional topics.

What the Electoral College Can Teach Us About the Constitution By Trent England

The constitutional process for presidential elections is often misunderstood. That is unsurprising, since many of the Framers were at first unsure how it would work. Yet the history of the Electoral College—both its origin and its operation—offers lessons about the Constitution and how to defend it. Principles vs. Pragmatism? The men who made the Constitution were both profoundly principled and fiercely pragmatic. Principles answer the question “Why?” but not “How?” The Framers considered many proposals before agreeing on the final language of Article II, Section 1, of the Constitution. The Electoral College gives the people a voice through state legislatures, which are empowered to decide how best to represent their own state in presidential elections. It is the Framers’ practical design to create both accountability and independence in the executive branch, in order to uphold and perpetuate what James Madison called “republican principles.” Discovery or Invention? Thomas Jefferson was quick to disclaim invention when asked about the Declaration of Independence. Rather, he said, it stated “the common sense of the subject” and “the harmonizing sentiments of the day.” Probably the most inventive work of the Founders was the Articles of Confederation, which was based on political theorizing and failed. In the Constitution, the Framers returned to “experience”—their own and what they gathered from their intense studies of history—as “the oracle of truth.” The Electoral College is a part of the system of states, known as federalism, that the Framers arrived at after disregarding political theorists and relying instead on their own practical experience. Our Role as Discoverers. What is remarkable about the Electoral College is that, over time and with just one slight change made by the Twelfth Amendment, it has worked even better than the Framers expected. Our state-based method of conducting a national election has forced candidates and their political parties to build more national and inclusive coalitions than would be otherwise necessary. Election fraud has been contained to individual states. Never has a nationwide recount been necessary. Every generation of Americans has a duty not merely to understand the Constitution and to obey it, but to learn from our experience and history. Trent England (J.D., George Mason University) is vice president for strategic initiatives at OCPA, where he also serves as the David and Ann Brown Distinguished Fellow for the Advancement of Liberty. A former legal policy analyst at The Heritage Foundation, England has contributed 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 writings have appeared in The Wall Street Journal, the Christian Science Monitor, and numerous other publications.

PERSPECTIVE • November 2015

@OCPAthink 1. OCPA president Michael Carnuccio and Oklahoma Gov. Mary Fallin address the media on October 6 concerning the removal of the Ten Commandments monument from the state capitol grounds. The six-foot-tall granite monument now makes its home on the OCPA campus. 2. At a September 14 lunch at OCPA’s Advance Center for Free Enterprise, U.S. Senator James Lankford discussed some of the latest developments in the nation’s capital. 3. At a recent meeting of the Oklahoma School Choice Coalition held at OCPA, state Rep. Jason Nelson (R-Oklahoma City) talks about some of the children whose lives have been changed by the Lindsey Nicole Henry scholarship program. 4. OCPA president Michael Carnuccio (third from left) discusses Oklahoma’s energy sector at a recent briefing hosted by Lithuania’s foreign ministry. Carnuccio was one of several think-tank CEOs from across Europe and the United States to attend a summit hosted by the Lithuanian Free Market Institute (LFMI), a Vilnius-based think tank.

www.ocpathink.org

QUOTE UNQUOTE “Government is just another word for how we collaborate to prey on the politically unconnected together.”

“We’ve sent to the Congress a tuition tax credit plan and proposed a voucher system to help low- and middle-income families afford the schools of their choice. We’ve proposed education savings accounts to help families save for college education.”

Tony Woodlief

President Ronald Reagan, quoted in “Republicans Embrace Parental Choice in Education,” a new OCPA video available at ocpa.us/EdChoiceGOP

“We do not want anything to take away or distract from the purpose of the organization, which is for students to be heard or share their research or their work in social justice.” Kathy Moxley, director of the OU Women’s Outreach Center, explaining why the word “Sooner” was dropped from the name of “Sooner Mosaic: Social Justice Symposium.” Some students and faculty were offended by the word “Sooner” because of its historical baggage.

“We have a new national passion for moral and historical hygiene, a determination to scrub away remembrances of unpleasant things, such as the name Oklahoma, which is a compound of two Choctaw words meaning ‘red’ and ‘people.’” George Will, in a recent Washington Post column entitled “Out with ‘Redskins’—and everything else!”

“In Jenks Public Schools, campus police physically restrained and handcuffed a second-grade special education student. His crime? He ran to the playground to escape a noisy classroom.” Oklahoma Watch reporter Nate Robson, in an August 20 story about the punishment of special-needs students in Oklahoma