OCTOBER 2016
OKLAHOMA COUNCIL OF PUBLIC AFFAIRS
ALSO IN THIS ISSUE Higher Sales Tax Bad for Business School Choice Improves Public Schools Higher Ed Bloat Wastes Millions Life-Changing School Coming to OKC
In Case You Missed It As Obamacare’s opponents continue to be vindicated, OCPA president Jonathan Small says Oklahoma’s decision to resist the Medicaid expansion is looking better and better.
Economist Byron Schlomach, a scholar-in-residence at the Institute for the Study of Free Enterprise at Oklahoma State University, says that despite Oklahomans’ relatively low incomes, the state spends handsomely on higher education.
bit.ly/2bGd4VO
bit.ly/2aw8AFL
The Catoosa school board is spending $1.5 million for a press box at the football stadium.
OCPA distinguished fellow Andrew Spiropoulos reminds us of “both the foolishness of raising taxes during a recession and the devastating effects of cannibalizing the sales tax base.”
bit.ly/2bTtnj4
Patrick Deneen tells OCPA’s Trent England that students’ ignorance is not a failure of the public education system but rather its crowning achievement.
bit.ly/2blYSSR
OCPA distinguished fellow Andrew Spiropoulos says that for poor states like Oklahoma, the most important metric for judging policy proposals is whether they foster rapid economic growth.
bit.ly/2bmSTPe
bit.ly/2bW4LG0
More black parents are homeschooling their kids.
bit.ly/2bq9Nt7
PERSPECTIVE
Even amid the steady drumbeat of sky-is-falling headlines about school finance, SoonerPoll finds that Oklahomans continue to support parental choice in education.
bit.ly/2bMIUDz
A Princeton professor was able to hack a voting machine in seven minutes flat.
Brandon Dutcher, Editor Alex Jones , Art Director
OCPA Trustees
OCPA Researchers
Blake Arnold • Oklahoma City
David Madigan • Lawton
Perspective is published monthly by the
Glenn Ashmore • Oklahoma City
Tom H. McCasland III • Duncan
Oklahoma Council of Public Affairs,
Robert D. Avery • Pawhuska
David McLaughlin • Enid
Inc., an independent public policy
Lee J. Baxter • Lawton
Lew Meibergen • Enid
Douglas Beall, M.D. • Oklahoma City
Ronald L. Mercer • Bethany
Steve W. Beebe • Duncan
Lloyd Noble II • Tulsa
John A. Brock • Tulsa
Mike O’Neal • Edmond
organization. OCPA formulates and promotes public policy research and analysis consistent with the principles
David R. Brown, M.D. • Oklahoma City
Larry Parman • Oklahoma City
of free enterprise and limited
David Burrage • Atoka
Bill Price • Oklahoma City
government. The views expressed
Michael Carnuccio • Yukon
Patrick T. Rooney • Oklahoma City
in Perspective are those of the author,
Tom Coburn, M.D. • Tulsa
Melissa Sandefer • Norman
and should not be construed as
Paul A. Cox • Oklahoma City
Thomas Schroedter • Tulsa
representing any official position of
William Flanagan • Claremore
Greg Slavonic • Oklahoma City
Josephine Freede • Oklahoma City
Charles M. Sublett • Tulsa
Ann Felton Gilliland • Oklahoma City
Robert Sullivan • Tulsa
John T. Hanes • Oklahoma City
William E. Warnock, Jr. • Tulsa
John A. Henry III • Oklahoma City
Dana Weber • Tulsa
Henry F. Kane • Bartlesville
Daryl Woodard • Tulsa
Robert Kane • Tulsa
Daniel J. Zaloudek • Tulsa
OCPA or its trustees, researchers, or employees.
bit.ly/2bTtlYJ
Gene Love • Lawton
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 Wendy P. Warcholik, Ph.D. Research Fellow
Larry Arnn
Arthur Brooks
William F. Buckley
George W. Bush
FOX NEWS’ FOX & FRIENDS
Jeb Bush
Dick Cheney
BRIAN KILMEADE OCTOBER 20, 2016 TULSA •
Dinesh D’Souza Mitch Daniels
J. Rufus Fears
Steve Forbes
For more information, contact Rachel Hays at 405.602.1667 or rachel@ocpathink.org
Tommy Franks
John Fund
Artur Davis
Jim DeMint
Newt Gingrich David Horowitz Mike Huckabee
Brit Hume
Laura Ingraham Frank Keating
Charles Krauthammer
Art Laffer
Rich Lowry
Ed Meese
Russell Moore Stephen Moore Peggy Noonan Marvin Olasky
Sarah Palin
Star Parker
Joe Sobran Thomas Stafford John Stossel
Cal Thomas
Dana Perino Michael Reagan
Clarence Thomas
Scott Walker
Paul Ryan
Malcolm Wallop
Jeane Kirkpatrick
John Walton
J.C.Watts
Allen West
Walter Williams
Past OCPA speakers are pictured above.
[ State Question 776 ] Reiterating the Constitutionality of the Death Penalty Description: Article 2, Section 9 of the Oklahoma Constitution, just like the Eighth Amendment in the U.S. Constitution, prohibits “cruel or unusual punishment.” S.Q. 776 would add new language to Section 9, clarifying that capital punishment is not “cruel or unusual punishment.” It would clarify that the legislature can determine methods of execution and specifying that if a
A product of the populist era, the Oklahoma Constitution establishes processes for direct democracy. On the November 2016 general election ballot, Oklahoma voters will decide whether to adopt four constitutional amendments and three changes to state statutes. Some of these measures are as simple as restating current law. Others would make complex regulatory changes or change legal standards in future lawsuits. The Oklahoma Council of Public Affairs does not support or oppose ballot measures. To help voters, we are providing accurate descriptions and analysis of what these ballot measures say and will do if adopted by voters.
method of execution is found invalid, the sentence of death would remain and be carried out by some other valid method.
Impact: When both the U.S. and Oklahoma constitutional prohibitions against “cruel or unusual punishment” were adopted, they were understood not to prohibit capital punishment. Nevertheless, some advocates have claimed and a few judges have held that the death penalty is unconstitutional. The purpose of S.Q. 776 is to reiterate, in the state Constitution, that capital punishment is not unconstitutional in Oklahoma. It also clarifies that the legislature, rather than judges, has the power to determine methods of execution.
[ State Question 777 ] Limiting Regulations of Farming and Ranching Description: This measure would add a new section to Article 2 of the Oklahoma Constitution. It would declare that “the rights of citizens and lawful residents of Oklahoma to engage in farming and ranching practices shall be forever guaranteed in this state.” It would not overturn any regulations enacted through the end of 2014. Any regulation passed later than that, or in the future, by the state legislature would require a “compelling state interest.”
Impact: The text of S.Q. 777 says its purpose is to “protect agriculture,” which it declares “is the foundation and stabilizing force of Oklahoma’s economy.” It could not be used to challenge any laws enacted in 2014 or earlier. For later laws, or anything enacted by a future legislature, S.Q. 777 would require courts to apply the highest legal standard, often called “strict scrutiny,” in legal challenges to state legislation regulating “agricultural technology and livestock production and ranching practices.” Without proof of a “compelling state interest,” judges would strike down any such legislative acts.
Oklahoma Constitution, Article 5, Section 1 ... the people reserve to themselves the power to propose laws and amendments to the Constitution and to enact or reject the same at the polls independent of the Legislature, and also reserve power at their own option to approve or reject at the polls any act of the Legislature.
* State Question 788 to legalize medical marijuana did receive enough signatures to appear on a future statewide ballot, but due to legal challenges it will not be on the ballot this November.
[ State Question 779 ] Sales Tax Increase Directed to State Education Description: This state constitutional amendment would increase Oklahoma’s state sales tax by an additional one percent. The tax revenue would go into a new special fund, from which 69.5 percent would go to school districts according to the state aid formula, 19.25 percent to state universities and colleges, 8 percent to the State Department of Education for early childhood education, and 3.25 percent to the Department of Career and Technology Education. School districts would be required to use some of their funds to raise teacher pay by at least $5,000. The State Board of Equalization would have power to supervise the legislature’s use of the tax increase revenue to ensure it is used to increase spending levels for state education.
Impact: S.Q. 779 would increase spending on state education programs by an estimated $615 million per year. According to the Tax Foundation, it would raise Oklahoma’s average statewide sales tax to the second-highest in the nation. About 61 percent of the tax increase would fund an increase in public school teacher salaries. Oklahoma’s current average teacher salary is $44,921. A study by the 1889 Institute found that when the cost of living is factored into state average teacher salaries, Oklahoma ranks 30th. That study found that a $5,000 salary increase would put Oklahoma at 15th among the states, just behind Texas.
[ State Question 780 ] Reducing Sentences for Nonviolent Crimes Description: This measure amends state laws related to certain drug and property crimes. Possessing illegal drugs would become a misdemeanor crime punishable by up to one year in jail and a fine of up to $1,000. For property crimes like theft, fraud, and embezzlement, the seriousness of the offense and level of punishment are based on the value of the money or property involved. This measure amends a number of property crime statutes so that, in most cases, property offenses relating to less than $1,000 would be misdemeanor crimes punishable by no more than one year in jail and maximum fines of $1,000 or less.
Impact: Felonies are crimes punishable by incarceration for more than one year in state prison; misdemeanors are crimes punishable by incarceration for one year or less, usually served in a county jail. Oklahoma has the second highest incarceration rate in the United States, and spends about half a billion tax dollars each year on corrections. S.Q. 780 would change state law so that the possession of illegal drugs would be a misdemeanor instead of a felony. Manufacturing, trafficking, and selling illegal drugs would remain felonies punishable by long terms of imprisonment. Because of reforms passed this year by the state legislature (after S.Q. 780 was written), most of the reductions in sentences for nonviolent property crimes are already set to take effect this fall.
[ State Question 781 ] Directing Sentencing Reform Savings to Counties Description: This measure will only take effect if voters also pass S.Q. 780. It would require Oklahoma’s Office of Management and Enterprise Services to calculate how much the state government has saved from the reforms made by S.Q. 780 (from fewer people being sent to state prisons) and to transfer that amount of state funds to a new special account. Funds from the account would then be provided to county governments, “in proportion to county populations,” for “rehabilitative services, including but not limited to mental health and substance abuse services.”
Impact: If S.Q. 780 is passed by voters, some people who commit nonviolent crimes will serve their shorter sentences in county jails rather than in state prisons. This means the state will save money, but counties will have higher expenses. S.Q. 781 is intended to capture the state’s savings and make it available to the counties. It earmarks those funds for rehabilitation services, but leaves counties free to design and operate those programs at the local level.
5
[ State Question 790 ] Repealing Article 2, Section 5 of the Oklahoma Constitution Description: This measure removes the following section from the Oklahoma Constitution: “No public money or property shall ever be appropriated, applied, donated, or used, directly or indirectly, for the use, benefit, or support of any sect, church, denomination, or system of religion, or for the use, benefit, or support of any priest, preacher, minister, or other religious teacher or dignitary, or sectarian institution as such.”
Impact: In 2015, the Oklahoma Supreme Court forced the removal of a Ten Commandments monument from the State Capitol grounds. The state Court said that while the monument may have been acceptable according to the First Amendment of the U.S. Constitution, it violated Article 2, Section 5 of the Oklahoma Constitution. In response, state legislators enacted the resolution to send S.Q. 790 to voters to decide whether to repeal this state constitutional language and, in effect, overturn the Oklahoma Supreme Court’s decision.
[ State Question 792 ] Reforming Constitutional Regulations on the Sale of Alcoholic Beverages Description: This measure would replace Article 28 of the Oklahoma Constitution, which regulates alcoholic beverages. It would eliminate the current distinction between “low-point” beer (required to have less than 3.2 percent alcohol by weight) and other beer and would end the prohibition against selling refrigerated alcoholic beverages. Grocery stores could sell beer and wine, but would be required to maintain a license. Liquor stores would be allowed to sell products other than alcoholic beverages, with some restrictions, and could remain open until midnight rather than being required to close at 9 p.m. Consumers could receive direct shipments of wine, but only for personal use, directly from wineries, and with limits on the number of cases.
Impact: Among the states, Oklahoma has some of the most restrictive regulations of the sale of alcohol. S.Q. 792 would reduce some of these regulations, especially by allowing grocery stores to sell beer and wine and by allowing refrigeration of the products in all stores. Some liquor store owners are concerned that the changes will hurt their businesses because of increased competition with less regulated grocery stores. The Alcoholic Beverage Laws Enforcement (ABLE) Commission would remain and would regulate the sale of alcoholic beverages at all stores.
A LIVE Q&A WITH TRENT
OCTOBER 11 AT NOON FACEBOOK.COM/OCPATHINK
For OCPA Impact’s recommendations on the ballot measures, go to OCPAImpact.com.
The Electoral College and Campaign 2016 By Trent England
Every four years, many Americans wind up on the losing side and thus disappointed by the presidential election. No matter how politically correct we get, not everyone can get a trophy on election day. These wins and losses too often color how we see our political institutions. This is certainly true of the often misunderstood Electoral College. It was an Al Gore elector from California who launched the current effort to nullify the state-by-state presidential election process. John Koza’s proposal, called “National Popular Vote,” would use an interstate compact to manipulate the Electoral College and create a quasi-direct election scheme. The instability of the compact would most likely push the country toward more centralized, federal control over all elections (hence support from liberal groups like FairVote and Progressive States Network). The American Founders, particularly the Framers of the Constitution, recognized that who wins or loses power in one or two elections is a shortsighted way to think about political institutions. Rather we should ask what incentives an institution creates and whether it tends toward stability. Remarkably, the Federalists and Anti-Federalists mostly agreed on the genius of the Electoral College. By turning the election of the President and Vice President into a state-by-state affair, the constitutional system contains election administration, as well as disputes, at the state level. It establishes a two-step process which, although blurred today, allows for checks and balances even late in the process. The Electoral College exerts a powerful influence on political campaigns and parties. It forces candidates to build broader coalitions than would otherwise be necessary. This is evident this year. Hillary Clinton cannot win simply by running up her vote total in California or Illinois. (Even 110 percent voter turnout in Chicago cemeteries won’t do it.) Donald Trump cannot win by appealing to just one region of the country, either. Considered this way, the 2000 election was a triumph of the constitutional structure. Al Gore’s narrow popular vote plurality came from winning huge margins in relatively small urban areas. If Gore’s coalition had been just a bit more diverse (or if he had simply won his home state of Tennessee), he would have become president. The same thing happened to Grover Cleveland running for reelection in 1888. Cleveland won a
popular vote plurality with massive margins in Southern states, but he lost the West and most of the North, including all of the five most populous states. Of course, Cleveland would return to the White House four years later after putting together a broader coalition that won both the popular vote and the Electoral College. How is the Electoral College influencing election 2016? In August, the Clinton campaign opened an office in Utah in hopes of “expanding the map” of swing states. A Democrat last carried the Beehive State in 1964, but polls are close there this year. Likewise, the Trump campaign’s strategy seems built around states like Michigan and Pennsylvania where Republicans last won in 1988. Because both parties are dynamic and constantly adapting to win future elections, no party is at a permanent disadvantage in the state-by-state system. Election analyst Nate Silver of FiveThirtyEight.com points out that, after 1988, many pundits were sure Republicans had a lock on the Electoral College. (They were likewise certain, right up to November 1994, that Democrats had a permanent majority in the U.S. House of Representatives.) Silver, in an essay entitled “There is No ‘Blue Wall,’” knocks down current claims that Democrats will keep winning presidential elections. The Electoral College reminds us that we are a compound republic. More than that, it uses the system of states to distribute power over elections and to contain election disputes. A national popular vote would mean national recounts, national rules, and, ultimately, national control. It would also nationalize any election fraud, allowing a phony vote in Chicago to cancel out a legitimate voter in Oklahoma. Whoever wins in the 2016 presidential election, the state-by-state constitutional process of electing the President is worth defending. Trent England serves as Vice President for Strategic Initiatives at the Oklahoma Council of Public Affairs, where he also is the David and Ann Brown Distinguished Fellow for the Advancement of Liberty and directs the Center for the Constitution & Freedom and the Save Our States project. He also hosts a radio program, The Trent England Show, from from 7 to 9 a.m. every weekday on Oklahoma’s AM 1640, “The Eagle.”
7
By Greg Forster
School choice is the bestresearched education issue, possibly the best-researched policy issue of any kind. And guess what? Choice is actually the best-proven method—by far—of improving public schools. If you’re serious about helping public schools, you should be serious about school choice.
8
PERSPECTIVE // October 2016
he number one question about school choice is how it affects public schools. School choice continues to win big political victories: 30 states plus Washington, D.C. now offer private school choice, serving 400,000 students. Nonetheless, for the foreseeable future most students will continue to attend government-owned schools. Big changes take time, even when problems are urgent and solutions that work are at hand. The good news is that the research shows school choice has a positive effect on academic outcomes in public schools. Since 2009, my reports reviewing the research on school choice for EdChoice,
the leading school choice organization, have been titled “A Win-Win Solution.” That’s because school choice is a win for participating students, and it’s also a win for public schools. (It’s a win for the community as well, saving money and strengthening democracy, so it’s actually win-win-win!) The news for public schools is better than ever in the most recent edition of “Win-Win,” just out from EdChoice. There have now been 33 empirical studies examining how private school choice programs in the U.S. affect academic outcomes in public schools. These studies are generally very high in quality,
studies find that public schools exposed to school choice improved their academic outcomes as a result.
including some that come close to gold-standard “random assignment” methods. School choice is the best-researched education issue, possibly the best-researched policy issue of any kind, and how choice affects public schools has been a key focus of that research. Out of 33 studies, 31 find that public schools exposed to school choice improved their academic outcomes as a result. One study, the only study conducted in Washington, D.C., found no visible effect from choice. One study found a negative effect on public schools. Probably the main reason school choice improves public schools is that it allows parents to hold schools accountable for serving them. If schools don’t improve services, parents can take their children elsewhere. Monopoly schools know they stand to gain or lose nothing; with choice, good schools can grow and bad ones are threatened. We take it for granted in every other field of human endeavor that monopoly service providers will neglect their clients, while service providers will strive harder if their clients can leave. The potential to hear people say “I’ll take my business elsewhere” is universally recognized as a necessary restraint on organizational lethargy—not only for businesses but for nonprofits, political parties, universities, and just about everything else. Only in K-12 education is this basic principle of life even controversial. The consistent positive effect of school choice on public schools suggests it shouldn’t be. Other important explanations for these results include student/school matching and fiscal effects. Diverse students have diverse needs, and no one school can be the right school for every child; choice allows students to find the best schools to serve them, and that effect would benefit those for whom the best school is in fact their assigned district school. And choice is usually a fiscal benefit to public schools as well, because when a student leaves a public school, its revenues go down but its costs typically go down more. The two studies that don’t fit the pattern don’t disrupt the general research consensus in favor of school choice on this point. In fact, the D.C. study that found no visible effect actually reinforces it. That program is the only school choice program in America that contains a “hold harmless” provision, financially rewarding the public schools for being so bad that their students want to leave through
the choice program. It’s no surprise if a program that intentionally insulates public schools from any effects produces no visible effects on public schools. The one negative study is a surprising puzzler. Out of 10 studies conducted on Florida’s program targeting failing public schools, nine found a positive effect on targeted schools, but one—by Daniel Bowen and Julie Trivitt—found a negative effect. They write: “Despite the exhaustive data available, we are not currently able to explain the negative effect…definitively.” Given that nine other studies find a positive effect, it is likely this one is merely an anomaly. Some amount of error is inevitable in science, and any large body of studies will inevitably contain a small number of studies where error determines the final result. That’s why you should never trust the findings of any one study, regardless of what they are. Keeping up with the research is a never-ending task. No sooner had I released the latest edition of the “Win-Win” report than the Fordham Institute published yet another new study. In it, David Figlio and Krzysztof Karbownik find that Ohio’s voucher program targeting failing public schools improves reading and math scores in public schools where students are eligible for vouchers. This study improves on the two previous studies of the Ohio program (one of which I conducted), both of which also found it improved public schools. Figlio and Karbownik had access to individual student data, rather than having to use aggregate school-level scores, which is more accurate. They also use a “regression discontinuity” method, comparing schools that landed just barely above and just barely below the threshold for voucher eligibility. This is a better apples-to-apples comparison of schools. Choice is actually the best-proven method—by far—of improving public schools. If you’re serious about helping public schools, you should be serious about school choice. Greg Forster (Ph.D., Yale University) is a senior 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.
9
Increasing Oklahoma’s Sales Tax Is Bad for Business By J. Scott Moody and Wendy P. Warcholik
The sales tax is perceived as a “good tax” because it taxes consumption and therefore minimizes tax-induced distortions in the rest of the economy. For example, a do-it-yourself homeowner who goes to Home Depot to buy a hammer to hang a picture is doing so for personal use, i.e., consumption. Yet, that same hammer could have been bought by a local carpenter who will use it to build cabinets that will be installed in new homes. In this case, the hammer is a business investment. But the sales tax does not distinguish between who buys the hammer and for what purpose. This is not an academic exercise. This process plays out for millions of products that are sold in Oklahoma each year—products that could be used by consumers or businesses, ranging from printer paper to lawn mowers to smartphones, just to name a few. In fact, according to a recent study from the Council on State Taxation, 47 percent of Oklahoma’s sales tax was paid by businesses in fiscal year 2014. Alas, the negative impact of the sales tax on businesses does not end there. During the manufacturing of the hammer, the sales tax was actually paid multiple times as it moved through the production process. The business buying the raw wood to make the handle, or buying the metal to make the head, paid the sales tax on the transaction. (We use this example for illustrative purposes; states try to avoid this negative impact by exempting many products from the sales tax, so the extent of sales tax exemptions varies by state.) This is called sales tax pyramiding, and it results in the final user not only paying for the sales tax at the register, but also for some or all of the previous sales taxes paid during production which are embedded in the final price of the good or service. Depending on the industry, the extent of sales tax pyramiding can vary dramatically. For instance, Washington commissioned a study to examine the pyramiding issues in that state’s gross receipts tax (a sales tax with few exemptions). The study found that manufacturing was hit particularly hard, ranging from a high of 6.7 times for food production to 2.6 times for printing and publishing. As such, the sales tax burden unfairly hit some industries harder than others. Adding insult to injury, sales tax pyramiding can negatively impact the cost of
10
PERSPECTIVE // October 2016
living by raising the overall cost of goods and services. One comprehensive study published in the National Tax Journal found that many products exhibit sales tax over-shifting where “an increase in [sales] tax revenue of one dollar per unit increases the price by more than one dollar.” Oklahoma already has the 6th highest state and local sales tax in the country, according to the Tax Foundation. This high sales tax rate can drive consumers to do their shopping in neighboring states or localities—since Oklahoma and many neighboring states allow complex local-option sales taxes. The Internet also entices consumers with sales-tax-free online shopping. Such cross-border or virtual shopping created from sales tax differences hurts local businesses that must contend with high sales tax rates. Overall, further increasing Oklahoma’s sales tax from its already-nosebleed levels will create a significant, negative blemish on the state’s business climate. Manufacturing, in particular, will spend precious resources avoiding the higher sales tax rate and resulting sales tax pyramiding rather than investing in new equipment and hiring new workers. OCPA research fellow J. Scott Moody (M.A., George Mason University) serves as chief executive officer of Federalism in Action. Formerly a senior economist at the Tax Foundation and a senior economist at the Heritage Foundation, he has twice testified before the Ways and Means Committee of the U.S. House of Representatives. Moody is the co-creator (with Wendy P. Warcholik) of the Tax Foundation’s popular “State Business Tax Climate Index.” His work has appeared in Forbes, CNN Money, State Tax Notes, The Oklahoman, and several other publications. OCPA research fellow Wendy P. Warcholik (Ph.D., George Mason University) directs the Family Prosperity Initiative for the American Conservative Union Foundation. She formerly served as an economist at the U.S. Department of Commerce’s Bureau of Economic Analysis, and was the chief forecasting economist for the Commonwealth of Virginia’s Department of Medical Assistance Services.
Don’t Blame ‘Underfunding’ for Soaring College Prices By Vicki Alger
Death, taxes, and rising college prices—these are among life’s few certainties. Tuition and fees increases over the past five years at Oklahoma’s public higher education system are among the country’s highest, according to The College Board. The State Regents for Higher Education blame “underfunding,” but that excuse doesn’t hold water. From 2008-09 through 2015-16, state funding dropped 17 percent, but tuition and fees jumped 38 percent, according to the Regents’ own data. Oklahoma isn’t an isolated example. The Cato’s Institute’s Neal McCluskey found that nationwide college tuition price hikes either matched or exceeded state budget cuts in all but two years from 1992 through 2008. That pattern continued through 2013-14 with overall tuition increases far outpacing state funding declines, 31 percent compared to 18 percent. So where’s the money going? Administration is one culprit. Administrative positions and salaries are on the rise. In fact, Oklahoma ranks fourth-worst nationally for its non-instructional workforce (measured as a percentage of the state’s private-sector workforce). The bloat is so bad that an online University Title Generator has been created that spits out satirical administrative positions such as Vice Provost for the Committee on Neighborhood Diversity with phony six-figure salaries. Sadly, these positions aren’t all that far-fetched. According to Richard Vedder, Ohio University distinguished economics professor emeritus and Director of the Center for College Affordability and Productivity: “Every college today practically has a secretary of state, a vice provost for international studies, [and] a zillion public relations specialists. … My university has a sustainability coordinator whose main message, as far as I can tell, is to go out and tell people to buy food grown locally. … Why?” Of course, skyrocketing college prices are no laughing matter, but neither is blaming taxpayers for not shoveling out more
money—particularly when Bureau of Labor Statistics projections suggest this administrative growth will continue unabated. Research is another college cost driver, accounting for approximately 40 percent of reported instructional costs, according to Vance Fried, director of the Institute for the Study of Free Enterprise at Oklahoma State University. Shrinking the ranks of non-teaching research faculty and putting professors back to work teaching would help undergraduates access the courses they need while saving them $2,000 to $3,000. The Oklahoma State Regents say they’re working “tirelessly” to keep college affordable and reported more than $330 million in system-wide savings over the past five years. With those funds, they could have offset lower state funding, frozen tuition and fees at 2011-12 levels, and still had some $100 million left over. Instead, the Regents kept raising tuition and fees. Currently, around half of all undergraduates will take on more than $20,000 in debt. Meanwhile, up to two-thirds of them don’t complete their four-year degrees within six years—about the same rates as a generation ago. What’s changed is that today’s undergraduates are paying a whole lot more to attend college. Political leaders including former Indiana Gov. Mitch Daniels (now president of Purdue University), former Texas Gov. Rick Perry (who instituted a $10,000 bachelor’s degree), and former Oklahoma Gov. Frank Keating (one of the governors responsible for Western Governors University) have shown that significant cost savings can be achieved. More citizens can earn a degree with less debt or no debt at all. Oklahoma taxpayers haven’t failed the system by “underfunding” it. The system has failed them by refusing to reform. Vicki Alger, Ph.D., is Research Fellow at the Independent Institute in Oakland, California, and author of the new book Failure: The Federal “Misedukation” of America’s Children.
11
With a Boost from a School Choice Program, Life-Changing School Coming to Oklahoma By Patrick B. McGuigan
One of the nation’s most effective college prep and work experience programs will come to Oklahoma in one year, thanks to existing state policy providing a steady model for financing. Students from economically challenged backgrounds will be able to access the high-quality high school education model and job program beginning in fall 2017. A total of 32 similar schools, in the Cristo Rey network, are currently in operation across the United States. Renee Alvarado Porter has been named president of the planned Cristo Rey High School Oklahoma City, officials with the program said. “Cristo Rey is a unique model where a rigorous college prep education is coupled with a corporate work study program,” Porter said. “Our students work one day a week in the offices of our corporate partners. A student’s earnings underwrite a majority of their college prep tuition.” In a press release about the school, which will operate from leased space at Oklahoma State University-Oklahoma City, Porter said, “I believe that every child—regardless of zip code or income—has the right to a high quality education that readies them for success in college and in a career. I feel deeply humbled and blessed to help establish and lead a school that supports that mission.” Oklahoma City Catholic Archbishop Paul Coakley predicted a major positive impact for students and the city. “I have long been interested in making Catholic secondary education accessible to a wider segment of our community. Cristo Rey offers an affordable opportunity for an excellent Catholic high school education to those students whose families might never have considered such an option. Its unique model provides valuable training and work experience for young men and women as they prepare for higher education and for the workplace.” Helping to bring the vision into reality is one of the state’s most prominent business and civic leaders, Gene Rainbolt, who founded BancFirst in Oklahoma City. He embraced the program after becoming familiar with one of the existing schools in Cleveland, Ohio, in recent years.
12
PERSPECTIVE // October 2016
“In the course of my travels, I met a lovely, very bright and accomplished woman named [Susan Brooks] Murphy,” Rainbolt said. Murphy, a well-known business owner and philanthropist in Ohio, “is involved with Cristo Rey [at St. Martin de Porres School] in Cleveland. She told me the stories about that school’s many successes, including its students who work to help pay for their tuition at Cristo Rey. “I learned the details about the marvelous education these students receive. I also learned that the students develop an ability to socialize with others of different backgrounds as a result of their work experiences. “Based on my many years helping programs with young people from a wide variety of backgrounds, and in education with children who face challenges, I’ve learned that many of them do not feel they belong in professional settings. The students who go to the Cristo Rey schools learn that they do
Oklahoma’s Current Private School Choice Programs 1.
The Lindsey Nicole Henry Scholarship Program for Students with Disabilities is a private-school voucher program enacted in 2010. For more information, go to bit.ly/1YrHIXh.
2.
The Oklahoma Equal Opportunity Education Scholarship program is a tax-credit scholarship program enacted in 2011. Donors wanting to help students at schools like Cristo Rey can contribute to a scholarship-granting organization and receive a 75 percent tax credit. For more information, go to bit.ly/2cbYfeZ.
Cristo Rey students nationwide receive a rigorous education while also gaining valuable corporate experience.
belong. They gain experiences that will last them a lifetime. “When the leaders here in Oklahoma City formed the Cristo Rey feasibility committee to study establishment of a Cristo Rey school, they contacted me. I told them that not only am I not a Catholic, but I’m not even a very good Methodist. They told me they wanted me involved anyway. So, I replied to ‘count me in.’ “I want to share something broader, and that is my mantra on education policy issues. Until Oklahoma gives every child the opportunity to be all that he or she can be, we have not succeeded as a society. “I’m all about equality of opportunity. The opportunity gap in Oklahoma is enormous. I’m involved in these issues because I want to everything I can to close that gap,” Rainbolt said. Porter said the Cristo Rey model can be implemented in Oklahoma thanks to the Catholic Schools Opportunity Scholarship fund. “The majority of the contribution can be directed to Cristo Rey to provide scholarships to our low-income students. The tax credit scholarship is a terrific way to support the school and ensure more Oklahoma children get a highquality education.” Individuals or businesses can make financial gifts through the Catholic Schools Opportunity Scholarship Fund. Those resources can be used to support education at Cristo Rey and other schools. Discussing the system in the interview, Porter continued, “Cristo Rey schools across the country are changing lives and
Photo provided
providing opportunities for academic and personal success and fulfillment where that opportunity might not have existed before. I’m excited to do that in our community in Oklahoma City, and to provide another option for children who are serious about learning and bettering themselves. I think we can have a profound impact on these children and their families, and I’m thankful for everyone who worked so hard to make this possible. “Cristo Rey graduates are completing four-year colleges at a rate above the national average and more than twice the rate of their low-income peers. Every child should have the option to attend a high quality education to allow them to succeed.” While state law already allows the tuition scholarship program, Porter said quality education could be bolstered through creation of Education Savings Accounts (ESAs), which thus far have fallen short after long debate in the state Legislature. “Passage of an ESA would allow parents to direct a portion of their student’s state funding in a variety of ways to help their student succeed, including paying private school tuition like Cristo Rey,” Porter said. Patrick McGuigan (M.A. in history, Oklahoma State University) is the editor of CapitolBeatOK.com and appears weekly as a commentator on NEWS 9, the CBS affiliate in Oklahoma City. He is a member of the Oklahoma Journalism Hall of Fame. McGuigan is the editor of seven books on legal policy and the author or co-author of three books, including Ninth Justice: The Fight for Bork.
13
Higher Ed Bloat Wastes Millions By Brandon Dutcher
As Perspective readers well know, OCPA is devoted to public policy research and analysis. But what you may not realize is that in OCPA’s 22-year history we also have raised $127,000 and awarded it to Oklahoma students to attend college. That’s a pretty substantial amount, especially when you consider that scholarship-granting is not even our mission as an organization. But it shows just how strongly we believe in higher education. But we also believe in higher education reform. We believe in higher education efficiency and productivity. You may have seen in the news recently that, in response to the current downturn in the oil and gas industry, Oklahoma City University’s Meinders School of Business announced a 37 percent decrease in tuition for its graduate-level energy programs. As Steven Agee, dean of the business school, explained: “Given the energy industry’s response to the downturn, with layoffs, cutbacks, and even some reorganization filings, we thought it would be appropriate to restructure the price of our educational products to assist current and prospective students.” Mr. Agee told Paul Monies of The Oklahoman: “We thought this was a good time to show our support for students at a time when some of the other colleges and universities are raising their tuition.” By way of contrast, officials in Oklahoma’s public higher education system claim they have no choice but to raise tuition because taxpayers and their elected representatives are stingy when it comes to subsidizing higher education. But that’s not true. “Despite Oklahomans’ relatively low incomes, the state spends handsomely on higher education,” writes economist
14
PERSPECTIVE // October 2016
Byron Schlomach, a scholar-in-residence at the Institute for the Study of Free Enterprise at Oklahoma State University. “On average,” Dr. Schlomach says, “states devote 8.1 percent of their state and local spending to higher education. Oklahoma devotes 10.4 percent of its spending to higher education. While states spend an average of about 1.6 percent of their GSP on higher education, Oklahoma spends 1.9 percent of its GSP on higher education.” Unfortunately, much of the money is gobbled up in non-teaching overhead costs. As the chart below indicates, Census data show us that the non-instructional workforce in Oklahoma’s higher education system (as a percent of the privatesector workforce) is an astonishing 61 percent higher than the national average. That’s the 4th highest level in the nation. “To get back to the national average,” OCPA noted in a recent memorandum, “Oklahoma’s higher education system would have to shed 12,033 non-instructional workers—to 19,701 workers from the current level of 31,734 workers. This would result in total annual savings, on average, of $328,226,106 in wages and salaries—in addition to the millions of dollars in supplemental benefits that would be saved.” With $328 million a year, tuition costs could be reduced substantially. Brandon Dutcher is OCPA’s senior vice president. He is editor of the book Oklahoma Policy Blueprint, which was praised by Nobel Prize-winning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His articles have appeared in Investor’s Business Daily, WORLD magazine, Forbes. com, Mises.org, The Oklahoman, the Tulsa World, and 200 newspapers throughout Oklahoma and the U.S.
2 1
3
4
@OCPAthink 1. OCPA trustee Bill Price speaks at a July 29 meeting of the Oklahoma School Choice Coalition. A former U.S. attorney who now serves on the Oklahoma State Board of Education, Mr. Price is chairman of the Oklahoma School Choice Coalition, which meets monthly at the Advance Center for Free Enterprise on the OCPA campus. 2. OCPA president Jonathan Small tells the NBC affiliate in Oklahoma City that school officials who claim to want more money for teacher pay simply aren’t making it a priority. To learn more, go to http://bit.ly/2bpUDcA. 3. OCPA’s Estela Hernandez (left) is pictured here on August 9 in her role as a judge in the 2017 “Oklahoma Teacher of the Year” competition. Pictured at right is Myron Pope, vice president for student affairs at the University of Central Oklahoma, who also served as a judge in the contest. 4. The July 29 meeting of the Oklahoma School Choice Coalition also served as a birthday party for the late Milton Friedman, a Nobel Prize-winning economist and school-choice pioneer, who would have turned 104 on July 31. Pictured here are some youngsters enjoying delicious treats from Roxy’s Ice Cream.
15
QUOTE UNQUOTE “Only in Oklahoma could you fail eighth-grade math and
“Medicaid cards enabled holders for a $3 copay to get the hundreds of pills a
still qualify to preside over the entire state budget.”
‘freedom from pain’ doctor prescribed. The patient could use some pills and sell
Former Oklahoma state Rep. Mike Mass, reflecting on his political career
others on the street for thousands of dollars.” Marvin Olasky, explaining how Medicaid laxness contributed to America’s opioid epidemic
“Oklahoma is not a ‘low-revenue’ state at all.” Economist Byron Schlomach, a scholar-in-residence at the Institute for the Study of Free Enterprise at Oklahoma State University. Dr. Schlomach writes that “out of the 50 states and D.C., as a percentage of GDP, Oklahoma’s state and local governments are 36th in how much they extract from the state’s GDP in taxes and fees.”
“Social justice, and that includes racial justice, is essential to higher education.” T. Elon Dancy II, Associate Dean for Community Engagement and Academic Inclusion at the University of Oklahoma
“It’s time to admit that public education operates like a planned economy, a bureaucratic system in which everybody’s role is spelled out in advance and there are few incentives for innovation and productivity. It’s no surprise that our school system doesn’t improve: It more resembles the communist economy than our own market economy.” Albert Shanker, president of the American Federation of Teachers, writing in The New York Times on July 23, 1989