Perspective - September 2014 by OCPA

PERSPECTIVE September 2014

OKLAHOMA COUNCIL OF PUBLIC AFFAIRS

In Case You Missed It In The Wall Street Journal, OCPA distinguished fellow Jayson Lusk comes to the defense of cattlemen, the next targets of the climate-change enforcers. on.wsj.com/1ApH5zX

Want to know a good way to wreck a local economy? Build casinos. tinyurl.com/mfy3dos

Why are Oklahoma policymakers propping up blatantly political organizations (such as the NEA and its affiliates) by collecting dues on their behalf?

OCPA president Michael Carnuccio reminds us again that there is no “revenue shortfall” in Oklahoma. tinyurl.com/k4nvwcg

ocpathink.org/articles/2786

In Oklahoma and elsewhere, tuition tax-credit scholarships are advancing school choice through charitable contributions.

The liberal narrative on Kansas tax cuts is a fabrication designed by those wishing to prevent lower taxes. tinyurl.com/kbbu7fc

dailysign.al/1tKUjEl

Over at the Friedman Foundation blog, OCPA’s Andrew Spiropoulos and Brandon Dutcher say public education funding should go to parents and children, not to a bureaucratic system.

Two OCPA economists say that for the majority of working Americans, the marriage premium is higher (on a percentage basis) than the college premium.

OCPA’s Michael Carnuccio, Trent England, and Jayson Lusk weigh in on the EPA’s latest affront to Oklahoma farmers and ranchers— and to federalism.

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PERSPECTIVE OCPA Staff

OCPA Trustees

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

Blake Arnold • Oklahoma City

Tom H. McCasland III • Duncan

Daryl Woodard • Tulsa

Robert D. Avery • Pawhuska

David McLaughlin • Enid

Daniel J. Zaloudek • Tulsa

Lee J. Baxter • Lawton

Lew Meibergen • Enid

Steve W. Beebe • Duncan

Ronald L. Mercer • Bethany

OCPA Researchers

Brittoni Bobek ........................... Development Coordinator

G.T. Blankenship • Oklahoma City

Lloyd Noble II • Tulsa

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

John A. Brock • Tulsa

Mike O’Neal • Edmond

David R. Brown, M.D. • Oklahoma City

Bill Price • Oklahoma City

Paul A. Cox • Oklahoma City

Patrick T. Rooney • Oklahoma City

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

William Flanagan • Claremore

Melissa Sandefer • Norman

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

Josephine Freede • Oklahoma City

Thomas Schroedter • Tulsa

Ann Felton Gilliland • Oklahoma City

Richard L. Sias • Oklahoma City

John T. Hanes • Oklahoma City

Greg Slavonic • Oklahoma City

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

Ralph Harvey • Oklahoma City

John F. Snodgrass • Ardmore

J. Scott Moody, M.A.

Karma Robinson ........... Vice President for Development

John A. Henry III • Oklahoma City

Charles M. Sublett • Tulsa

Henry F. Kane • Bartlesville

Robert Sullivan • Tulsa

Andrew C. Spiropoulos, J.D.

Robert Kane • Tulsa

Lew Ward • Enid

Gene Love • Lawton

William E. Warnock, Jr. • Tulsa

Lauren Aragon...................................................................... Intern

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

Dacia Harris .................................. Communications Director

Jonathan Small .............................. Executive Vice President Teresa Yoder .................................................... Executive Liaison

Steven J. Anderson, MBA, CPA Research Fellow

Tina Dzurisin

Research Associate

Vance Fried, J.D. Research Fellow

Jayson Lusk

Samuel Roberts Noble Distinguished Fellow

Matt Mayer, J.D. Research Fellow Research Fellow

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.

The MiddleGround is a weekly 30-minute discussion program that airs every Sunday morning at 8:30 a.m. on KOKH FOX 25 in the Oklahoma City media market. Hosted by OCPA president Michael Carnuccio, The MiddleGround features a panel that is quite different from those on the national Sunday morning shows, or even those broadcast locally. The MiddleGround explores a better way to design governement that intrudes less, taxes less, regulates less, and quite frankly louses things up less. For more information on The MiddleGround and to learn how to become a sponsor, please contact Rachel Hays at rachel@ocpathink.org or 405-602-1667.

/TheMiddleGround

@MiddleGroundTV

Through the years in the pages of Perspective, various economists, political scientists, accountants, and others have made the case for low taxation and limited government. Weâ&#x20AC;&#x2122;ve never had a theologian weigh in on the issue, but with certain voices on the religious left calling for high taxes and big government, we are pleased to publish this article by pastor and author David W. Hall. - Editor 4

PERSPECTIVE â&#x20AC;˘ September 2014

It is always gratifying when believers seek to apply the inspired Word of God to social and political matters. Often, though, well-meaning believers superimpose modern customs back onto biblical texts, thinking that they unearth biblical grounds for maximal states characterized by high taxation and big government. While we may appreciate the intent of such articles, such as a recent one in the Tulsa World, we need not agree with many of the conclusions reached, especially if they are molded more by present fads than by the norms of God, whose revealed opinion really is significant for these discussions. Often the distance between cultures may lead one to hazard a facile comparison between the ancient world and modern practice. In these sorts of essays—rather common since the 1960s—authors presume to contextualize large, centralized governments as the norm as if grounded on inspired Scripture. They attempt to persuade that the Hebrew political system may somehow be characterized by these four notions: (1) high taxation; (2) large bureaucracy; (3) expansive safety nets; and (4) mandated income equality (or at least a limiting of wealth). Alas, Moses, Samuel, David, Isaiah, and the New Testament disciples might be surprised to see their governments characterized by those four notions. Perhaps a more thorough review of Scripture would yield more accurate biblical conclusions than the exaggerated notions imposed by some modern partisans. First, let us consider taxation. Rather than tax rates ranging from 30 to 50 percent (more like Sweden than Sinai), several key passages show upward taxation levels closer to the lowest American tax bracket—far from justifying either a progressive tax scheme or a large grab from most citizens’ bank accounts. Joseph’s 20 percent taxation level for a temporary, catastrophic situation (and not treated as normative) was the highest governmental take recorded in Scripture. This unique taxation (20 percent of the crops during abundance) allowed Joseph to store the grain in selected cities (Gen. 41:35), hold it in reserve, and save for the imminent catastrophic famine. Still, insofar as this example touches on the areas of taxation and state protocol, this narrative set of precedents must be harmonized with other didactic

principles. The temporary tax rate for this national emergency, although twice the rate of the tithe, was non-repeatable. Moreover, 1 Samuel 8 exhibits that a 10 percent taxation rate was extreme. For centuries, one of the most compelling scriptures for political formulation was Samuel’s warning not to desire a monarch nor his wide-ranging bureaucracy. In a text that virtually shrieks clanging distress alarms, the Hebrew prophet warned that a king would confiscate 10 percent of seed and livestock (1 Sam. 8:15-17). This level of confiscatory taxation was outrageous at the time, and Samuel thought that such unimaginable level would surely mute the people’s press for centralization. An upper taxation rate of 10 percent, in other words, was considered shockingly oppressive three millennia ago. As we move into New Testament times, we see that usage taxes were common, but nothing like a graduated income tax existed; certain Zionist groups even cheered, “Taxation is no better than downright slavery.” Moreover, a brief history of taxation indicates that Julius Caesar imposed a 1 percent sales tax, but it was not until the fourteenth century that progressive tax rates began. Progressive rates were imposed by the King’s Writ (1629) under Charles I. In America, the first income tax was proposed to generate revenue during the War of 1812. Based on the 1798 British Tax Act, this 1812 proposal called for income tax rates ranging from less than 1 percent to 10 percent. However, it was not adopted. Again in 1861, the income tax proposal was resurrected—this time proposing rates from 3 to 5 percent during an unparalleled national emergency. The Tax Act of 1862 adopted these rates of income tax. During the Civil War, by 1864, these income tax brackets grew to 5 percent, 7.5 percent, and 10 percent. Following the Civil War, a flat rate of 5 percent was adopted, and by 1869, that rate was lowered to a flat 2.5 percent (see www.taxworld.org). Accordingly, not only were doubledigit taxation rates nonexistent in scriptural times, but Samuel’s caveat also held sway until the statist expansion era of the twentieth century. Finally, the comparison of the tithe to a tax is a misappropriation. The tithe was for the church and not for the state. Churches are free to require levels of giving; and of course in democracies, those are voluntary societies—not enforceable by governmental fines or penalties. If the tithe rate were properly 30 percent, as a pastor I’d start planning

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some massive projects. However, this is probably dismissed as a misreading (or liberalizing attempt) of the ancient practices, along with a confusion of spheres. The Jubilee from Leviticus 25 was unique to Israel, and its uniqueness may highlight its temporary nature. Although certain liberation theologians make much of these precedents, they normally invoke these chapters to argue for socialism or communal sharing of goods, rather than for a replication of the exact provisions of Jubilee. Its spirit of equity is more important than its exact stipulations. Most, unless they logically wish to argue for all the Hebrew theocratic notions, admit that such provisions have expired with the state of Israel. One may search high and low to find large governmental agencies mandated by the Lord; the most one will find in scripture is bloated courtiers, commissioned by monarchs or despots—not by God. The Almighty, in other words, never commended a large bureaucracy; those are more associated with over-reaching and hunger for power in recent centuries. Both Old and New Testaments assign much to the family government and to church government, but a modest list of duties for the state is found in Romans 13:1-7 to include providing law enforcement, defense of people, and basic civil order—little more. The scriptural witness is hard-pressed to justify more than the minimal state.

PERSPECTIVE • September 2014

The 1 Samuel 8 passage could be mined for more resistance to bloated bureaucracies. This locus classicus of biblical political theory warns against the danger of centralized power. Should a monarchy result, Samuel issued a caveat that the ruler would force labor, insert oppression into free markets, claim property, conscript military service, and exert himself over the liberty of free citizens. Samuel’s prophecy—see, for example, the many Colonial-era sermons on this key text— was a clarion call against developing a large bureaucracy. To do so, thought this Hebrew prophet (and most who later heeded his counsel), would bring ill to a body politic. If anything, the biblical witness seems to be decidedly in favor of the minimalist state due to fear of human depravity. In his Theological Ethics: Politics (Eerdmans, 1979), the Lutheran Helmut Thielicke, who lived through World War II and also saw post-war Germany grow to its statist orientation, advocated a “minimal state” in an era of totalitarian expansion. Thielicke warned against the totalitarian state because it “necessarily seeks to penetrate every sphere of life and hence to take over the care of children, the chronically ill, the sick, and the aged.” Moreover, “The totalitarian state plays the role of the ‘universal father’; attending men with its claims and services from the cradle to the grave, it forces on them the same kind of dependence as is evident in all other spheres of life.” The modern age has acquiesced to allow the

state to provide many goods and services, whereas earlier God or families were trusted for these. Moreover, the founding document of our country (which was supported by authors and an audience that had studied the specifics of the Scriptures better than most of our contemporaries) shows, to the contrary of the revisionist political catechism, that our nation’s founders resisted large governmental bureaucracy, detested high taxation, had no inclination to strangle wealth, and saw the only safety net as being woven by private agencies such as the family, the school, and the church. Even a cursory review of the causes for independence and the scriptural streams that contributed to it refutes the notion that the consensus of biblical interpretation is pro-big-government. According to the Declaration of Independence (and numerous sermons several generations before it), George III made judges dependent on his own will (for their pay, for starters); he created new offices that became “Swarms of Officers to harass our people and eat out their substance,” and he imposed “Standing armies.” To the colonials, these and other abuses were clear instances of arrogation of power. The American founding document bemoaned bloated bureaucracies that were more reminiscent of Samuel’s “tyranny” (a particularly loaded term with a long history, and thought to be a sufficient justification alone for overthrow) than of valid government.

These and other indictments were not only grounds for the founding of history’s most stable democracy, but were also derived from the view of civil government in the Hebrew Scriptures and rediscovered at the Reformation. They are hardly justifications for large government. The case for expansive social-safety nets might be the most defensible idea in these typical essays arguing for maximal states. It is true that God authorized gleaning as part of the Levitical economy. I suppose that if one wished to snuggle up as closely to the Hebrew custom as possible, one would need to go all the way and suggest this as the sole civil replacement for welfare. Notwithstanding, God did provide for widows, orphans, and the deserted; for safeguards against false witness and dishonest currency measures; and for impartial justice and rudimentary courts. However, there were few groups indicated for communal relief. It was LBJ’s “War on Poverty” in the 1960s that vastly enlarged the remedial works of government. While some have benefited, it remains for historians to judge whether all the incursions by the maximalist state have been exclusively helpful. To summarize most simply, the biblical pattern for care for truly needy groups (see the care for the widows in 1 Tim. 5:1-21) was assigned only to the family or the church. There is simply no

place or category in Scripture for distant, impersonal welfare agencies. States may assign such functions to large or bureaucratic agencies, but that is neither mandated by the Bible nor is it uniformly clear that such is the most helpful approach in all cases. The fourth plank of the modern catechism for statist government suggests that wealth must be redistributed—an axiom of socialism, to be sure. Indeed, all the former planks (i.e., progressive taxation, large bureaucracies, and reallocation of assets to the less wealthy) fit nicely with and require this notion. Thinkers from Plato to Marx have advocated income limitations, but the Bible does not. Abraham was very wealthy, Job was affluent at one time, Solomon was blessed by opulence, and Barnabas used his wealth to support the early church in Acts. And none of these were condemned for wealth per se. Of course, greed, covetousness, and callousness to the poor are routinely condemned. Nevertheless, even the poor may suffer from those sins. Various utopian schemes have fre-

quently sought to equalize incomes, as if income-inequality is the root of human ill. However, as Christianity matured it left behind more of the utopian adolescence and acknowledged that human depravity, more than anything, will preclude utopias, economic or otherwise. Such understanding protects us from the temptation to misread sacred texts. Reformers and the earlier English Puritans knew that God could equally give wealth or poverty—and neither was considered a curse but rather part of the providential ordering of our world. In a properly related posture, the minimalist state embraces private charity, restraining itself for the common good, supporting private and religious efforts rather than ceding those exclusively to large, centralized, and impersonal agencies. As is often the case, those who have gone before us may be better scriptural interpreters. As such, they certainly advocated limited government, free markets (not wealth delimiters), as modest taxation as possible, and concern for the needy assigned to the family, the church, or a private society.

Dr. David W. Hall is the senior pastor of Midway Presbyterian Church in Powder Springs, Georgia, and the author of numerous books, including Savior or Servant: Putting Government in Its Place.

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Tax Cuts in Oklahoma and Kansas Fuel Small Businesses By J. Scott Moody and Wendy P. Warcholik

Over the last decade, Oklahoma has been one of the most aggressive states in the country when it comes to reducing the burden of taxes on taxpayers. Since 2002, the top marginal individual income tax rate has fallen significantly—by 22 percent— to 5.25 percent from 6.75 percent. One of the greatest beneficiaries of lower tax rates has been Oklahoma’s small business community, since many file through the individual income tax code as sole proprietors, partnerships, LLCs, or S-corporations. The top marginal tax rate is particularly important because, based on 2012 IRS data, 85 percent of this pass-through income is claimed by taxpayers earning more than $100,000. (See also our June 2013 Perspective article titled “Who Are Oklahoma’s So-Called ‘Rich’?”) As a result, businesses have responded by generating more income. Chart 1 clearly shows that the growth in proprietor income has outstripped the national average. Between the first quarter of 2000 and the first quarter of 2014, proprietor income in Oklahoma grew nearly twice as fast as the national average (171.2 percent vs. 81.6 percent, respectively)—even with a significant drop due to the “Great Recession.” In fact, Oklahoma had the fastest growth rate in the country. In stark contrast, California, one of the highest-tax states in the country, had the slowest growth rate in proprietor income at only 33.4 percent. Perhaps this is partially driven by the fact that more people and/or entrepreneurs from California are moving to Oklahoma than vice versa. (See our October 2013 Perspective article titled “Money Walks.”) This evidence shows that Oklahoma’s tax cuts (along with the implementation of other pro-growth policies) have been a boon for small businesses, enabling them to create new jobs and income for many Oklahomans. This boon is due also in part

to the state’s commitment to maintain low gross production taxes on capital-intensive oil-and-gas mining activity until costs can be recovered, which has helped create the environment for significant oil-and-gas mining activity in Oklahoma. These tax policies, in turn, create a virtuous cycle of higher government tax collections. As OCPA’s Jonathan Small continues to point out, Oklahoma tax collections are at an all-time high. Of course, success doesn’t go unnoticed. Neighboring Kansas, under Governor Sam Brownback, has recently enacted its own sizable tax cut. Between 2012 and 2014, the top marginal individual income tax rate fell by 26 percent—to 4.8 percent from 6.45 percent. More dramatically, the tax rate for passthrough business income fell all the way to zero! While it is still too early to see the full positive impact of these tax cuts on Kansas’s small business community, the early returns are promising. In the first full year under the tax cuts, from first quarter 2013 to first quarter 2014, the growth rate of proprietor income in Kansas exceeded the national average by 16.7 percent (6.8 percent vs. 5.8 percent, respectively), and was the 7th-fastest growth rate in the country (Oklahoma was the 3rd-fastest at 7.5 percent). Oklahoma policymakers should cheer the fact that their neighbor to the north has decided to cut taxes. A stronger regional economy will lift all boats in both Oklahoma and Kansas. At the same time, Kansas’s bold tax cuts do swing the tax balance into its favor. Oklahoma must respond in kind with another round of tax reductions. And, of course, both Oklahoma and Kansas still lag far behind no-income-tax Texas.

OCPA research fellow J. Scott Moody (M.A., George Mason University) has worked as a public policy economist for more than 17 years. 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. 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) formerly served as an economist at the U.S. Department of Commerce’s Bureau of Economic Analysis, and was the chief forecasting economist for the Commonwealth of Virginia’s Department of Medical Assistance Services. She is a co-creator (with J. Scott Moody) of the Tax Foundation’s popular “State Business Tax Climate Index.”

PERSPECTIVE • September 2014

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Chart 1 As Top Tax Rate Falls, Proprietor Income Increases

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Policy Ideas for Safeguarding Our Children’s Futures By Wendy Warcholik

Given that children are the key to a prosperous economy, what lessons should our political leaders always keep in mind when crafting public policy? Allow me to suggest three. First, the presence of state and national debt is economic theft from our children. Their tax burden as working adults will necessarily be higher because policymakers of their parents’ generation wanted to spend more than revenue allowed. Second, the fertility rate of American women (births per woman) is on the decline. This is a problem. In the words of American Enterprise Institute president Arthur Brooks, “When you stop having the humans, your life is limited and your prosperity is doomed.” According to a February 2013 article by Joel Kotkin and Harry Siegel, “In 2007 the fertility rate in America was 2.12 and had

been holding nearly steady for decades at about replacement rate — the highest level of any advanced country. In just half a decade since, the rate has dropped to 1.9, the lowest since 1920 (when reliable records began being kept), and just half of the peak rate in 1957, in the midst of the baby boom, according to the Pew Research Center.” In a 2013 national poll on parenthood, the Pew Research Center asked mothers and fathers to identify their ideal work arrangement. A full 61 percent of mothers said they would rather work part-time or not at all while 75 percent of fathers preferred full-time work. It is important that policymakers consider the impact of policies on family budgets so that mothers have the opportunity to spend more time investing in their families. Finally, we need a culture that promotes and embraces marriage if we are serious

My share of the national debt is what?! about investing in our children’s futures. In the July issue of Perspective, Scott Moody and I discussed the importance of marriage to people’s finances. And a recent study by Harvard economists (which I wrote about in the March issue of Perspective) found that coming from an intact family was the major determinant of an individual’s upward mobility.

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The Future of School Choice By Greg Forster

There’s no getting around it—compared to the last few years, 2014 brought much less progress for school choice. New programs were created in Florida and Kansas, and an Arizona program was modestly expanded. But if school choice supporters were the kind of people to get discouraged by an off year, choice would have been dead years ago. Instead, we now have 51 private school choice programs in 24 states and Washington, D.C., serving more than 300,000 students. And all the long-term trends are moving in our direction. “Long-term trends—sure,” you might be saying. “That’s exactly what every movement says when the tide turns against it.” And you’d be right! But school choice has more than optimism on its side. It has history. School choice has survived more apparent deaths than the Doctor on Doctor Who. Just like on that show, the bystanders may think the hero is going to die, but those who know him have seen him “regenerate” and come back a dozen times. Those of us who have been following school choice for a long time have seen the same thing. Right from the start of the modern school choice movement, it has had a natural life cycle. The first modern voucher program was created in Milwaukee in 1990, and over the next few years a handful of additional programs were created. Then nothing for a few years, and people began to say the choice movement had failed. Then, from 1998 to 2001, a much more impressive series of victories expanded school choice further than before. And then a few fallow years, and people said it was dead again—just in time for a series of even larger victories, creating and expanding choice programs in 2005-2006. Then another pause, and this time the voices of doom got as loud as they ever

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have. The Washington Monthly published a huge feature on the death of vouchers in 2008. Other periodicals joined in. Even the conservative Weekly Standard published an article on the failure of vouchers. And then, in 2011, came what the Wall Street Journal dubbed “The Year of School Choice.” Early in that year, Washington Post columnist Jay Mathews bet me voucher bills wouldn’t clear more than a handful of legislative chambers. Within weeks, I had won the bet, so we agreed on a new number—and I won that bet, too. Choice had its best year ever. And it kept racking up victories in 2012 and 2013, which is why there are so many programs serving so many students today. It’s a funny thing. Every time we go through this cycle, the victories get bigger. But the inevitable claims that school choice is dead get louder every time, too. It’s almost as if the people on the other side feel like they need to shout more if their declarations of victory are going to be plausible. So no, I’m not worried. And what about those “long-term trends”? Is that just Pollyannaism? Whistling past the graveyard? Let’s start with the most obvious way to look at the long term. Who has the votes of the young? A recent survey by the Friedman Foundation for Educational Choice confirms what common sense suggests: the generation that grew up with the Internet wants choice and customization, not top-down monopoly. Consistently across every type of program—vouchers, tax credits, education savings accounts—the younger people are, the more strongly they support school choice. However, this kind of “cohort effect” can be a tricky thing. One reason the young generation is less wedded to the monopoly system is that they’re not the

ones who benefit from it financially. They will grow up, and as they do, more of them will be in a position to get on the gravy train. That leads to my next long-term trend. The gravy train itself is falling apart. State governments are getting squeezed ever tighter by unsustainable budgets. This year, for the first time in living memory, public school spending went down rather than up. And the terrible thing about a gravy train is this: when the train starts to slow down, the passengers turn on each other ferociously. The infighting will really begin when our trillion-dollar teacher pension promises begin to come due. And then there’s the adaptive success of school choice. Like the Doctor on the BBC show, school choice can take on new forms. The recent invention of education savings accounts—including this year’s new Florida program as well as the one that was expanded in Arizona—is a major breakthrough. Instead of a voucher redeemable once a year at a single school, we give parents an account they can use to purchase any and all kinds of education services; leftover money can be saved up, even for college. That gives parents a lot more control, and eliminates perverse incentives for administrative bloat in private schools. Down the line, better program design will earn more victories. The most important omen for the long term, though, is the war of ideas and moral legitimacy. Nobody takes the school unions and other guardians of the status quo seriously any more. The mask is off; everyone knows they’re all about the gravy train. Moreover, in milder forms like charter schools, the principle of choice has been almost universally accepted on both sides of the political aisle. How long can people go on supporting charters but opposing private choices, especially as it becomes clear charter

A Textbook Case of Misplaced Priorities By Brandon Dutcher

In a recent article discussing a potential income-tax cut in Oklahoma, The Oklahoman reported that state Rep. James Lockhart (D-Heavener), “noting his daughter’s school couldn’t afford to replace 10-year-old, falling-apart textbooks,” is very much opposed to the income-tax reduction. The newspaper quoted Rep. Lockhart as saying, “We can’t even buy textbooks in our schools.” To which John Q. Taxpayer has every right to respond: “Seriously?” One can’t help but recall the federal government shutdown last year, when President Obama selectively closed some national monuments. Sorry, veterans, we have to lock you out of the World War II memorial—the federal government doesn’t have two nickels to rub together. It’s not just Heavener—I’ve heard the can’t-afford-textbooks argument from others, too—but let’s look at Heavener as an example. According to the state Department of Education, the Heavener school district spends $10,193.54 per student (based on average daily attendance). In other words, school officials in Heavener are spending $10,193.54 per student on things that are more important to them than textbooks.

I’m not a school board member in Heavener, so I don’t know what the district’s priorities are. But if textbooks are indeed important, it seems to me that it’s time for the district to re-examine its spending priorities. Have school officials taken a close look at the athletic budget, for example? Have they considered merging with a nearby district? Have they considered putting a textbook allocation into their next bond election (as other Oklahoma districts have done)? Have they privatized all non-teaching personnel? As education researcher Greg Forster has noted in these pages, “There’s absolutely no reason for any sector of government to directly employ bus drivers, cafeteria workers, janitors, or any of the rest of this category. The whole enchilada needs to be privatized posthaste. You wouldn’t just eliminate unnecessary positions that are there due to featherbedding, although that’s considerable. More important, though, you’d be able to pay the market rate for the positions you kept, instead of hyperinflated civilservice salaries and benefits (think pensions). And you’d be able to fire people if they didn’t deliver good services.”

And while we’re on the subject of not delivering good services, it’s worth noting the Global Report Card results showing that, when compared to 25 developed countries, Heavener students score at the 23rd percentile in math. In other words, the average Heavener student performs more poorly than 77 percent of students in the typical developed country. Yet despite this poor performance, apparently every administrator and every teacher continues to draw a paycheck. Has there been any discussion of renegotiating the contracts of underperforming educators and redirecting some of the money to new textbooks? These are just a few big-picture suggestions; it’s up to the school board and school superintendent to roll up their sleeves and go over the budget line by line. Granted, government monopolies are not known for their budgetary agility, but if textbooks truly are a priority, then school officials—with $10,193.54 per student at their disposal—need to find a way to buy textbooks. Yes, it may present a management challenge, but this is the sort of problem the Heavener superintendent is paid $98,022 annually to solve.

schools don’t have enough freedom to reinvent education? As Matt Ladner likes to say, these days the “cool kids” in education are the entrepreneurs who invent radically new kinds of schools. A few years ago, everyone was atwitter about the revolutionary potential of these “greenfield” experiments. Recently, though, the bloom is off the rose. People are beginning to realize that the world of tomorrow isn’t going to be so easy to build. Where will they turn for the tools they need to truly reinvent education? Universal choice is looking better and better. All this is not to say success is guaranteed. Of course it isn’t; it never is. The

unions and their friends still have plenty of money and power, and that counts for a lot. Reformers have squandered opportunities in the past through strategic and tactical blunders, and may do so again. For that matter, any or all of the trends I’ve mentioned may change. Nonetheless, I still think it’s our battle to lose. Martin Luther King, sitting in

that Birmingham jail, didn’t think he was losing. He knew he was winning. Never mind that the segregationists had all the money, all the laws, all the hoses, all the dogs, and all the guns. King had a just cause and an entrepreneurial spirit. Now that’s a long-term trend worth watching.

Greg Forster (Ph.D., Yale University) is a senior fellow with the Friedman Foundation for Educational Choice. He is the author of five books, and 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. His latest book is Joy for the World: How Christianity Lost Its Cultural Influence and Can Begin Rebuilding It (Crossway Books, 2014).

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Statewide School Choice Program Would Benefit Wage-Earners By Mark Costello

Every child in America should have the same educational opportunity as do President Obama’s children. They enjoy school choice. However, the existing model of education for the last fifty-plus years places the interests of union officials, bureaucrats, and elite professionals before the interests of the child. This observation is not new or novel; rather, it is a succinct analysis of the problem children and their parents face today. One of the legally defined duties of the Oklahoma commissioner of labor is to “foster, promote, and develop the welfare of the wage earners of this state.” I can think of few better ways to do just that than to dramatically improve the level of education our high school graduates receive, better preparing them for college and the workplace. One key ingredient in any effort to help kids learn more is to afford them and their families the right to choose where they will attend school. School choice—specifically via vouchers, tax credits, or Education Savings Accounts (ESAs)—would boost thousands of Oklahoma young people from the mediocrity that is unfortunately associated with many public schools to the more challenging learning environments in schools chosen by their parents. That increased learning would translate into more young people who are better prepared for college and work, and in turn to a stronger economy for all Oklahomans. By any measure, school choice would do a great deal for the wage earners of this state. The best scholarly work on the impact of school choice has been accumulated by Dr. Greg Forster, who surveyed the empirical research on private-school choice. Study after study—by researchers at Harvard, Stanford, Princeton, the Federal Reserve, and elsewhere—finds that students given the option of attend-

12 PERSPECTIVE • September 2014

ing better schools have better academic outcomes. Best of all, the public schools many of them left behind also improved, thanks to the beneficial impact of competition. If families are leaving a school in large numbers, something is wrong. Those public schools with the courage to see this reality and respond will get better, too. Vouchers, tax credits, and ESAs have been enacted in a number of jurisdictions, and the results have been impressive. Before President Obama moved to kill the District of Columbia’s school voucher program, students who had escaped the often-dismal public schools were graduating at rates well above their peers in the public schools. College enrollment was also up among those fortunate young people. In Florida, where a tax-credit program allows corporations to help fund private school scholarships (Oklahoma has a similar program), a half-decade of research by Dave Figlio of Northwestern University shows steady and consistent academic improvement among the scholarship students. These are not cherry-picked students, as some opponents of school choice might claim. Figlio reports that the scholarship students disproportionately came from low-performing schools and were themselves likely to have been in academic trouble before their transfers. And as Benjamin Scafidi pointed out in

a recent analysis for OCPA, ESAs also save school dollars. Allowing parents to take part of the money they paid in taxes to educate their kids in a non-public school is a bargain for everyone. How important would a statewide school choice program be for Oklahoma’s children? It’s no secret that our public schools vary widely in quality. Some are excellent, thanks to strong community and parental support and an enrollment base that allows them to offer a full range of strong academics. For decades, many Oklahoma parents have sought out those public school districts, often moving specifically to assure that their children would be able to attend them. But that’s not an option available to everyone. Moving to a place like Edmond or Norman may sound attractive; it is unfortunately out of reach for many families because of income or geography. Their children deserve the same option—to find and choose a school where they can learn in a safe and challenging environment. Simply put, a statewide school choice program for Oklahoma would afford greater educational opportunities to tens of thousands of children, challenge every public school to raise standards, and boost our economy and quality of life as the first generation of schoolchoice children enters the workforce better prepared to thrive and prosper.

A fourth-generation Oklahoman born in Bartlesville, Mark Costello is Oklahoma’s commissioner of labor. He founded AMCAT, a telephone software company, in 1984, and has since founded several technology companies. He has taken a sabbatical from his business ventures to serve as labor commissioner.

The Soul of Moderation: Black Oklahomans for School Choice By Patrick B. McGuigan

It is September, which means another crop of black children is about to have their lives ruined in lousy schools with lousy teachers and lowered expectations. Commentators will again give the benefit of the doubt to a dysfunctional education establishment that values the prerogatives of employees more than the needs of children. Now that I have your attention: Do black children and all children in American schools deserve choices? Tracy McDaniel, after years of service in the regular public schools, brought the magnificent KIPP (Knowledge Is Power Program) model to Oklahoma City. He runs what is the best-performing public school in the metropolitan area. His students come from the poorest ZIP code in urban Oklahoma. They learn classics, memorize poetry, and cipher and decipher like kids from Casady, our city’s best known private prep school. McDaniel told me recently, “We have more kids than ever before at KIPP. I am for inner-city school choice, not for universal choice.” He explained, “Inner-city kids are trapped and can’t get all the opportunities they need. All kids should have a chance to go to and through college. The bottom line for me is ‘quality seats’ in classrooms.” He told me in late August, “Our goal now is sharing best practices and helping the school district improve.” Tracy is my favorite school choice moderate. State Rep. Anastasia Pittman, D-Oklahoma City—soon likely to be state Sen. Pittman—said in an email exchange she “supports schools that work.” Previously, Pittman said she advocated for choice because “it will make our school districts better, it will make our families stronger.” A successful non-KIPP charter school model is ASTEC (Advanced Science and Technology Charter) School, with 750 students and 75 staff. The chief operat-

ing officer at ASTEC is my high school classmate Harold Roberts, a conservative closely allied with Freda Deskin, a moderate I respect. Choice sparks better performance. Last year, in an essay for the Huffington Post, Prof. Matthew Lynch of Oklahoma’s Langston University described school choice as “a movement that strives to improve education in all schools through the old-fashioned business concept of competition.” Ideas like this aren’t black or white. They are universal. What is more important than quality education? Who is more deserving than the poorest of the poor? Giving ghetto children the same options as suburban kids or private-school kids is the best way to assure better quality education and equity for all. More aggressive than McDaniel or Pittman or even Roberts is Jabar Shumate, now a state Senator from north Tulsa. He looks like a linebacker, but talks like Dr. Martin Luther King, Jr. I met Shumate when he worked for David Boren at the University of Oklahoma in the mid-1990s, and I always knew he would be a leader. The young Democrat is, along with state Rep. Jason Nelson, ROklahoma, the Legislature’s leading advocate of choice in education. In an interview this summer, Shumate told me, “I am thankful for what has been accomplished in Oklahoma in terms of school choice. Oklahoma is the only state to have a Democratic governor sign a voucher bill, the Lindsey Nicole Henry special-needs scholarship. That accom-

plishment alone thrust Oklahoma into the national spotlight. “With the expansion of charter school laws, a robust tax credit program, and scores of educational reform initiatives, Oklahoma has become a pacesetter in the country for educational choice. “As we look forward, we still have a great deal of work ahead to ensure quality programs and equitable access for those in our most vulnerable communities. However, I am confident that we have built an educational environment where families are empowered to make decisions about their future, and for that, it has been worth the fight.” I’m not sure Oklahoma is yet a pacesetter, but Shumate’s words imply great potential in development of existing state school choice models. Black leaders supporting school choice include Rev. Donald Tyler of Tulsa’s Greater Grace Temple, Deborah Brown of Tulsa, and Dr. Betty Mason of St. John Christian Heritage Academy, whose school is sponsored by St. John Missionary Baptist Church and its pastor M. L. Jemison. Charters? Vouchers? Tax-credit scholarships? Education Savings Accounts? Parent triggers? How about all of the above, with Jabar Shumate in charge. I’ll settle for just a couple of these in 2015, then a couple more in 2016. The soul of moderation. For the children. “All of the above”—every possible sensible option for the children, their parents, their communities, and our country.

Patrick McGuigan (M.A. in history, Oklahoma State University) is editor of CapitolBeatOK.com. He is the editor of seven books on legal policy, and the author or co-author of three books, including Ninth Justice: The Fight for Bork. Last year the Washington Post political blog, “The Fix,” designated McGuigan one of the three best political reporters in Oklahoma.

www.ocpathink.org

@OCPAthink 1. OCPA was proud to be a partner in a recent “Four Star Leadership with General Tommy Franks” program at Oklahoma Christian University. OCPA’s Jonathan Small (right) is shown here introducing Gen. Franks. 2. Syndicated columnist Star Parker, author of the book Uncle Sam’s Plantation: How Big Government Enslaves America’s Poor and What We Can Do About It, discusses welfare reform and school choice with key state lawmakers on August 14 at OCPA. 3. At the 2014 annual meeting of the American Legislative Exchange Council (ALEC), Jonathan Small was given the organization’s “Private-Sector Member of the Year” award. ALEC works to advance limited government, free markets, and federalism at the state level through a nonpartisan public-private partnership of America’s state legislators, members of the private sector, and the general public. 4. OCPA’s Jonathan Small and Trent England discuss federalism with Oklahoma Attorney General Scott Pruitt on July 30. The meeting was also attended by a reporter from The New York Times.

14 PERSPECTIVE • September 2014

OKLAHOMA FREEDOM NETWORK

Two Winning Policies for Job Growth Two winning policies for job growth

Low income taxes and labor freedom are attractive to both workers and businesses, providing states that embrace those policies Low withincome greater taxes job growth. When the two combined, theworkers results can particularly effective. But that as shown below, low and labor freedom areare attractive to both andbe businesses, providing states embrace income taxes by themselves are not enough to counter the effects of Forced Unionization laws. Right-to-Work states, however, those policies with greater job growth. When the two are combined, the results can be particularly effective. But as perform well even with higher income taxes.

shown below, low income taxes by themselves are not enough to counter the effects of Forced Unionization laws. Right-to-Work states, however, perform well even with higher income taxes. Highest Income Tax Rate

Change in Employment, 1990–Today Rank

Of the 15 states with the highest job growth rates since 1990, seven have NO INCOME TAX and six others have TOP INCOME TAX RATES LOWER THAN THE STATE AVERAGE

of 5.6 percent.

Only one state in the middle-third of job creators, Kansas, has a top rate below the state average ...

... while nine of the 19 worst-performing states have top rates below the state average.

0.0% 5.0% 3.2% 4.5% 7.4% 0.0% 4.6% 6.9% 0.0% 0.0% 0.0% 0.0% 4.9% 0.0% 5.3% 6.8% 9.9% 6.0% 9.9% 5.8% 6.0% 5.8% 6.0% 4.8% 9.0% 7.0% 7.7% 7.0% 6.0% 9.0% 6.6% 13.3% 5.0% 6.5% 5.0% 5.8% 11.0% 3.4% 5.0% 6.0% 9.0% 8.0% 3.1% 5.2% 8.8% 5.0% 5.4% 4.3% 9.0% 6.0% 6.7%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

Right-toWork State?

Nevada Utah North Dakota Arizona Idaho Texas Colorado Montana Alaska Wyoming South Dakota Florida New Mexico Washington Oklahoma Nebraska Oregon Georgia Minnesota Virginia Louisiana North Carolina Tennessee Kansas Iowa Arkansas Wisconsin South Carolina Kentucky District of Columbia Delaware California New Hampshire West Virginia Mississippi Maryland Hawaii Indiana Alabama Missouri Vermont Maine Pennsylvania Massachusetts New York Illinois Ohio Michigan New Jersey Rhode Island Connecticut

98.5% 96.0% 95.4% 77.1% 76.5% 68.7% 65.7% 62.6% 59.3% 56.8% 54.7% 47.9% 46.2% 44.2% 41.6% 41.2% 40.5% 38.9% 34.6% 31.8% 31.0% 29.3% 29.3% 29.3% 28.9% 28.8% 26.4% 26.2% 25.7% 25.4% 25.2% 25.1% 25.0% 24.2% 20.4% 20.3% 20.2% 19.0% 18.3% 16.9% 15.3% 13.8% 13.0% 12.6% 11.2% 10.2% 10.0% 7.4% 6.6% 4.9% –0.2%

Yes Yes Yes Yes Yes Yes No No No Yes Yes Yes No No Yes Yes No Yes No Yes Yes Yes Yes Yes Yes Yes No Yes No — No No No No Yes No No Yes Yes No No No No No No No No Yes No No No

RIGHT-TO-WORK STATES

are outperforming Forced Unionization states by a significant margin, holding nine of the top 12 positions and 20 of the top 28. All but four of the veteran Right-to-Work states occupy the top 25 job-producing spots over the last 24 years.

Two of the four lowest-performing RTW states, Indiana and Michigan, only became Right-toWork in 2012.

Notes: Some state top income tax rates have been rounded. Employment figures are for the private sector. Tennessee and New Hampshire tax dividends but not income. Sources: U.S. Department of Labor, Bureau of Labor Statistics, and Tax Foundation.

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QUOTE UNQUOTE “Nothing is more certain than that a general profligacy and corruption of manners make a people ripe for destruction. A good form of government may hold the rotten materials together for some time, but beyond a certain pitch, even the best constitution will be ineffectual, and slavery must ensue.”

“He’s the greatest enemy to press freedom in a generation.”

New York Times reporter James Risen, on President Barack Obama

“When it comes to lowering taxes, Republican support has been mostly rhetorical. In fact, recent legislative debates have focused on increasing taxes, not cutting them. ... After four years of complete Republican control of state government, Oklahoma’s income tax hasn’t been cut at all. A bill passed this year may reduce the top personal income tax rate by a quarter of a percentage point in the future. Time will tell.”

The Oklahoman, in a July 24 editorial

John Witherspoon, 1776

“3,200” The number of Obamacare enrollees in Oklahoma who have questionable citizenship issues, according to the Centers for Medicare and Medicaid Services

“You teachers in your unions, you need to say, ‘These bad teachers are making us look bad. We don’t want it!’ ... And it has nothing to do with being a liberal or a Democrat. It has to do with being an American.”

Whoopi Goldberg, co-host of The View