perspective - march 2016

When it comes tomeasuring the trueprogress of our society,GDP leaves a lotto be desired

In Case You Missed It

PERSPECTIVEBlake Arnold • Oklahoma City

Glenn Ashmore • Oklahoma City

Robert D. Avery • Pawhuska

Lee J. Baxter • Lawton

Steve W. Beebe • Duncan

John A. Brock • Tulsa

David R. Brown, M.D. • Oklahoma City

David Burrage • Atoka

Michael Carnuccio • Yukon

Paul A. Cox • Oklahoma City

William Flanagan • Claremore

Josephine Freede • Oklahoma City

Ann Felton Gilliland • Oklahoma City

John T. Hanes • Oklahoma City

John A. Henry III • Oklahoma City

Henry F. Kane • Bartlesville

Robert Kane • Tulsa

Gene Love • Lawton

Tom H. McCasland III • Duncan

David McLaughlin • Enid

Lew Meibergen • Enid

Ronald L. Mercer • Bethany

Lloyd Noble II • Tulsa

Mike O’Neal • Edmond

Larry Parman • Oklahoma City

Bill Price • Oklahoma City

Patrick T. Rooney • Oklahoma City

Melissa Sandefer • Norman

Thomas Schroedter • Tulsa

Greg Slavonic • Oklahoma City

Charles M. Sublett • Tulsa

Robert Sullivan • Tulsa

Lew Ward • Enid

William E. Warnock, Jr. • Tulsa

Dana Weber • Tulsa

Daryl Woodard • Tulsa

Daniel J. Zaloudek • Tulsa

OCPA TrusteesPerspective 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.

OCPA ResearchersSteven J. Anderson, MBA, CPAResearch Fellow

Tina DzurisinResearch Associate

Trent England, J.D.Dr. David and Ann Brown Distinguished Fellow for the Advancement of Liberty

Adam Luck, MPPResearch Fellow

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

U.S. Senator James Lankford and OCPA’s Jonathan Small say it’s time for political leaders at all levels to highlight wasteful government spending.

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The Sand Springs City Council has approved a resolution opposing the Boren tax increase.

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Fully 39 percent of the incoming freshmen at Oklahoma colleges and universities in 2013 were required to pass at least one remedial course, Oklahoma Watch reports. This is the highest rate in the nation.

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OCPA distinguished fellow Andrew Spiropoulos says conservative policies help the most vulnerable in society.

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Tulsa Public Schools personnel do a lot of traveling on the taxpayer dime.

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OEA’s total membership for 2013-14 is 21,291—a decline of 1,016 from the previous year.

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As tax-cut critics continue to cry foul, OCPA’s Trent England reminds us that even in high-tax states there are always those for whom taxes are never high enough.

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A former University of Oklahoma professor has some sensible suggestions for our “broken education system.”

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The state’s largest newspaper says OCPA’s state budget recommendations “deserve serious consideration.”

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Brandon Dutcher, Editor

Alex Jones , Art Director

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The recent media coverage of the state’s budget condition has resulted in a plethora of ideas on how to deal with the situation. Some of the ideas have merit, while others (such as raising taxes) are simply counterproductive.

There are plenty of sensible solutions which don’t involve extracting more money from our fellow citizens.

I have been in a position to view state budgeting processes in multiple states, including Oklahoma. When I was appointed by Governor Sam Brownback to serve as budget director in Kansas, I inherited a staff from the Gov. Kathleen Sebelius era that was significantly larger than what I needed. Rather than restructuring the office and eliminating positions to achieve savings, I asked the employees to help me.

My prior experience in the private sector had taught me that those who perform tasks often can pinpoint the areas where savings can be found. If incentivized to share those ideas, these employees will drive change that is effective and is welcomed by the employees themselves.

My pitch to the employees was basically this: Show me ways we can reform our processes while improving our service delivery. Every time an employee leaves, we will share 50 percent of that person’s salary as pay raises for those taking on the tasks of the departing employee.

You’ll notice I said 50 percent of the departing employee’s “salary,” not “compensation” (which includes benefits paid by the state). The carrying cost of the benefit load was approximately 34 percent of salary for the employee group I oversaw in the Division of Budget (DoB).

Given that these were all employees with at least one master’s degree, the average salary of the line workers was more than $60,000.

With a salary of $60,000 the cost of benefits is $20,400. So when an employee departed, I was able to give $30,000 to the staff—while saving the taxpayers approximately $50,000.

Over the course of the first 18 months, raises for the remaining employees ranged from $7,700 to $10,000 per employee—all while the service level in the department increased.

For example, we began a real-time feed of information to the governor and his staff via a secure messaging system using iPads to send updates even as committee meetings were taking place. Those same i-Pads allowed the employees to be tied into the DoB database and email system, permitting them to do work during slow times in committee meetings (previously they were doing this work every evening after committee meetings closed). This effectively saved an average of 1.25 hours per employee workday every day over a 90-day session.

In other words, for every employee in DoB we saved 112.5 hours per session, which, together with other process changes, allowed me to not hire one single new employee—even as staff was reduced by roughly 25 percent as employees took a job with another agency or reached retirement.

These savings were compounded by DoB’s rent savings, which totaled more than $22,000 over the same period due to reduced space needs.

In addition, there were computer software/hardware and other office overhead costs that were eliminated

through the workforce reductions.To its credit, Oklahoma already has

a rewards program for state employees who find efficiencies—but the rewards are only one-time rewards. I encourage Oklahoma’s political leaders and agency heads to consider this approach I used at DoB. Policymakers would be wise to enact a statute specifying there must be a permanent reduction in FTEs and a net savings from the drawdown.

My experience tracks perfectly with a wise observation made by Mitch Daniels—the former director of the federal Office of Management and Budget, former governor of Indiana, and current president of Purdue University—on rooting out government waste.

“There are only so many places,” he says, “where you can take a cleaver and take a great big piece of fat out. The issue—and I really see it in higher ed—is the fat is marbled throughout the animal. And so you have to be willing to look everywhere. And you have to try to get others in the act, not do this top-down.”

Steve Anderson (MBA, University of Central Oklahoma) is an OCPA research fellow. A Certified Public Accountant with more than 30 years of experience in private practice, he is currently a partner at Anderson, Reichert & Anderson LLC. Anderson spent two years as a budget analyst in the Oklahoma Office of State Finance, and most recently served as budget director for the State of Kansas. At one time he held 17 state teaching certifications, ranging from mathematics to physics to business. This article was originally published in the Tulsa World.

By Steve Anderson

State Employees Can Help Solve Oklahoma’s Budget Crunch

4 PERSPECTIVE • March 2016

There is a holy number in America today. People worship this number on a daily basis. It has the power to cause the stock market to roar or to come tumbling down. This number even has the power to determine the fate of presidents.

And yet, it is also profoundly anti-family.

What is this number? We call it Gross Domestic Product, or GDP.

Early in my career I worked within the bowels of the U.S. Department of Commerce, constructing a very small piece of GDP. Since that time, I have learned that GDP is misleading at best and downright wrong at worst.

While economists pride themselves on being the most objective researchers in the soft sciences, the fact is, there is no such thing as objective data.

Imagine that a drug company just created a miracle drug that cures one of the most insidious cancers in existence. Sales of this very expensive drug would of course soar, directly adding hundreds of billions of dollars to the economy.

However, there is one important caveat. For every 100 people who take the drug, half will die within 24 hours of taking it. Incredibly, the drug’s morbid dual personality makes no difference to GDP. GDP goes up from the sale of this drug whether it ends up curing a person of cancer or immediately killing that person.

Do the bean counters at the Department of Commerce discount the value of the drug sold based on its high mortality rate? Of course not. That would be a value judgment. Yet, GDP already makes de facto value judgements on a number of economic activities; their very inclusion

in GDP amounts to giving them a thumbs-up.

Adam Smith’s most popular work is considered by most to be The Wealth of Nations. But he was also a moral philosopher and penned the less-well-known Theory of Moral Sentiments. In fact, he wrote five revisions to this book up until his death. The great father of economics was not obsessed with simply describing the intricacies of pin manufacturing. To the contrary, he was also committed to explaining how free markets only work when populated by moral people.

Good for GDP, But Bad for Society

Let’s consider a few economic activities whose importance to GDP has been increasing in recent years, yet which actually impose more costs than benefits to society.

Take divorce, for example. We know that there are significant economic benefits to marriage that are reversed by divorce. For instance, there are noteworthy differentials between single and married men’s incomes. Brad Wilcox, a visiting scholar at the American Enterprise Institute, finds that married men aged 28 to 30 earn almost $16,000 more than their single peers; likewise, middle-aged married men earn almost $19,000 more than do their single peers.

More broadly, the development of no-fault divorce has ultimately changed people’s time horizons. When people aren’t forced to prove why a divorce is in the best interest of the man, woman, and child, they no longer think of marriage as a lifetime commitment.

As a result, declining marriage also means having fewer children. This is great for GDP in the short run since disposable income goes up. Fewer children, however, means that we have a population where old people outnumber young people. In the United States, for example, one third of counties suffer from the phenomenon known as demographic winter. In these counties—including 27 of Oklahoma’s 77—there are more deaths than births. Demographic winter will feel like a slow-moving economic depression in these areas of the country.

Another example is legalized gambling, which is prevalent in many states. Gambling may be most representative of what Pope Francis calls “human beings as consumer goods.” It’s an industry built on deception to remove money from your wallet as quickly as possible. Studies have shown that casinos and other gambling venues are an economic black hole for the communities in which they’re located. The revenue generated from customers, who mostly reside in neighboring communities, is whisked away never to return.

Consider also the growing movement toward drug legalization. Colorado and Washington were the first states to legalize marijuana. Moving illicit drug sales into the open will certainly be a boost to GDP, which doesn’t include the black market. GDP will also get a boost from all of the increased activity among those in the drug rehab industry, bankruptcy lawyers, and counselors.

Beneficial to Society, But Not Included in GDP

At the same time, GDP fails to include

By Wendy Warcholik

What’s the Matter with GDP?When it comes to measuring the true progress of our society,

this particular metric leaves a lot to be desired.

5www.ocpathink.org

some activities whose benefits far exceed the costs to society.

Consider homeschooling, for example. An estimated 1.8 million children are homeschooled in America today and it is growing at a rapid pace. Yet, outside of buying books and pencils, GDP has missed this movement entirely. Consider that the average American school teacher earns more than $56,000 per year. A mother’s in-kind contributions to her children’s education don't make it into GDP. And that’s not including the fact that she doesn’t need to maintain an expensive school building or need expensive administrative staff to push paperwork. At the same time, the evidence suggests that homeschoolers get better results than students in traditional public schools. GDP certainly does not factor in this important qualitative difference in educational outcomes.

Or think about elder care. As America continues to age, elder care providers will be in high demand. A home care aide can cost more than $40,000 a year. A skilled home nurse can cost more than twice that amount. Not many people can afford to

stay in their home with such large costs.As a result, we are already seeing a

boom in children caring for their older parents at home. Often, a child will drop out of the labor force entirely in order to do this. This means that GDP is hit twice—first the reduction in paid wages to the person providing elder care, and second through the replacement of hired help with the in-kind provision of elder care.

Finally, religion. Religion is the institution we often look to when we want to move someone from welfare to work, from drugs to sobriety, from prison to civil society. Faith is often the path that these people travel. Bob Woodson, founder and president of the Center for Neighborhood Enterprise, does a lot of work with felons and drug addicts. He says that although he can’t explain it, faith is always the transformative element for people in despair.

Yet there is no room for “spiritual transformation” in GDP accounting—even though people clearly are more economically productive after such transformations. GDP measures church

donations and the salaries of preachers and priests. However, simply accounting for these two items is just the tip of the iceberg when it comes to the positive impact and enrichment that religion has on the lives of Americans.

Overall, GDP leaves much to be desired when measuring the true progress of our society. We need new metrics that are based on the core institution that is the glue of society—the family. That is the goal of the Family Prosperity Index, which the American Conservative Union will be releasing this month at its annual Conservative Political Action Conference (CPAC).

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.

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Economists tell us the difficult work of childrearing provides a benefit to society. “Everyone benefits from having a next generation in place to sustain the society and keep its institutions going,” writes Jennifer Roback Morse. “In modern developed countries, the family saves the state money by taking care of its own dependent young, rather than foisting that responsibility onto the taxpayers.”

Our political leaders should appreciate these parents, including those mothers who educate their own children. These teachers build human capital without making demands on budget-conscious appropriators already besieged with requests from competing interests.

After all, policymakers don’t have to provide my children’s teacher a salary, health and retirement benefits, and so on. Indeed, her family’s tax dollars help pay the salaries of public school teachers. She pays for school breakfasts and lunches, too—both for

our own children and for the children of our fellow citizens. She buys her own school supplies (without the tax deduction, alas, that other teachers enjoy) and also buys school supplies for others.

When it’s all said and done, her hard work of educating our children will have saved our political leaders well over half a million dollars. That’s money they can use to build roads and bridges, incarcerate criminals, or pay schoolteachers.

Imagine how much money politicians would have to come up with—not only current expenditures but also construction costs—if the nation’s 1.77 million homeschooled students showed up at their local public school wanting to enroll.

— OCPA senior vice president Brandon Dutcher,

writing last year in the Tulsa World. To read the entire article, go to ocpa.us/home_economics

Home Economics

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he triangle is structurally extremely strong. Most roofs are constructed of triangular trusses. They provide for great strength with an economy of resources. Depending on the material used to construct them, trusses

can be nearly indestructible. An iron or steel truss, launched into the air by a tornado, would be a very destructive projectile, doing far more damage to the structures it impacts than it would itself suffer.

This describes well the political interests that so successfully resist change in public education—the iron triangle (a characterization not original with me).

The term is generally used to define the close, supportive relationships among government agencies, legislative bodies, and special interests. There are lots of iron triangles: renewable energy and the environmental lobby; urban renewal and the developers who partner with government to carry it out; the military-industrial complex; and the biotechnology, health care, hospital triangle, to name a few. None are so resilient and sometimes perplexingly powerful as the education iron triangle.

I have lived and worked in public policy in three states: Texas, Arizona, and Oklahoma. I have studied and written on a variety of topics including health care, transportation, tax policy, electricity utilities, and education. None of the others rival public education in their ability to stand immune to scrutiny and real reform. Even when reform in public education manages to take hold, the education triangle gradually strangles, absorbs, and eliminates it.

Take accountability through testing as an example. Texas was one of the early pioneers, hearkening all the way back to the late 1980s. When it was suggested that, perhaps, students could take standardized tests and school personnel should be held accountable for results, there immediately ensued a circling of the wagons. Fairness immediately became the watchword of the day. But it was not fairness for students. It was fairness for teachers, administrators, and school districts.

Testing became high-stakes—determining whether students pass, graduate, and even were eligible to attend state colleges—not because reformers insisted

upon it, but because the triangle did. Students, after all, immediately became the enemy where testing was concerned. They had to be incentivized to do their best on the test, complete with lifelong consequences for failure. This feature of testing contributed to the end that the triangle really had in mind all along, though, which was testing’s watering-down or elimination. It ultimately enraged parents.

Another feature of testing that irks parents is the sheer volume of tests. In Texas, the accountability exams tested “basic skills” in math and language. Subject-specific tests, which dramatically increase the time spent on testing, were initially tried and then rejected, only to rise again. Why? Well, elements within the triangle became aware that the subject areas they cared about were neglected if they were not tested. Testing became part of the competition within the triangle for resources. And parents became all the more enraged at excessive testing.

The triangle also managed to use testing to stir up culture wars, perhaps by accident, but again in the name of fairness. The triangle insisted on a state-specific test. Off-the-shelf achievement tests would not suffice for accountability, even though schools had been using them for decades to test the progress of their students. The state test would be “criterion-referenced,” meaning that it would align to curriculum standards determined by the state—curriculum standards that then had to reach a level of specificity never before promulgated by the state. It created a whole new battleground outside of textbook adoption to determine what students were supposed to learn.

So why this history lesson? And, who makes up this triangle in education? Well, first, the history of testing and education accountability in Texas has played out similarly in state after state, including Arizona and Oklahoma. A-through-F grading of schools has only been the latest casualty. Second, the testing/accountability wars, which played out on an even bigger stage with No Child Left Behind, involved parents and teachers as foot soldiers, but parents and teachers, with few exceptions, are not actually part of the triangle. They are used and manipulated by it.


Public Education's 'Iron Triangle' Resists Reform


Education’s iron triangle is made up of those who most benefit from it financially and politically. The special-interests side of the triangle, the strongest side, includes a veritable army of lobbyists. Every state has its association of school administrators with its ubiquitous lobbyists, apart from the administrators they represent. Sometimes there is more than one such association, with lines divided on school district size or geography. There is an association of school boards, apart from school board members themselves, that employs lobbyists and specialists who know far more about school policy than almost any school board member.

There are teacher unions and associations, apart from teachers themselves, and their lobbyists who are far more plugged into policymaking than teachers can ever be. Then there are textbook companies, testing companies, consultants, school building contractors, school bus manufacturers, and now electronic media companies, all of whom employ lobbyists.

The legislative side of the triangle includes state legislators, Congress, statewide elected leaders, national politicians, school board members, and often city-elected officials. These are individuals who often owe positions to the special interests who helped fund their elections.

The bureaucratic side of the triangle includes administrators, assistants, and education department bureaucracies. These last two sides of the triangle see their interests as intimately tied to the existence of public education in its current form and are highly resistant to change. But by far, the most powerful side of the triangle is that of the special interests.

The main weapon of the special interests, in league with school administrators, is information and disinformation. School board members mostly know what their

superintendents tell them. Teachers mostly know what administrators tell them. Legislators mostly know what the state’s education department bureaucrats tell them, along with many other voices whose stories are often contradictory. The result is a mass of people who know much less than they think they do, or, what they think they know is actually wrong. And those outside the triangle who actually figure things out are ignored, or are discredited either with the truth over a minor mistake or with outright lies, like the lie that testing and its problems were all the fault of legislators and No Child Left Behind.

And in the middle of the triangle, surrounded and under siege, are parents, students, teachers, and taxpayers. They far outnumber those that make up the triangle, but they have no power. They are too busy to gain the knowledge they would need to take it. They stand convinced that the only way to fund schools is with complex formulas only a few understand, that school districts form the bulwark of their communities and professions, that consolidation of small school districts would save mounds of money, that their schools are excellent while everyone else’s are terrible, and that they have some control over their schools when they vote in school board elections.

And no myth is greater than that schools are for the children.

Byron Schlomach (Ph.D. in economics, Texas A&M University) is state policy director for the 1889 Institute, an independent research organization. He is a scholar in residence at the Spears School of Business at Oklahoma State University. He previously served as director of the Center for Economic Prosperity at the Goldwater Institute, and prior to that was chief economist for the Texas Public Policy Foundation.

The Education Iron Triangle

Teacher UnionsAdministrators Associations

and School Board AssociationsEducation Contractors and Vendors

U.S. Dept. of EducationState Dept. of Education

School Superintendents andOther District Administrators

CongressState Lawmakers

School Board MembersOther Elected Officials

Trapped:ChildrenParentsTeachersTaxpayers

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Every budget crunch brings another call for consolidation of Oklahoma school districts and the pushback from rural residents and their legislators. We can expect more of the same in this year’s legislative session.

It is difficult for those in urban areas, especially when they look at the high per-pupil expenditures necessary to keep some rural schools open, to understand the ire that is raised in rural communities by the “consolidation” movement. However, there is much more to this than meets the casual observer’s eye. The solution will not be found in dividing into rural-versus-urban camps, which typically happens when the “c” word is mentioned at the state capitol.

Rural residents realize that consolidation often means not just closing their local school but driving the final nail in the coffin of their town’s existence. They lose control of their children’s education when they lose their school boards upon consolidation. Adding insult to injury, they then put their children on bus rides that in some cases can result in hours spent en route to and from the new school.

I have seen the effects of consolidation in my home state of Kansas when the “one school district per county” movement gained momentum in the 1960s. Since those closures the towns which lost their schools largely disappeared. Yet there was no sign that the financial situation improved for the consolidated school that remained to justify the damage done to those communities or the long bus rides for those children living at the edges of the county.

Consolidations are sold to the voting public generally with two major points: (1) cost savings from economies of scale, and (2) better educational opportunities in larger school settings.

Both of these are flawed assumptions on examination. The result of the Kansas consolidation was that there was not a cost savings as transportation costs of gathering students from such a wide area ate up the economies of scale that were gained by closing the smaller schools. The larger-school-equals-better-education argument is also unpersuasive. Go to SchoolDigger.com, for example, and look at the National Assessment of Educational Progress (NAEP) scores for Oklahoma high schools. The nine top-scoring schools average less than 75 students per school, and all are rural (with one exception).

However, the reality is that there is only so much funding available in a tight budget year, and it is time to be proactive in providing solutions that can keep rural schools open. Changes in structure and how schools operate—changes that for years have been resisted by local school boards and the educational establishment—will need to be accepted. Let’s consider a few.

Shared SuperintendencyThe idea that every school needs a superintendent, principal,

and full support staff on site is a concept whose time has come and gone. A school board and community wishing to retain their local school’s autonomy should enter into a cooperative agreement consolidating administrative functions with other smaller school districts while also outsourcing functions like payroll and accounting. Addressing these non-instructional overhead expenses, if properly done, should have no effect on student achievement while reducing costs for every school in the contract.

There is sufficient evidence in states that already have embraced the concept. In Nebraska, for example, Caroline B.

By Steve Anderson

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Winchester of the University of Nebraska found “decreased administrative per pupil cost and decreased per pupil cost” after the first year of sharing superintendents. She also found that Nebraska’s system of shared superintendency led to districts that “shared staff, both certified and non-certified, equipment, and worked together on curriculum and assessments.”

Virtual LearningSharing staff through virtual classrooms represents another

opportunity to minimize expenditures while maximizing both the quality of instruction and the number of course offerings. There is a large array of different entities offering online courses, including Stanford University. In addition, Silicon Valley High School, recently certified by the University of California system, only charges between $50 and $100 per course. These online courses allow a small school to provide every course that a large urban school might have—and then some. At most, these online courses require a proctor to monitor the classroom environment, all while providing access to top-quality teachers regardless of the location of the district. The proctor need not be a certified teacher but simply can be a responsible adult engaged on a part-time basis, thus avoiding the health insurance and retirement costs of a certified teacher. While it does require computer and Internet access, the savings in teacher salaries and benefits and direct overhead costs should be considerable while allowing a small school to broaden its course offerings.

Coordinated Purchasing AgreementsThere is one more area of large potential savings, and this

approach too is already being tried in other states. In New Jersey, districts shared “pupil transportation, library resources, food services, curriculum development, teacher training, child study teams, special education, snow and trash removal, custodial services, and purchasing.” Possibly a more functional option for rural Oklahoma may be the Wisconsin model of the Cooperative Educational Service Agency (CESA), which operates a statewide nonprofit cooperative purchasing service governed by statute. CESA nationally bids contracts for the state of Wisconsin in addition to dozens of other statewide agreements. CESA primarily serves K-12, tech schools, the University of Wisconsin system, libraries, and other educational entities. The economies of scale that larger districts have had as inherent cost savings can be acquired by small rural schools through these sorts of coordinated buying services without losing their autonomy.

In sum, there is no reason that talk of consolidation of districts needs to be part of the discussion in the next legislative session when options like these exist.

Steve Anderson (MBA, University of Central Oklahoma) is an OCPA research fellow. A Certified Public Accountant with more than 30 years of experience in private practice, he is currently a partner at Anderson, Reichert & Anderson LLC. Anderson spent two years as a budget analyst in the Oklahoma Office of State Finance, and most recently served as budget director for the State of Kansas. At one time he held 17 state teaching certifications, ranging from mathematics to physics to business.

Test Scores Aren’t EverythingTest scores are not strong indicators of school quality.

Even when they’re value-added measures, they are surprisingly weakly connected to successful outcomes in later life. After all, test scores only partially capture the many things that schools and teachers do every day, such as teach other (untested) material, impart values, and so on.

Sound like a member of the education establishment talking? It’s actually Dr. Jay Greene in a recent presentation at OCPA entitled “The Dangers of a High-Regulation Approach to School Choice.”

To learn more, visit ocpa.us/Jay-Greene.—Editor

It shouldn't surprise us that small, rural districts lack the ability to offer higher-level coursework; even urban and suburban districts struggle to find great advanced placement math and science teachers. What's more, a school with a graduating class of 25 students might only have one or two who want to take advanced-placement classes. A district can hardly justify hiring a teacher to teach only two students. The same is true, by the way, for the kinds of career and technical education that might get students good jobs straight out of high school.

A frequent response to these problems is to simply tell districts to consolidate. More students mean better economies of scale and an increased likelihood of having a critical mass of students for advanced courses. But consolidating districts and closing schools risks further rending the fabric of these already hard-hit communities. A better solution would be to try and get students access to the coursework that they need while preserving the pro-social elements of small-town schools, like Friday night football, the school play, and the homecoming parade.

Enter course access. Course-access programs provide students with flexibility in the funding that the state sends to their school. For two, three, or more classes, students are able to choose from a set of courses approved by the state that are offered online, at a local community college or nearby school, or by a trade school or apprenticeship program. The cost to the state is minimal; the only new expense is the vetting of courses and the tracking and payment of providers. The actual cost of the courses is covered by a proportion of the funds the state already sends to the school. Providers are held accountable as well, getting a portion of the money up front and the rest when students successfully complete the class.

—Michael McShane, director of education policy at the Show-Me Institute, writing at usnews.com. To read the

entire article, go to ocpa.us/rural-schools.

School Choice for Rural Students

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The most promising blueprint for the [legislative] session isn’t hard to discern. The principal goal must be to sufficiently reduce spending and tax benefits to maintain current funding for the core functions of government. But, when possible, these spending cuts shouldn’t be the usual indiscriminate across-the-board cuts—we need to make structural reforms and larger cuts to agencies, like higher education, that massively increased spending in the last decade. I would also recommend finding enough money to fund pay raises for entry-level, specialty, and high-performing teachers. …

If we leave the current constitutional structure in place, when revenues again explode, the Legislature will face unbearable pressure to either restore eliminated programs and tax benefits or create new ones. The only way to preserve any reforms made this year is to amend the constitution to both reduce the permitted annual spending increase and significantly increase, or eliminate the cap on the size of the Rainy Day Fund.

I would recommend setting the spending cap at the annual rate of increase of state personal income—if our people get a raise, government can have one too. If we increase or lift the cap on the Rainy Day Fund, the combination of the new spending limit and our historical revenue gushers in good times should ensure that we avoid dramatic and involuntary spending reductions.

— Andrew Spiropoulos, OCPA’s Milton Friedman Distinguished Fellow, writing January 7 in The Journal Record. To read the entire article, go to ocpa.us/journal-record.

President Obama was supposed to unite. In 2008 University of Oklahoma President David Boren endorsed Obama, saying: “Our most urgent task is to end the divisions in our country, to stop the political bickering, and to unite our talents and efforts. Americans of all persuasions are pleading with our political leaders to bring us together. I believe Senator Obama is sincerely committed to that effort. He has made a nonpartisan approach to all issues a top priority.”

Ironically, the president has increased division by geography, race, ideology, religion, and culture. He will be remembered as one of the most divisive presidents, regularly resorting to the politics of envy.

The president failed to win majority support in all 77 counties in Oklahoma. Still some are using the president’s playbook here, employing the politics of envy regarding bipartisan personal income tax cuts and the current economic downturn.

Tax cuts have just now reduced the state tax burden to the national average relative to the state’s economy. But opponents of tax cuts want to stir up envy among those who pay little or no income tax against other taxpayers. These cynics want us to turn on our family, friends, teachers, military personnel, church members, community volunteers, job creators, and others and to believe government would spend their money better.

— OCPA president Jonathan Small, writing January 15 in The Journal Record. To read the entire article, go to ocpa.us/politics-of-envy

We know exactly what they would do with another billion dollars a year. How? Over the last 20 years, we’ve delivered over a billion dollars more in appropriations. From 1995 to 2015, education appropriations rose from $1.42 billion to $2.45 billion—a 70 percent increase.

What will happen? The bureaucrats will increase salaries, technology spending, and staffing, but student achievement won’t improve at all.

Our state is repeatedly singled out for its poor student achievement—and it isn’t about the money. Other states spend less money and get better results. Utah and Idaho, for example, spend significantly less per student than we do, and their students outperform ours on every important measure, including fourth- and eighth-grade math and reading proficiency, international math and reading comparisons, and the percentage of students passing advanced placement exams in science and math subjects.

But we do rank highly in some areas. We have more school districts than all but 11 states, nearly all of which are far larger than Oklahoma. We rank in the top 10 in district administrative spending and the top 20 in school administrative spending. We shouldn’t be surprised that at least half of our over 500 superintendents make more than $100,000 in total compensation, and seven pocket more than $200,000 a year.

— Andrew Spiropoulos, writing January 14 in

The Journal Record. To read the entire article, go to ocpa.us/another-billion

How to Avoid Involuntary Spending Reductions

Resist the Politics of Envy Another Billion Dollars?


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Greg Kaza, executive director of the Arkansas Policy Foundation, is pictured here at a recent presentation at OCPA titled “Penny Sales Tax for Education? Lessons from Hillary Clinton.” Mr. Kaza, an economist and a former state lawmaker, says the Clinton experience should serve as a cautionary tale for Oklahomans.

Former U.S. Senator (and former OCPA trustee) Tom Coburn speaks at OCPA on January 22.

OCPA research fellow Adam Luck speaks at a press conference hosted by Oklahomans for Criminal Justice Reform, a coalition of community leaders and experts which favors “reforming sentences for certain low-level off enses and applying the cost savings to evidence-based programs to treat drug addiction and mental health conditions, and provide access to education and job training.” OCPA’s Estela Hernandez (third from left) and Jonathan Small (far right) are also pictured.

OCPA president Jonathan Small speaks at the Oklahomans for Criminal Justice Reform press conference.

@OCPAthink

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“The problems that plague Oklahoma public education today are not due to underfunding. Since 1972, per pupil spending has almost doubled in real terms with no improvement in academic outcomes.”

Vance Fried, Riata Professor of Entrepreneurship at Oklahoma State University

“If our people get a raise, government can have one too.”OCPA distinguished fellow Andrew Spiropoulos,

recommending a state constitutional amendment to cap government spending at the annual

rate of increase of personal income

“Things outside of academia have happened to me as an African-American. But within academia, I’ve faced more intolerance as a Christian, and it’s not even close.”

University of North Texas sociology professor George Yancey, the author of 14 books on

questions of race and religious bias

“Is it unreasonable, then, that the people might expect our universities to make the same sacrifices that individuals, families, and private businesses have been making?”

Tom Lindsay, in an article at Forbes.com headlined “Explaining the College Affordability Crisis—By Blaming Its Victims”

“Oklahoma has a multitude of high-quality educational institutions including public, private, charter, virtual, career technology, tribal, religious, home, and other schools from which our students can benefit. ... Oklahoma is committed to continually improving the quality of educational opportunities and empowering parents and students to make scholastic selections that best fit their needs and academic goals.”

Gov. Mary Fallin

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perspective - march 2016

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