Education Funding in Oklahoma Are our children a priority ? Updated December 12, 2012 Megan Benn Oklahoma Policy Institute - (405)

State – approx. 60% Federal – approx. 10% Local – approx. 30% The Three Legged Stool of Common Education Funding

Education funding and enrollment

Common Education % of Total State Appropriations

FY ’13 Education Funding State aid funding has declined by $214 million since FY 2008 while public school enrollment has increased by over 24,000 students. The result has been larger class sizes, fewer course offerings, and the loss of school programs and services. Since 2008, the cost of health benefits alone has increased by $57 million, while the total programs and activities budget has increased by just $34 million Since 2008, schools in Oklahoma have also had major reforms passed and been expected to fund these reforms with less money. – A-F grading system, 3 rd Grade Reading, Teacher effectiveness

Budget Trends: FY ‘10 – FY ‘12 Budgeting Through the Crisis  FY ‘12 appropriations of $6.603 billion:  Three consecutive years of declining appropriations;  $163 million, 2.4 percent, below FY ‘11;  $522 million, 7.3 percent, below FY ’09;  $157 million, 2.3 percent below FY ’07. See FY ‘12 Budget Highlights at:

Federal Dollars - Stimulus is over now Looming Disaster with Federal cuts If Sequestration were to occur (no deal on the fiscal cliff): Oklahoma schools would lose an estimated $51.1 million for Title 1, IDEA, Head Start and others It would affect more than 100,000 students Eliminate almost 1,200 jobs

Oklahoma’s Property Tax Funds: More than 25% of school district budgets. That’s money that provides students with textbooks, supplies, smaller classrooms and more teaching time; More than 1/5 of funding for county governments that is spent on public safety and criminal justice, keeping our communities safe; 70% of funding for Oklahoma’s career technology centers that help Oklahomans develop the skills and training needed for today’s workforce.

Oklahoma’s Property Taxes are among the lowest in the nation Oklahoma ranks 48 th in the nation in Property tax collections per capita Oklahoman’s pay only 43% of what the avg. person pays in property taxes across the nation - $597 per capita while the national average is $1,388.

Property Tax Ballot Measures State Question 758 – Lowers Cap on Property tax increases from 5 to 3% annually. Impact to schools – approx. 4.2 million less in growth revenue annually

Property Tax State Questions State Question would exempt all intangible property owned by businesses from taxation Impact to schools approx. $32 million less in current revenue

Total Effect of State Questions SQ 758: Estimated impact at $3,200, –Loss of growth revenue for Common Ed SQ 766: Estimated impact at $32,000, –Loss of current revenue for Common Ed Total Impact : $35,200, Based on OK Tax Commission Estimates Released During 2012 Legislative Session

Education Funding Summary State –Decrease of $220 million over past 4 years, about $200 less per pupil Federal –If Sequestration were to occur, decrease of $51 million Local –If both state questions pass, over $35 million less to common Education

Oklahoma’s Path to Prosperity We Already Lag Behind  Oklahoma invests less than most states in our public structures.

The Challenges We Face A Fiscally Responsible Course Preserve the Income Tax  Largest funding source for state services;  Based on the share of agency appropriations funded with income tax revenues, elimination of the personal income tax would leave us unable to pay for:  Salary and benefits for 17,000 classroom teachers; AND  Health insurance coverage for 430,000 low-income children; AND  Incarceration of 9,300 inmates; AND  Tuition for 19,000 Oklahoma’s Promise students; AND  The ROADS transportation improvement plan; AND  A wide range of services and programs across state government. See: ‘What the Income Tax Pays For’ at

The Challenges We Face A Fiscally Responsible Course Preserve the Income Tax  Taxes are rarely decisive in business investment decisions. For 24 years, I’ve been conducting interviews with executives of companies that we tried to recruit to Ardmore that ended up locating elsewhere. Not once in all those years did a company that rejected Ardmore base its decisions on taxes. Ardmore Chamber of Commerce President Wes Stucky, Oct "I will tell you that state income tax had absolutely no impact in terms of the decision of merging the company and where the corporate headquarters is located.” Phillips Petroleum CEO Jim Mulva, discussing the company’s merger with Houston-based Conoco Inc. and decision to locate its new headquarters in Houston, November 2001

What Can You Do? Stay Informed and Get Involved Talk to your legislator – ask them to make Education Funding a priority this session Spread the word – take this message to your ptas, friends, families and work colleagues

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