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Oklahoma education initiative could cost $850M

Oklahoma education initiative could cost $850M

Tax hike or state agency cuts would be needed to pay for the additional funds, report shows


Published: September 23, 2009

Funding common education at levels similar to neighboring states would result in cutting the budgets of other state agencies by 20 percent or increasing by nearly 40 percent the state’s sales tax or income tax rate, according to a report prepared by the fiscal staff of the House of Representatives.

Passage of State Question 744, which voters will decide in November 2010, would result in common education receiving an additional $850 million, which would increase its share of the state budget to 49 percent, according to a report presented Tuesday to the House Appropriations and Budget Committee. Common education now receives 36 percent, or $2.4 billion, of the state’s budget.

Nearly 240,000 people last year signed the HOPE — Helping Oklahoma Public Education — initiative to put the matter on next year’s ballot. It would require the Legislature to fund education, on a per-student basis, equal to the regional average.

Oklahoma spends $7,615 per student and is ranked 46th nationally, said Joel Robison, assistant executive director and chief lobbyist for the Oklahoma Education Association. The regional average per-pupil expenditure is $9,078; Oklahoma is the lowest compared with Colorado, Kansas, Missouri, Arkansas, Texas and New Mexico.

If the measure passes next year, legislators then would have three years to allocate the additional $850 million annually to common education.

Committee Chairman Ken Miller, R-Edmond, said lawmakers would have to either look for new funds through tax increases, take existing funds from other agencies or a combination of the two to fill the hole.

"There are no other options on the table,” Miller said.

Robison said records show state revenue in the past 25 years has increased an average 5.2 percent per year. "Over the last 25 years, we’ve had hills and valleys and if that were to continue, it would bring in over $1.5 billion in a four-year period of time,” Robison said.

State Treasurer Scott Meacham told committee members that lawmakers can expect a "very tough” economic year that will continue into the 2011 fiscal year, which begins July 1.

The committee meets again Thursday, this time with state agency officials expected to discuss the effects they likely would face if SQ 744 is approved.

Rep. Leslie Osborn, who last session authored a measure that would let Oklahoma voters decide whether to ban unfunded spending increases authorized by an initiative petition, requested the study.

Osborn, R-Tuttle, has said her measure, House Joint Resolution 1014, was not aimed at the HOPE petition. Voters will be deciding that measure also in November 2010.

"The teacher’s union readily admits that this state question would cost millions of dollars, and those funds will not magically appear on trees,” Osborn said.

In order to increase revenue by $850 million, the state income tax rate would have to be increased from 5.5 percent to about 7.35 percent, according to the House fiscal report. Another option would be to raise the state’s sales tax rate from 4.5 percent to about 6.2 percent.

Cutting other agency budgets would result in across-the-board cuts of about 20 percent to raise the necessary money, according to the report. Common education receives the highest percentage of money from the state budget. The next closest percentage goes to higher education, which receives 15 percent; the Oklahoma Health Care Authority receives 10 percent of the budget.

"If this state question is approved, the people’s representatives will not be able to prioritize competing needs and will have no say on the largest single component of the state’s budget,” Miller said. "Voters will decide at the polls whom they want making funding decisions in Oklahoma — those they elected to represent them at the state Capitol or politicians from other states.”

Phillip Busey, president and chief executive officer of the Busey Group, told committee members that SQ 744 is a "wake-up call.”

"We cannot separate education from economic development any longer,” he said.

Busey said his company serves the aerospace and energy industries, which are looking for bright students to hire for their work force.

Lynn Stockley, a counselor at Booker T. Washington High School in Tulsa, told committee members educators have appealed to legislators for years for more funding.

"We need something to happen so we can have the resources to do our job,” she said.

"We have begged and begged for years.”

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