State Education Budget Announced

Post date: May 22, 2012 3:08:45 PM

Flat education budget, but FBA and National Board bonuses are funded

The governor and legislative leaders announced on Monday, May 21 a budget deal for school year 2012-2013. As repeatedly asserted by Representative Earl Sears, the education budget will be flat for the coming school year, but thankfully does include annualization of the supplemental funding Sears spearheaded early in the session to pay for the flexible benefit allowance (FBA) for certified and classified personnel as well as bonuses for National Board (NB) Certified teachers. The budget deal thus includes a $52.4 million increase over the original 2011-2012 education budget to pay for the FBA and the NB bonuses.

Impact on local district fund balance for 2011-2012 was halved

Receipt of the supplemental funding for the FBA, as well as improving ad valorem, school land office, and gross production revenue, has meant that the district has only had to take out approximately $500,000 from the fund balance for the 2011-2012 school year, rather than the projected $1,000,000 hit when the 2011-2012 district budget was approved. That in turn makes it more likely that the school board will approve a local budget that again dips into the fund balance for 2012-2013.

Income tax deal would reduce future available funding for schools

Unfortunately, the proposed income tax deal going before the legislature this week does cut the state's top income tax rate from the current 5.25% to 4.8% for 2013 and 2014 and includes a trigger to cut the rate to 4.5% if the state experiences 5 percent growth in its revenue from personal income, sales, use, motor vehicle, and corporate taxes. Thus hundreds of millions of dollars in future revenue will NOT go to schools to pay for increased fixed costs nor to increase teacher compensation to counteract the inevitable effects of inflation. It seems rather hypocritical that the budget deal increases funding for the house, senate, and governor's offices because of increased fixed costs - schools have increasing fixed costs as well, but they are expected to somehow absorb them. It is also notable that the income tax deal actually increases income taxes for almost 1/4 of Oklahomans because it restricts exemptions for dependents above certain incomes, reduces the number of tax brackets, and does not allow one to deduct state income tax when itemizing on a federal tax return. Some legislators feel that means the measure would likely not meet the constitutional requirement that any tax increase be approved by 75% of the legislature or a vote of the people and could be challenged in court even if approved by a majority of the legislators and signed by the governor. The legislature will vote on the income tax deal sometime this week since it must adjourn by Friday, May 25.