Frequently Asked Questions
How did the state finally pass in late March the largest school funding plan since HB 1017 and the largest teacher pay raise in state history?
It took the effort of districts and teachers and parents statewide, but BARTLESVILLE led the effort all the way.
Our district initiated discussion of a suspension, buoyed by record public comment and support at multiple school board meetings, a spontaneous student protest, and a receptive public.
Bartlesville worked to get school districts across the state to agree on a statewide school suspension unless the legislature finally acted to address teacher raises and inadequate school funding. The OEA finally came on board once a walkout was inevitable, and state employees voted to join in a rally on April 2 as they could.
When OEA failed to propose a revenue plan, Bartlesville then led the way to a resolution for FY19 by designing and promoting its original Time Is Now plan for FY19. One of its House Representatives, Earl Sears, built off that proposal and worked in the House to convince House members and its leadership to pursue a bipartisan compromise. What eventually passed the House evolved directly from Bartlesville's Time Is Now plan.
A plan passed the House on March 26, 2018 and the Senate on March 29. It was the first time since SQ 640 was enacted in 1992 that the legislature passed a tax increase with the required 75% super-majority vote in both chambers.
But now teachers across the state are demanding that the legislature fully fund the measures, including the state employee pay raise, and are trying to secure more operational funding for schools.
In April 1990, schools across the state shut down for four to five days and tens of thousands of teachers descended on the State Capitol. The SUSTAINED walkout forced the state senate to finally pass the House Bill 1017 education reform law. The threat of a similar prolonged walkout in 2018 finally spurred the legislature to forge and pass a bipartisan compromise to increase school funding.
Why was there still a walkout beginning on April 2?
On April 2, 2018 and beyond, districts across the state closed and teachers again rallied at the State Capitol to not only express their thanks to supportive legislators but to make it clear more operational funding is needed, and that the legislature should raise sufficient new revenues to fully fund the plan, including the state employee pay raises.
How is what passed different from the proposals from the OEA?
The Oklahoma Education Association's Together We're Stronger plan was an ambitious three-year plan. Notice that the actual revenues and expenditures shown below are from the Tax Commission and legislative leaders and differ from the original estimates used by the OEA for its proposal.
FISCAL YEAR 2019:
- OEA asked for $366 million for $6,000 teacher pay raises; the Governor signed $354 million for pay raises averaging $6,100.
- OEA asked for $65 million for $2,500 pay raises for school support employees; the legislature sent to the Governor $52 million for $1,250 pay raises.
- OEA asked for $75 million in school formula funding; the legislature approved $50 million, designating $33 million of that for textbooks.
- OEA failed to address the increased Flexible Benefit Allowance cost, but the legislature approved $25 million to cover that expense.
- OEA asked for $71 million for a state worker pay raise; the legislature approved $64 million for that purpose.
- OEA asked for $235 million in ill-defined Health Care Funding; this was not directly addressed by the legislature for FY19, but it did pass diverting $144 million in FY20 to a new Health Care Enhancement Fund.
FISCAL YEARS 2020 and 2021:
- OEA asked for $2,000 teacher pay raises for both fiscal years; this was not addressed.
- OEA asked for $1,250 support pay raises for both fiscal years; this was not addressed.
- OEA asked for $125 million more in school formula funding; this was not addressed.
- OEA asked for $71 million each year for more state worker raises and $21 million more for Health Care in FY20; these were not addressed.
The original OEA plan
The OEA plan for a $10,000 raise over three years would make teacher salaries even more competitive. Why not seek even more revenue for a $10,000 raise in FY19?
The $6,100 teacher raise in FY19 will put Oklahoma above the regional average and only behind Texas. That would be sufficient to slow, but certainly not stop, the drain of teachers to Texas. But there is simply no politically feasible way to raise the average teacher salary in Oklahoma high enough to compete with the very high salaries in large metropolitan areas in neighboring states. Other states have a less flat salary structure across districts, often due to a far greater reliance on property taxes than in Oklahoma, so their large metros can afford far higher salaries than their rural neighbors. Oklahoma's more equitable school funding across districts is a handicap in that regard.
A $10,000 raise in FY19 would raise Oklahoma to first in the region, but is simply not politically feasible with the 75% super-majority requirement for new taxes in Oklahoma.
What happened with the Gross Production Tax?
Many members of the two parties had staked out painfully similar positions on the gross production tax (GPT) on oil wells. While many were willing to step up from 2% to 4% for the first 36 months of a well, others preferred returning to the historic 7% but accepted a rise to 5%. The reality is that this was much more about politics than money. The difference in revenue between 4% and 5% GPT on horizontal wells is less than the rounding error in the pre-drilling projections of a new well.
Historically the rate was 7%, and horizontal wells will now be taxed at 5% for the first 36 months, up from 2%, and then return to the historic rate of 7% after a well's first 36 months. However, modern horizontal wells have most of their production in their initial years.
The graph below shows how the state's combined ad valorem and severance taxes on oil until this increase was imposed was below most large oil-producing states, which belied claims that oil companies would not drill here if the GPT were increased substantially.
The gross production tax on horizontally-drilled wells will now be 5% for the first 36 months and then rise to the historic 7% rate.
What about the lottery and gaming?
A common concern of citizens is why lottery and gaming monies haven't solved the school funding problems. The reality is that previous income tax and gross production tax cuts cost the schools many times more than what the lottery and tribal gaming brought to the schools.
In 2016, the reduction in school revenues due to previous reductions in the top income tax rate was more than twice as large as the school revenues provided by the lottery and tribal gaming combined.
In 2014, cutting the gross production tax on horizontal drilling from 7% to 2% also cost the schools more than three times what the lottery can generate.
While the lottery and tribal gaming still help the state's public schools, they are a small part of total school revenue. In 2016, together they amounted to $189 million out of the $2.44 billion in state appropriations for common education. That's less than 8% of state revenue for schools.
The Time is NOW plan recognizes that ball-and-dice gaming in Indian casino games of craps and roulette will bring in added revenue while encouraging the tribes to reform their existing state compacts for the benefit of all Oklahomans.
What about administrative vs. instructional costs?
You will often hear talk that schools just need to put more of their existing money into the classroom and consolidate districts. Both ideas are easy to say, but not at all easy to actually do, and neither would save enough money to make a sizable impact on the funding crisis.
Even if Oklahoma magically could eliminate ALL administrative costs and put ALL of it into instruction, our national rank in instructional spending would not shift by even one place!
Cutting "support services" in favor of instruction sounds great until you realize that means cutting the remaining school counselors, nurses, speech pathologists, staff training, computer centers, busing, building maintenance, and the like. A decade of funding cuts means Oklahoma schools have already cut those costs to the bone. There are no more efficiencies to be found in those categories.
But shouldn't we consolidate districts?
Sure, but there aren't enough votes to force consolidation, plus that won't solve the problem.
There certainly is room for consolidation, especially in eastern Oklahoma. But we are still a rural state, and many lawmakers say consolidation should remain a local decision, not a state mandate, because closing a school can cripple a small community. The district may be a key employer and the town’s social and athletic center. The reality is that there are not enough votes in the legislature to force additional consolidation at this time.
The state has certainly done its best over the past decade to starve school districts into consolidating. The spreadsheet shows how 34 districts have been annexed or consolidated since 2008. But the chronic underfunding of schools has harmed the education of all of the state's schoolchildren.
These are facts we must face:
- While we're 8th in the nation in the number of districts, we're also 4th in the nation in the number of farms. More than one-third of Oklahomans live in rural areas with less than 2,500 residents.
- The only politically viable way to get more districts to consolidate is to pay them to do so, as House Bill 1017 did back in 1990. But we must improve overall school funding before we further incentivize voluntary consolidations.
State administrators already supervise more pupils than in most neighboring states.
The lower chart shows how Oklahoma administrators already supervise more pupils than administrators do in Texas, New Mexico, Colorado, Kansas, or Arkansas. (Sorry, 2012-2013 was the most recent data we could find, but with all the cuts since then it is safe to presume the pupils per administrator has only risen since then in our state.)
And remember, even if we magically consolidated all districts to have NO administrators, our state ranking on instructional spending would not budge. There just isn't enough savings here to make much difference.
Is a suspension of schools legal?
Yes! State law only forbids teachers from striking against local boards of education. The April 1990 school shutdowns were legal, because students still received all of the state-mandated instructional time. The same would be true for a walkout this April.
The Time is NOW for the state to act, or it will face a cooperative suspension of schools where teachers, parents, administrators, and school board members across the state will band together to suspend schools and picket at the state capitol and in their hometowns until the legislature finally passes revenue measures to address the school funding and teacher salary crisis.