The 64 Million Dollar Question

  Meyerson Symphony Center in Dallas

My granddaughter’s dance recital is happening soon and the theme for the choreography is Lewis Carroll’s Alice in Wonderland and Through the Looking Glass.  Though I’d seen the Disney version growing up I’d never actually read the stories, until now as preparation for enjoying her recital.  So it was natural that when I read recent drivel on the Oklahoma Council of Public Affairs website my mind went to the famous characters Tweedledee and Tweedledum.

The post by OCPA President Jonathan Small (my Tweedledee) “Government’s fair share” reiterates an argument made by my fave OCPA Limited Thinker Steve Anderson (my Tweedledum) that I addressed in an earlier post Lighthouses—namely that our state would somehow be better off if only school districts, other local governments and our state government itself would pay sales taxes.  I won’t waste more space here explaining why this proposal is silly except to say that in the short run it would simply shift tax revenues around among our various governmental entities and likely add to the bureaucracy the OCPA so despises to process the additional tax payments and collections, in some cases from and to the same entity. 

This is how Alice (me in this case) might put it: 

I think it would be a silly waste for government to pay taxes to itself. Anybody can see that would raise its costs by the amount it pays in taxes to itself, which in turn collects the taxes to pay for these very costs, so the same things get done except more time is needed for the paying and collecting of taxes.

And the response from our OCPA Tweedledee:  So Anybody thinks government shouldn’t pay taxes, but it isn’t so nohow.

Supported by our OCPA Tweedledum:  Contrariwise if it was so, it might be.  And if it were so, it would be.  But as it isn’t, it ain’t. That’s logic. 

At least it’s OCPA logic.  Their “research and analysis” always begins with their conclusion—government is bad and wastes the money it spends so we need less government, always.  Then they back their analysis and argument into their conclusion.  Real research and analysis begins with collecting the relevant facts, analyzing them and then reaching a conclusion based on actual facts and thoughtful analysis. 

One fact of interest is what would be the impact on our school districts which would not be collecting all the sales taxes they would pay.  In the short run here’s my estimate of what it would do, using the State Department of Education’s latest OCAS reporting for all school districts, FY 2015-16.  The reporting code Object series 600 is entirely stuff, like supplies, that would be subject to sales tax.  That total for all funds, all districts, was $676.5 million.  Additionally, in the reporting code Object series 300-500’s (construction services that includes materials and some utilities) that totaled $879.9 million and Object series 700’s (school buses and equipment) that totaled $267.9 million, there is much also subject to sales taxes.  Let’s just do it the OCPA way (check out Something Special,Waiting for Dave Bond, and Done Waiting for Mr. Bond) and pull a number out of the air, or maybe out of their Data Tool, and say $123.5 million of those Object series expenditures is also taxable.  

That makes total expenditures by school districts in FY 2016 that would be subject to sales taxes about $800 million.  The combined state and local rate statewide is about 8% so that comes to $64 million additional funding school districts will require to maintain their already declining business as usual.  And what is your plan to replace that $64 million Mr. Small, our Tweedledee?  Oh, I forgot.   You don’t really care as long as it makes it harder to provide government services at all levels, because you know that government is bad, wasteful, and bad.  Besides we can educate all our children by putting them in front of a computer screen all day—just need an adult to take attendance…or not.

Lunch on me for the first to ID the photo location.  ID’d by Terry Young–sort of.


You’re Not in Kansas Anymore


Lobby of Kansas City Hotel Phillips and Fountain Plaza adjacent to hotel, ID’d by Ryan Mahoney

It has been an interesting few days corresponding with Steve Anderson, a “research fellow”, with the Oklahoma Council of Public Affairs.  It began with his comment in response to my Friday post Shooting Fish in a Tank by which I detailed my critique of the ten “facts” he had found using the OCPA’s school finance data tool and wrote about the week before on their website.  Here is his comment:

April 15, 2017 at 12:13 pm Steve Anderson says:

I would love to debate you on these items in a public format because I see your understanding of sources and uses of fund is not very developed and the public really should know the full story behind these items. There was not enough time or room to fully develop the issues with those items and a good debate would be very informative to listeners. I believe OCPA will make time available on their radio show for a good exchange of information. Will look forward to your response. Steve Anderson

On Sat, Apr 15, 2017 at 2:19 PM, Gary Watts wrote:

Mr. Anderson,

Thank you for your comment.  I would be delighted to discuss matters related to school finance in Oklahoma with you in a public or private setting.  I reside in Tulsa.

Gary Watts

On Apr 15, 2017, at 15:40, Steven Anderson wrote:

I will see if Trent will give us air time.  You and I can call in.   Are you one of the signees on Sands Springs Financial statements in the past—I believe someone said you were CFO?  I ask because if so are you aware you probably have GASB violations and hence SEC violations if any bonds were issued under your tenure.  If not we can discuss the issue on the radio but if so I would not want to put you at legal risk.  Having been through a SEC claim of financial fraud for a state that occurred in 2008 and was just being prosecuted when a new administration came in and asked me to serve as state comptroller to address the issues I can tell you that they named every signatory and it took two years to get it resolved in a way that removed their personal liability—$50,000 per issue===but amounted to a guilty plea since it was actually a misreporting of pension risk.   Sand Spring’s Financial more than likely has the same issue since prior to the last two years no school in Oklahoma had TMK a fully GASB compliant financial.  All it takes to institute a investigation is a bond holder complaint.  I would not want to put you in that position.

I look forward to the opportunity to let the general public know a lot that they currently do not know about school financing including all the things that GASB requires that the schools tend to ignore.  I am sure you will bring some interesting detail to the counter argument.  Will have OCPA contact you and thank you for accepting the debate.  Every other school finance officer or administrator has either refused to respond or backed out.

On Sat, Apr 15, 2017 at 4:19 PM, Gary Watts wrote:

Yes, I was CFO at Sand Springs.  I look forward to our discussion. You seem very welcoming.

Apr 16 at 7:29 AM, Steven Anderson wrote:

My second major was math philosophy so as you can guess my interest is just the best outcome, I am a certified teacher with the intent of making that my ‘retirement’ job fairly soon and from a long line of educators so I am not anti public education.  We will avoid the bonding discussion other than there is a much better way to do it that lowers property tax rates while not having a lot of idle funds and hence the arbitrage issues.  Will have Trent contact you directly

Apr 16 at 8:39 AM, Gary Watts wrote:

I would enjoy having our discussion in person and don’t mind visiting OKC with enough advance notice–my wife is addicted to the Full Circle Bookstore.  Otherwise the telephone is fine.  My phones are 9187431410 and 9183130558.  Bond discussion is fine; my instinct is also that there is a much better way to do it.  Arbitrage in such a low interest environment seems a waste of time anyhow.  

So that is where our correspondence stood on Easter morning less than 24 hours after it began.  Notice that he has made no statement that refutes anything I said in my post about his ten facts, and I assumed that we would hear his rebuttal when we had our debate/discussion.  However, while not offering any rebuttal, notice what he does offer is a slight disparagement of my statements (“your understanding…is not very developed”) without any explanation, and a very clear effort to intimidate me by alleging I am guilty of acts that bear a $50,000 penalty, but not to worry because he won’t tell, still other school officials have always backed out after hearing this.  Wow.  Of course he also throws in that he really wants to help public education and that his family has lots of teachers—can’t tell you how many times I’ve heard other statements like that in recent years, you know “You can’t think I’m against public education because some of my family are educators.”

I did do a little quick due diligence and decided to call his bluff and bluster.  Which meant I went ahead and posted yesterday Miserables Love Company which was a critique of his most recent OCPA post “A Teacher Recruitment Tool for School Administrators”.  Of course I emailed the post to him and here is his response and my replies:

Apr 18 at 11:03 AM, Steven Anderson wrote:

After reading this piece of trash—I am guessing you were not aware that I did the original design on the very successful OPERS conversion and that you support stealing people’s retirement funding ala OTRS—I do not want to give you any mouthpiece at all.  

While I will not be the one to file a complaint with the SEC—I did look up your financials and yes they are not in compliance—I certainly would not discourage someone else from it.   

After thinking “Lions and Tigers and Bears, oh my!” we continue

Apr 18 at 11:16 AM, Gary Watts wrote:

If “very successful” means putting employees into more expensive and less effective individualized plans then I agree.  And looks like “stealing” means supporting a retirement system instituted by the popular vote of Oklahomans many decades ago.  Enjoy your day; I will.

Apr 18 at 12:22 PM, Gary Watts wrote:

In the interest of public accountability what is the SEC rule you allege I have violated?

Notice again no substance, just bluster and a threat.  Of course I needed to confirm that it is an empty threat so I did a little more due diligence.   Since Mr. Anderson’s OCPA bio says he was recently budget director for the State of Kansas I searched on SEC and the State of Kansas and found this Kansas SEC Order, a Cease and Desist Order, from August, 2014.  In a nutshell the State had issued $273 million in bonds during 2009 and 2010 when its State audit/financials did not clearly disclose the State’s obligation for several billion dollars of unfunded actuarially accrued liability for the state’s pension system, KPERS.  The SEC alleged this failure was potentially deceptive to bond investors and the Order requires that Kansas fully disclose its responsibility for the unfunded pension liability in its future financial statements, audits and disclosures.

Sound familiar?  Not the failure to disclose part but the unfunded liability of state pension plans.  My last post, Miserables Love Company, has links that show the extent of the Oklahoma Teachers Retirement System (OTRS) unfunded liability that is also eye-popping.  However, here is the critical part of the SEC Order that distinguishes it from Oklahoma, in paragraph 5 on Page 3:

5.  The State was not the only obligor of the total retirement system UAAL. Other obligors included, but were not limited to, local school districts and local governments.

Based on this order I suspect school districts in Kansas have since made sure they state their share of the UAAL, whatever that may be, in their financials and disclosures for bond issues that are regulated by the SEC, because, according to the Order, school districts are also obligors for future retirement payments to teachers.  That makes sense.

However, Oklahoma is different.  As I have stated in previous posts, that is just not the law in Oklahoma.  I have practiced school law in Oklahoma for over 25 years, have read our state case law concerning our public pensions extensively over the last few years, and have read nothing that suggests school districts in Oklahoma are obligors for the UAAL of the Oklahoma Teachers Retirement System or for future retirement payments to their teachers.  Here is a 1996 Attorney General Opinion that clearly places the obligation with the State of Oklahoma, not school districts or any other political subdivision of the state.

Perhaps partly a result of the Kansas matter the Governmental Accounting Standards Board (GASB) issued Statement 68 in 2012 that now requires our school district audits, whether fully GASB compliant or not, to disclose the district’s “share” of the OTRS UAAL even though it is not a legal obligation.  Our State’s Pension Commission, including Auditor Jones and Treasurer Miller, fought this standard being applied to Oklahoma school districts due to the fact that Oklahoma law places the obligation squarely with the State.  Here is the Pension Commission Letter to the GASB board in 2011 which includes this:

“In Oklahoma, and perhaps other state jurisdictions, the long-standing case law clearly makes pension obligations the legal obligation of the State.  There is no legal or factual way in Oklahoma for a local employer to pay for any portion of the ultimate pension.”

Since GASB 68 the Sand Springs FY 2016 Audit has included disclosure of this “liability” as required, but also includes a statement on Page 37 that begins, “The District vigorously disputes the use of the term “liability” in so far as it suggests the District is legally responsible for payment of the calculated pension liability.” 

As for most school districts, including Sand Springs, not having a fully GASB compliant audit, which seems to give Mr. Anderson heartburn, doing so in most districts would mean incurring the expense of having its plant (school buildings) and equipment all appraised, at taxpayer expense, and placing those values on the books and maintaining depreciation records, etc., likely entailing the employment of addition staff.  And after that effort I guess each district would know the depreciated value of their school buildings that they already know they have; how that helps educate kids escapes me.  If school districts were private entities and their net worth determined their ability to borrow it would make sense.  But school districts’ ability to borrow is primarily based on the stability of their property tax base, and the buildings Mr. Anderson would have us appraise aren’t even on the tax rolls.  Conducting useless appraisals has never been a priority for expenditure of district funds.  So much for the OCPA’s commitment to small government.

Good luck guessing either photo location for a free lunch; they are as close to Kansas as I could find.

Miserables Love Company

It’s been an exciting couple of days for this Thinker—I got to meet another Thinker and have been challenged to a debate by one of my favorite Limited Thinkers.  The other Thinker is E. Carlton James whose letter to the Tulsa World about health care policy put my previous posts on the same subject to shame, namely Looking for Mr. James, Not An Old Geezer Yet, Dennis Not The Menace, and A Spoonful of Sugar.  He invited me to his Downtown Kiwanis Club lunch meeting where we heard an update about Up With Trees, an organization started long ago by former Street Commissioner Sid Patterson that has made a huge difference in Tulsa’s urban environment.  We also discovered that Mr. James and my father, both engineers, worked for many years together at Douglas Aircraft.

Even though I look to the Oklahoma Council of Public Affairs for silly things they say to correct as the inspiration for many of my posts, being a shy Thinker I really haven’t made a great effort to share my posts with them so they can improve their thinking—until now.  Using the OCPA contact email address I made them aware of my post Shooting Fish in a Tank which was a critique of their research fellow Steve Anderson’s recent blog about the OCPA’s school finance data tool.  In response Saturday afternoon he commented:

“I would love to debate you on these items in a public format because I see your understanding of sources and uses of fund is not very developed and the public really should know the full story behind these items. There was not enough time or room to fully develop the issues with those items and a good debate would be very informative to listeners.  I believe OCPA will make time available on their radio show for a good exchange of information. Will look forward to your response. Steve Anderson”

I replied that I’d be happy to have a discussion with him.  We’ll see what develops.

Meanwhile, I can’t resist piling on by critiquing another post by Steve Anderson, especially since he’s waded into my favorite Thinker topic—the Oklahoma Teachers Retirement System (OTRS).  His April 12 post on the OCPA site is “A Teacher Recruitment Tool for School Administrators”.  In it he correctly points out that about a billion dollars annually is paid over to OTRS from teachers and other covered employees, their school district employers and dedicated state revenues.  That is a lot of money and Mr. Anderson wants to play with it.  Before describing his Teacher Recruitment Tool though he gives a shout out to another Oklahoma Tank, The 1889 Institute, and its recent report on teacher pay.  I appreciate the referral because now I have another source of limited thinkers upon which to base posts, including this one as you will soon see.

Back to Mr. Anderson’s Tool:  his bright idea is to allow school districts to offer new teachers the option of opting out of OTRS, keeping 4% of the 7% required contribution that otherwise would have gone to the retirement system, and letting the school districts use the remaining 3% and all of the 9.5% required employer contribution, to adjust new and old teachers’ compensation or for other district needs.  You can read it yourself if that wasn’t totally clear.  He seems to be focused on a pool of potential teachers out there who want to teach in Oklahoma for just a few years so aren’t interested in giving up 7% of their salary to a retirement plan they will never enjoy.

His Tool is lacking in many ways.  He expresses satisfaction, with his Tool, that it will allow the new teacher to put money into an IRA.  I’m not sure he understands that the 7% teachers put into OTRS is available to them upon ending their teaching employment in Oklahoma, plus interest earned (now at 4%), which withdrawal, I think but am not certain, can be rolled over into an IRA.  So if the teacher’s goal is to set aside a portion of her salary for an IRA that can already be done, sans Tool, though admittedly without the same flexibility.

More importantly his Tool demonstrates Mr. Anderson’s misunderstanding of the purpose of the bulk of the payments into OTRS.  Here are the OTRS 2017 facts as I have presented before and taken from the most recent OTRS actuarial report.  (Here are my earlier OTRS-related posts: Fouling Our Nest….Egg, What’s Up Doc? or Should Teachers Eat A Carrot?, Lies, Damned Lies, and Statistics, and Hello World)  The last entry under the UAAL column in the top chart is $7.6 billion.  That is the debt the State of Oklahoma (not local school districts despite GASB’s silliness) owes to us OTRS Geezers and current teachers that past legislatures have failed to fully fund.  You don’t have to take my word for it because the Oklahoma Supreme Court in its Baker decision and others since has made it perfectly clear.

What also is made clear by the annual actuarial reports is shown in the bottom chart (OTRS 2017)—that the $1 billion annual payment into OTRS that Mr. Anderson wants to play with is made up of two parts.  The first part is the “normal cost” which is the amount going into the system’s reserves to pay for the current year’s active members’ additional retirement benefits earned for working the additional year.  If that “normal cost” had been faithfully paid into the system every year since its inception then there would be no UAAL, unfunded actuarially accrued liability.  But it wasn’t and so the State has a $7.6 billion debt to current and future retirees.  That’s the bad news; but here’s the good news.  Recent legislatures have put a plan in place that is on track to fully fund OTRS and here’s how it worked with the $1 billion (see the $1,019.88 in the bottom chart) in 2016.  $445.48 million went to pay for the “normal cost” and thus was a direct benefit to the contributing teachers that year.  It is also 10.47%, or about 10.5%, of payroll.  Where does that money come from—7% from the teachers’ required contributions and 3.5% from their employer school districts required 9.5% payments into OTRS (average is 10.24% because more is paid for those financed with federal funds).  Specifically, the amounts were $294.46 million from teachers and $151.02 million from their school district employers.  What happened to the remaining $284.52 million paid in by employers and the $289.88 million paid directly by the State—that total of $574.4 million went to pay down the $7.6 billion UAAL, i.e. the debt owed by the State to fully fund its past promises to teachers, both retired and active.

So here’s the bottom line:  if Mr. Anderson or anyone else, like Representative Randy McDaniel (oh how we miss our midtown McDaniel, Jeannie) through the retirement bills HB 1162 and 1172 filed but hopefully dead this session, wants to play with newly hired teachers’ contributions to OTRS, then the most of what is theirs is 10.5% of payroll, made up of their 7% and 3.5% from the employer.  McDaniel wanted to give them more; Anderson wants to give them less.  But neither one faces up to the reality that the remaining 6% (of the 9.5%, actually a little over 10%, from employers) is needed to pay off the State’s debt to OTRS, i.e. the UAAL.  If they play with that part of it then they are kicking the can further down the road at best and jeopardizing the financial security of us now and future Geezers at worst.   And if they play with that part of it they need to have an actuarial analysis done on any proposed changes so they and all of us are fully informed about the financial consequences.

So much for Mr. Anderson’s Tool, the first “Miserable” thought I’m addressing in this post.  The second Miserable is what I allege is a huge factual error in the teacher salary report by The 1889 Institute referenced by Mr. Anderson.  The report’s authors are Baylee Butler and Byron Schlomach (makes my thoughts wander to the famed Slomo of Pacific Beach in San Diego).  Their report does a couple of things, trying to reach the conclusion they started with that pay for Oklahoma’s teachers is just fine, namely it determines an actual average compensation that includes benefits as well as salary, and it adjusts that amount to compare with other states’ averages adjusted for cost of living.   I may come back to other aspects of the report in future posts but now am going to address just one part.  Here it is:

“The latest federal statistics on teacher salaries that allow comparisons across states come from the National Center for Education Statistics (NCES) for the 2015-16 school year. These indicate that Oklahoma’s average teacher salary is $44,921.  … This rate of pay, however, does not include the value of benefits. When benefits are included, pay increases considerably, by about 47 percent, or $21,113 for a total average cost per teacher of $66,034.”  (footnote 4)

When I read the first part it didn’t surprise me, the $44,921 average, not saying it is fully accurate, but based on ten years’ experience dealing with school district payroll for over three hundred teachers it seems a high, but plausible number.  But the final number, $66,034, is wrong and most certainly misleading—hence another Miserable.  I anxiously looked at footnote 4 for an explanation and found this:

Author calculations based on Digest of Education Statistics, National Center for Education Statistics, Table 236.5, https://nces., and Oklahoma School Finance: Technical Assistance Document (Oklahoma City: State Department of Education, 2014).”

I have not worked with the NCES data base very much but I think it is just the source of the starting point of $44,921.  I am very familiar with the SDE Technical Assistance Document and haven’t a clue how the authors chose to misunderstand what is there.  Here’s how I do the math, again based on ten years’ experience working hands-on with school district payroll costs.

Salary:                                                                          $44,921

Employer Social Security Burden 7.65%:                  $3,436

OTRS Employer Burden 9.5%:                                    $4,267

Health Insurance, $526.88 x 12:                                $6,323

Dental and Life (district only):                                   $400

Total District Benefits Cost:                                        $14,426

Total District Payroll Cost:                                          $59,347

A couple of notes about my numbers:  the health insurance amount is too large, but not by much and I don’t want to complicate the calculations any more by explaining: and the Dental and Life is an approximate amount that my school district added to benefits which is likely part of the Salary amount calculated by NCES anyhow, but giving the authors the benefit of the doubt.

So how do they get to $66,034?  I’m guessing, and here’s where it ties in to the rest of this post, that they attribute the State’s direct contribution, the 6.81% from the OTRS 2017 bottom chart, to each teacher, which would add another $3,059 to the total “cost”.   But that makes the total $62,406, still shy of their eye-popping total.  Until I see the “author calculations” I can’t explain their number and bet they can’t either.

Here’s the rest of the story.  Show me a teacher whose actual salary is $44,921 and I can make a case that the total “cost” attributed to or connected with that teacher under our current system for financing education is the $62,406 I came up with, or something very close to that.  But if the question asked is what is the total economic benefit to the teacher then my answer would be very different, namely I would take out all of the employer’s OTRS burden except the 3.5% that, along with the teacher’s 7%, pays for the “normal cost” to OTRS of having that teacher employed the additional year.  That amount in our example would be $1,572, and, after removing the State’s $3,059 that doesn’t benefit the teacher either, the total, salary and benefits, for our teacher making $44,921 is $56,652, almost $10,000 less than the Miserable number the report’s authors have incorrectly posited.

As always lunch on me for the first to ID the photo location.

Shooting Fish in a Tank

I first planned that this post would be an update to earlier posts House Bill 2244 and A Turkish de Fright concerning our ongoing saga with the misdirection of over $20 million by the Oklahoma Tax Commission in apportioning motor vehicle collections among Oklahoma school districts.  That is because I expected that April would be an “under-collection” month and thus become the last of the twelve calendar months to “go bad” as I say it.  But it didn’t, so I must await the decision by the Oklahoma Court of Appeals where the successful challenge by eight Oklahoma school districts has been appealed by the Tax Commission.   You can see how it progresses by checking here:

Instead I was forced again to the OCPA website ( where I found easy prey, like shooting fish in a barrel (or in a so-called “think tank”), in an April 6 post  by “research fellow” Steve Anderson who simply adds to his credentials as a limited-thinker.  He encourages his readers to make use of the OCPA’s “education finance data tool” and concludes, “Here are ten interesting facts I discovered on a recent visit.”  So here they are followed by the rest of the story.

1)  The Reydon school district spent $43,817 per student on 123 students while Epic One on One Charter School spent $4,786 per student on 5,631 students.

Reydon is a small district in Roger Mills County that serves live students in real brick and mortar buildings.  Epic is a virtual charter school, wholly immune from class size requirements, offering “classes” online to students who may or may not have any adult supervision while they are “in class”.  The State doesn’t negotiate with Epic over what it pays for these “educational services”, it just forks over the State Aid per student which its enrollment supports.  Back to Reydon, where students are in buildings, under adult supervision, offered meals, and transported to and from school, I knew immediately the eye-popping number, $43,817, must have something to do with a new bond project.

A little real research, instead of gratuitous attention grabbing, and we find that over half of Reydon’s FY 2016 expenditures were for a new bond project to construct a gymnasium.  We could dig further, but that’s enough to show Mr. Anderson’s “fact” is not an “apples to apples” comparison, rather it is intentionally (unless he is more limited than I suspect) misleading.  Also check out these SDE posted grade cards for Reydon and Epic; for what they are worth, maybe not much, looks like at least the good folks in Reydon are getting better value for their dollars.  Epic Elementary Grade Card Epic High School Grade Card Reydon High School Grade Card and Reydon Elementary Grade Card

One last word about Epic Charter, its Average Daily Membership and Average Daily Attendance are always the same—meaning Epic students never, never miss school.  Isn’t that amazing—and quite silly–but it actually raises its SDE grades.  It also reminds me of a barber shop conversation I had years ago when my barber told me her 15-year-old daughter was “home-schooled”, and when I inquired where her daughter was at that time, being the school lunch hour, she replied, “Oh, she’s at home with her boyfriend who’s also home-schooled.”

2)  In FY-2016 public school expenditures totaled $559,282,418 for “facilities acquisition and construction.” This is by far the fastest-growing category of school expenditures, having grown by 30 percent since 2012.

Or he could have used 2011 as the base year and touted “having grown by 18 percent” but that’s not as dramatic as 30 percent.  I think the point he’s trying to make is that all we hear from public school officials, or “ the Blob” as the OCPA likes to call schoolteachers, are complaints about not enough funding but here they are spending the money on buildings instead of teacher pay and kids.  The real “fact” is that expenditures classified as Facilities Acquisition and Construction are almost entirely financed with bond issue proceeds which cannot be used for teacher salaries–period…period…and period.  Even if they could be, it would be financially irresponsible to use one-time funding (bond sale proceeds) for recurring expenses like salaries for classroom instruction.

3)  In FY-2016 Oklahoma public schools devoted 44 percent of their total expenditures to instruction.

This requires a little explanation after which, if I explain it well, you will understand more about Oklahoma school finance than Mr. Anderson does.  The OCPA “data tool” uses the “function” categories of expenditures that are required by the State Department of Education, namely (with FY 2016 totals) Instruction ($2,931.5 million), Support Services ($2,112.4 million), Non-Instructional Operations ($419.5 million), Facilities Acquisition & Construction ($559.3 million), Other Outlays ($670.7 million) and Other Uses & Repayments ($19.0 million) for a grand total of $6,712.3 million.

Here are the real facts:  Non-Instructional Operations is entirely child nutrition services, i.e.  the national school lunch program and these funds cannot be used for Instruction; Facilities Acquisition & Construction comes almost entirely from bond proceeds which cannot (except for textbooks and other instructional equipment) be used for instructional purposes; 90% of Other Outlays is the debt service on the bond proceeds, so it’s also not available for instruction and its inclusion in the 56% (remaining after 44% above) is shabby “double-counting” that proves Mr. Anderson is a limited thinker or is intentionally trying to misrepresent the facts; and Other Uses/Repayments are not significant or available for instruction.

What is available for Instruction, by Oklahoma law, is almost entirely in school districts’ general funds.  Here’s what the FY 2016 statewide general fund totals show:  60% goes to Instruction (mostly for teacher and teacher assistant salaries), 21% goes to direct student support services like counselors, school site principals, speech therapists, school nurses, librarians, student transportation, etc., and 9% to operate school buildings (custodians, utilities and insurance).  The facts are that of the funding that is truly available for “instruction”, 90% of it goes directly to instruction or to services every classroom teacher will tell you is essential to operate a real school.  The remaining 10% does go for other services like running payroll, paying bills, district-wide administration, and including a large part that shows up as Non-Instructional Services for those districts that operate the school lunch program through their general fund instead of a separate fund.

Here is the actual SDE data I have used:  FY 2016 Expenditures

4)  Since 2012, instruction has grown by 2 percent while non-instructional operations have grown by 5 percent.

So what?  Remember from above that “non-instructional operations” is the function that is entirely districts’ school lunch programs, mostly financed by parents and earmarked federal funds.  So this just means that student population (up 3%) and food costs have risen faster than the Oklahoma Legislature’s willingness to fund education in Oklahoma.  Again either Mr. Anderson is a limited thinker or he believes he can fool his readers.

5)  The state’s two largest school districts (Oklahoma City and Tulsa) were given $1,171,697,399 to spend in 2016—but they spent only $912,953,502, leaving 22 percent of the funds citizens gave them sitting in their accounts. 

This is just a regurgitation by Mr. Anderson of his lame post last summer asking “Why are school districts sitting on so much cash?”  I answered his question in two August, 2016 blog posts, Where to Begin? and Paradox of Thrift.  In a nutshell the general fund part of that 22% “sitting in their accounts” on June 30, 2016, was fully encumbered to teacher salaries the next day, July 1, so the general fund balances, i.e. unencumbered cash, are really an illusion, are also needed to manage cash-flow till January property tax revenues are received, and using one-time funding for recurring expenses is stupid, especially in this OCPA/Legislatively-imposed funding recession.  Other fund balances outside of the general fund, by law, are not available for teacher salaries.

6)  Schools are also tax collectors: In 2016 they spent $16,774,312 on “tax assessment and collection services.”

These are payments required by law to the 77 County Assessors statewide for annual “revaluation expenses”.  Cities, school districts, and other recipients of local property taxes, are all required to pay these costs.  This one seals it, Mr. Anderson is truly a limited-thinker and probably believes all the deceptive calculations he presents to his readers.

7)  Last year public schools spent $151,069,368 on “vehicle operation services” and another $46,920,407 on “vehicle servicing and maintenance.” Perhaps it’s time to start leasing vehicles and sharing them between districts.

Duh—how’s that???  I’ve been part of many discussions about how to save on pupil transportation expenditures.  Leasing doesn’t reduce costs, it’s just another way of paying for them.  And how do districts share school buses?  Do we have the Union Public Schools and Broken Arrow Public Schools stagger their start times so the same buses and drivers can run multiple routes?  Sorry, I just don’t get it, nor do I think parents would either.

8)  Since 2010, the amount of direct federal funding to the Oklahoma City school district has fallen from $99,313,879 to $61,683,025, despite increasing federal requirements for schools. Perhaps citizens should be complaining about the former Obama Administration instead of pointing solely to our state’s political leaders.

Earth to Mr. Anderson, did you ever hear of the Great Recession which was in full force when Barak Obama was sworn in as President in January, 2009?  Shortly thereafter Congress, I’m sure over the objection of the OCPA and like-minded limited thinkers, passed the American Recovery and Reinvestment Act (ARRA) to provide a quick infusion of economic stimulus that helped stop the nationwide bleeding of jobs and output.    Public school districts were greatly favored by President Obama under ARRA and substantial new federal funding flowed into schools nationwide.

Here’s the total federal spending for each year, remembering a district fiscal year ends June 30, in Oklahoma:  2008 $470 million, 2009 $587 million, 2010 $777 million, 2011 $775 million, 2012 $574 million, and most recently in 2016 $482 million.  The OKC’s federal funding is lower than in 2010 because ARRA was intended to be a limited time stimulus, and it worked.  Mr. Anderson, Oklahomans who care about public education in Oklahoma owe President Obama and the 2009 Congress a huge “thank-you” for preventing the losses that Oklahoma schools would otherwise have suffered, and for having the good sense to implement macroeconomic policies that brought the United States to recovery far ahead of international partners that relied on “austerity” plans.

9)  The single largest cash item on statewide public school revenue sheets is account balances from prior years.

As we lawyers say “asked and answered”.  See my earlier posts Where to Begin? and Paradox of Thrift.

10)  In terms of spending per student, 11 of the 12 lowest-cost districts are charter school districts, ranging from $6,688 to $4,786.

I had the experience and privilege of providing legal services to three of Tulsa’s charter schools over the first dozen years of the Oklahoma Charter School Act.  They get 95% of general fund revenues and are eligible for the federal lunch program.  They do not have access to bond funds or to building fund revenues so they are at a revenue disadvantage compared with our school districts; my quick and dirty estimate is that a charter school student is funded at roughly 80% of her regular school district peer.  My somewhat educated guess is that they close that gap primarily by paying lower average salaries, not providing student transportation services and serving a student population with fewer disabilities on average.  My guess is not a fact, but is a reminder of what is so frustrating about the OCPA and its so-called “research fellows” like Mr. Anderson.  It might be useful to policy-makers to have such insight about charter schools in Oklahoma that is factual, not just shallow regurgitation of preformed and uninformed conclusions.  But such real research does not come out of the OCPA tank.

As always lunch on me for the first to ID the photo location.


Voter Fraud Déjà Vu

  All Related

Recent sad headlines in the Tulsa World about the Tulsa Public Schools budget reduction recommendations brought back memories from my days/years as a candidate for (1976, 1980 and 1984) and member of (1980 to 1986) the Tulsa School Board when school consolidations were front and center as the district’s leadership dealt with the realities of declining enrollment.  I experienced first-hand the challenges the TPS community will now experience in response to Superintendent Gist’s recommendation to consolidate schools in west Tulsa.  The headlines also brought back memories of my actual encounter with likely real voter fraud in my school board election, not the kind that Crybabies like the OCPA may tout, but never document, to support voter suppression.

My first campaign in 1976 evolved out of great frustration by the Tulsa Classroom Teachers Association with the school board and then Superintendent Bruce Howell.  Back then Tulsa board elections were based on an election ward only primary to nominate two candidates who then squared off in a school district wide general election.  As a candidate you had to have enough support in your own area to make the final, but then had to appeal to voters throughout the school district to win the general election.  No more than several hundred to a couple of thousand would vote in the primary ward elections, whereas the general election turnout was ten to fifteen thousand.  I ran close, but not close enough, in 1976, losing to incumbent Mary Warner, so decided to try again in 1980.

In 1980 Larry Zenke was superintendent and he had healed the wounds with TCTA so my 1976 raison d’etra (four years studying French have to mean something) had largely evaporated.  Instead the cause celebre (OK, I’ll stop) was declining enrollment.  Tulsa Public Schools enrollment had peaked at 80,115 for the 1968-69 school year, then the double whammy of baby-boomer demographics and court ordered desegregation brought about a rapid decline over the next decade to under 50,000 and under 45,000 by the 1984-85 school year.  After a few more years of slow decline TPS enrollment bottomed out and has remained fairly stable I think at around 40,000—about half of its peak.

The financial reality of losing almost half the district’s student population in just a few years was compelling so Superintendent Zenke and the Board, including my opponent Mary Warner, had embarked on an aggressive program to reduce the number of schools in operation.  The poster child for this very stressful time of decisions was the closing of Mason High School which had opened just five years earlier after being approved for bond funding when increasing student enrollment and annexation were still the expected norm.

Nothing motivates parents to become active politically than threatening closure of their neighborhood school.  I didn’t have to say I was opposed to closing schools, because incumbent Warner was already on record supporting school closings, I just had to say I would keep an open mind and study each decision.  I truly wasn’t a cynical politician, knowingly exploiting citizens’ emotions, because I was too naïve and too academic.  I just knew people were concerned and thought if I studied and thought enough I might come up with a better answer—wrong.  Still as the campaign progressed I had these enthusiastic pockets of support around schools that were on the hit list.  Two of them were Wright Junior High and Stevenson Elementary.

Both were closed later that year, over my objections as a new board member.  The process Superintendent Zenke had developed established a citizens’ area council around each remaining high school.  When a school fell below the enrollment threshold set by the school board—225 for elementary, 450 for junior high, and 825 for high school—then the area council needed to make a recommendation.  The political brilliance of this process was that, as a result, advocates for schools with adequate enrollment would coalesce around a recommendation to close the under-enrolled school, thus creating a voice in support of consolidation that offset the natural voice against school closings.  Also the process resulted, I think, in the Webster council being the first to recommend moving to a K-5, 6-8, 9-12 configuration as a way to keep Webster above 825, in turn sacrificing an elementary school, Porter.

The Wright building a couple of years later was proposed to be sold to Sooner Federal Savings and Loan, but I listened to a talented local city planner, Gerald Wilhite, who maintained the better play was to move the students at neighboring Holmes Elementary into the Wright school facility which was further into the residential neighborhood, and market the Holmes property as commercial frontage at 45th and South Peoria.  That logic prevailed; Tulsa Ballet and other businesses are in the Holmes building today; Sooner Federal went bankrupt in the S & L crisis of the late 80s; and Wright Elementary still serves the neighborhood.  The Stevenson facility at 46th and South Irvington is part of the Islamic Center of Tulsa and also houses its Peace Academy school for children.

After a pretty vigorous two-month campaign I went to bed election night, Tuesday, January 22, believing I had lost by 160 votes out of 12,000 cast.  The next evening my father and I decided to go over the election returns we obtained from the county election board, precinct by precinct, of which there were 181.  We noticed right away that I handily lost two precincts, namely #60 and #108, for which the polling places were Stevenson and Wright respectively, which made no sense given the support I had due to their proposed closings.  We also knew that each polling place was required to post at that site the election results printed from its ballot counting machine.  Either that night or the next morning we checked the site results posted at each and found discrepancies, that in fact I had won each precinct by wide margins.  It turned out that the data entry at the election board had dropped the “1” from the hundreds place for my vote total at precinct 60 and only entered the remaining two digits, costing me 100 votes.  The votes for precinct 108 were not entered at all, instead replaced, by data entry error, with the results from precinct 8, which was won by Mary Warner and therefore counted twice.

I collected the sites’ printout information and went to see Harmon Moore, then Secretary of the county election board.  They readily acknowledged their errors and when the final count was certified the following day, Friday, it was 6006 for Mary Warner to 5998 for Gary Watts, a margin of only 8 votes.  At that time, and for several years after, the procedure for voting in school elections was surprisingly loose.  Polling place officials were not given registered voter lists as was done then, and now, in all other elections.  Rather the only requirement to vote was that an elector must sign the poll book along with their address.  That signing and writing of the address was each voter’s statement that they were qualified to cast a vote, i.e. registered to vote in that election district.  I had been surprised to learn how loose school elections were when I ran in 1976 and had even tried to generate some publicity for myself by addressing the issue before the school board during the 1980 campaign.  So I knew enough to know that out of 12,000 votes cast there had to be at least 8 that were not valid.

I went to see attorney friend Bill Wilkinson, then a partner with the firm I later worked for, Riggs, Abney et al, while on the Tulsa City Council.  We had already organized volunteers to start reviewing voter records at the election board and had found many who were not registered, whose names were illegible, or whose registered address was outside the school district.  We filed a petition on Friday, after the certification of the results, alleging irregularities.  Mary Warner countered with a petition for a recount of all precincts.  Our volunteers, organized by my wife Linda, worked around the clock and checked at least half of those who had voted.

At the court hearing the following week vote counting machines were brought into the courtroom and all 12,000+ ballots were recounted; the result was 6011 for Warner and 6000 for Watts.  Our burden had increased to 11 because the law requires the challenger to prove at least as many irregularities as the margin of victory, meaning that logically the court cannot determine with mathematical certainty who won.  We then presented our evidence and proved:  5 Osage County and 14 Tulsa County registered voters had cast ballots but did not reside within the boundaries of Tulsa Public Schools (which is within Tulsa and Osage counties): 21 votes were cast by persons who had been removed from the voter registration rolls;  50 votes were cast by persons for whom there was no voter registration record available; and, my favorite, two votes were cast by voters registered in Rogers County who also happened to be related to a sitting school board member.  Most of these votes were likely cast by well-intentioned persons who thought they had the right to vote—and were readily permitted.  Some were likely cast by persons who knew better and were trying wrongly to affect the outcome—Rogers County…really!

Having surpassed our mathematical burden several times over Judge William Means ordered that a new election be held.  Before an election date was set by Governor George Nigh, he appointed Mary Warner to the Oklahoma Board of Affairs, which, I think, then was the state’s purchasing authority, and she withdrew from the school board contest leaving me the only candidate and the de facto (Latin) winner, my election a fait accompli (couldn’t help myself).    As my friend the late Danney Goble reminded me after winning a second term on the school board in 1984, I couldn’t claim a “reelection” victory because I hadn’t been “elected” the first time.

My scanner broke

School board election laws were subsequently changed, in 1988 I think, and have since followed the same, reasonably secure process we follow for all other elections.  Two take-aways: first, I’m unaware of any similar proof of voter fraud (my case was showing irregularities though likely fraud also existed) in any Oklahoma election conducted by our normal process, and anyone trying to suppress voter turnout by various means should bear the burden of showing fraud is a real problem before we buy into it.  Second, Oklahoma’s voting system where every vote has a separate paper record and the machines are merely a tallying device, is an excellent system and protection against hacking mischief and other real concerns; had Florida used Oklahoma’s system in 2000 there’d have been no “hanging chads” and the outcome could have been determined with certainty.  We Okies do some things right.

As always lunch on me for the first to ID the photo locations.



Looking for Mr. James

When considering what to write about I always go first to the Oklahoma Council of Public Affairs website,, and seek inspiration from their collection of limited-thinkers.  It’s amazing that we are now in the middle of a legislative session and they have a paucity of commentary about the overwhelming budget crisis facing the Oklahoma legislature and which the OCPA’s policy advocacy over the years has helped cause—“cutting taxes will increase revenue”, duh.  They tried hard to be relevant in the quest to fund teacher pay raises, but none of their “ideas” that I summarized in my post The Glib, The Bad and The Ugly have caught anyone’s serious attention.  So forget about it, or

   (Deming, New Mexico restaurant)

Instead and in honor of the temporary cessation of our national discussion about health care policy, I want to share a letter by E. Carlton James in the Tulsa World Thursday, March 30, that sums it up so nicely.  Here is the text of the letter:

Letter to the editor: U.S. needs universal healthcare By E. Carleton James, Tulsa | 47 comments

A lesson learned early in law school: When addressing an issue, try to determine the facts before reaching conclusions.

Note the following facts:

  1. The U.S. is the only industrialized nation that does not have universal healthcare.
  2. As a percentage of Gross Domestic Product, the U.S. spends about 13 percent on healthcare; the next nine countries average less than 9 percent. Annually the U.S. spends $4,600 per person on healthcare. The next nine countries average $2,200.
  3. Life expectancy in the U.S. is the lowest of the G-7 industrialized nations.
  4. Universal healthcare is not an issue in the other industrialized countries.

If the U.S. adopted universal healthcare, its citizens would be healthier and live longer at significantly lower cost. I have been a participant in Medicare for more than 20 years and have found it to be a remarkably efficient and effective healthcare and wellness system for those over 65.

Too bad it isn’t available to all U.S. citizens.

My Geezer hat is off to Mr. James; to paraphrase our President’s recent telling comment, “Who knew fixing healthcare could be so simple.”  I rarely read comments to letters to the editor because they can be quite scary, but the discussion his letter generated is reasonable and worth reviewing as well.

The stone carving in the photo above was a nice surprise Linda and I saw with our friend Helenmarie Zachritz at the Rufino Tamayo Museum of Pre-Hispanic Art in Oaxaca, Mexico recently, pre-dating Rodin’s Thinker by several hundred years.  So no free lunch for identifying the photo location, but I am buying lunch for Sandra Taylor who has put me in touch with E. Carlton James, who may be Not An Old Geezer Yet, but is well worth Dr. Ben Carson’s, and all of our, attention.

And this:

Toeing Caucus line

Not worried ‘bout uninsured

Tulsa’s Bridenstine