Month: September 2016

Eagle Bluff Lighthouse, Door County, WI

Linda and I returned over the weekend from a very enjoyable two-week car trip around Lake Michigan so even though I’m not quite caught up with other matters I have to post a quick blog so I can use one of the new photos.  While traveling I forced myself to read “Sales Tax for Education Would Generate Millions” by OCPA fellow Steve Anderson.  He and others at OCPA seem resigned to the passage of State Question 779 which is somewhat surprising and must frustrate them to no end—imagine citizens choosing to finance more government.  His post proposes ending the sales tax exemption for public schools in Oklahoma.  His only reasoning is:  “As conservatives, we believe that disincentivizing government spending is a good thing, not a bad thing.”  In other words if we just make public schools pay sales taxes then what they do will cost more and we’ll have less of it.

He later says:  “Moreover, private-sector companies pay these sales taxes.  Making the government pay them would help level the playing field.”  Sound economic theory informs us that it is important to “level the playing field” among competitors in the same market, but that it makes no sense when talking about the interaction of private sector companies with the government.  Milton Friedman must be turning over in his grave—though he has better use of his eternity than reading OCPA drivel.

The right way to approach government services in a market economy is to first determine what services are appropriate for government to provide, i.e. public education, then determine how much, i.e. what ages and academic standards, and finally determine how to do that most efficiently.  Public education is too complicated for a short or even one blog post so let’s look at another government service—lighthouses.

We spent a little time in Door County Wisconsin which has that name because the entrance to Green Bay was called the “doors of death” by the Native Americans and trappers in that area.  To make passage into Green Bay safer lighthouses were erected to orient sailors and warn of dangerous areas.  Lighthouses are a classic example of a service best provided by government for the simple reason that, unlike a movie in an indoor theater, it can be seen by all whether they have paid for it or not.    No one shipping company might have the resources to fund all the lighthouses needed for safety, and certainly would resist others benefitting without paying, so it has long been a natural for government to provide.

Having decided that government should erect lighthouses, then it must be decided where they will be located and how designed, constructed, etc.  Once those decisions are made then it makes sense to erect, operate and maintain the lighthouses as efficiently as possible so the fees and taxes needed are as low as possible.  Where in this scenario does it make sense to then impose a sales tax on the materials needed to construct them?  That would simply increase the cost and in turn increase the fees and taxes required for their construction.  I don’t get it.  I guess Mr. Anderson just wants fewer lighthouses, period, just because.

Remember lunch is on me if you are first to identify the photo location.  And by the way Dave Bond has still not explained where the $100 million for teacher raises he promised to Channel Six’s Scott Thompson and viewers—see my Something Special post.

***Gretchen Hannefield identified the photo***

We’re approaching (Saturday, October 15, 2016) the 25^th anniversary of the “No Repeal” vote on October 15, 1991 which sealed the implementation of what was arguably our state’s greatest legislative achievement—House Bill 1017 that Governor Henry Bellmon signed into law at Tulsa’s Marshall Elementary School on April 25, 1990.  The photo above is of some of the key players was taken at a recent gathering.  Seated is then Senator Penny Williams, next left is Cathy Newsome, then Judy Eason McIntyre who was a TPS board member at that time and later State Senator; back row from left to right are Gary Allison, Charlie Cantrell, Grant Hall, then Speaker of the House Steve Lewis, Beverly Hoster and Lee Clark Johns.  Of course Lewis and Williams were giants in the legislative effort; the others were core members of the Tulsa area citizens who led the NO Repeal effort that was an inspiring success.

The genesis of H.B. 1017 was the work of Task Force 2000, established by HJR 1003 in 1989, and appointed by Governor Bellmon, Speaker Steve Lewis and President Pro Tem Bob Cullison.  It was chaired by Tulsa businessman George Singer; other members included Howard Barnett, now President of OSU-Tulsa, then State Superintendent John Folks, Wilma Mankiller, Tulsa businessman Joseph Parker, Jr., and our last Tulsa County Superintendent Kara Gae Wilson (now Neal).

Governor Bellmon called the Legislature into special session on November 6, 1989 to receive the Task Force 2000 report “Oklahoma’s Public Education:  A Blueprint for Excellence” and to act on education reform legislation.  Beginning on November 15, when House Bill 1017, incorporating many of the report’s recommendations, passed the House but without the emergency clause, there ensued months of deliberations, conferences and votes (including a statewide teacher walkout in advance of the House passage of the emergency clause) with final Senate approval coming on April 19, 1990 and the Governor’s approval on April 25.

This historic education reform legislation included a funding increase initially of $230 million by a 1% hike in the income tax rate and 0.5% in the sales tax rate.  The funding legacy of HB 1017 is that in FY 2016 the “HB 1017 Fund” was $886 million, over 1/3 of public schools’ funding.  It also provided for greater equity in the funding formula to narrow the gap between property tax rich and poor districts.  The minimum teacher salary was increased from $15,060, in 1990, to $24,060, in 1995; it is now $31,600.

The funding also provided for greatly expanded early childhood education; mandatory kindergarten; school district consolidation incentives (resulting in a reduction from 609 to 550 districts); limiting class sizes to 20 for elementary and 140 per day for secondary teachers.  The reforms also included provision for teacher assistants, eliminating county superintendents, statewide curriculum standards, competency testing, college ready courses, alternative certification for teachers and mandatory professional development.  The existing teacher tenure law was replaced with providing for teacher dismissal due process hearings to be held before local school boards.

After passage of this landmark reform legislation, opponents organized and collected signatures on an initiative petition to repeal HB 1017.  Governor Bellmon set October 15, 1991 as the election date for State Question 639.  Statewide campaigns for Vote Yes Repeal and Vote No Repeal ensued.  On election day a record number voted with an especially huge turnout for No Repeal in northeast Oklahoma.

Result:   Yes  360,318  45.67%

No   428,680  54.33%

HB 1017 remains Oklahoma law.

Epilogue:   SQ 640 immediately circulated by opponents of HB 1017, passed with 56% of vote in March, 1992, requiring 3/4 vote of legislature to increase any tax.

Personal Note:   As a former school board member and elected city official I was so used to voting Yes on ballot measures that I reflexively did just that and, for the first and only time as a voting citizen, had to “spoil” my ballot and ask for another so I could vote No.

 

We’re approaching (Saturday, October 15, 2016) the 25^th anniversary of the “No Repeal” vote on October 15, 1991 which sealed the implementation of what was arguably our state’s greatest legislative achievement—House Bill 1017 that Governor Henry Bellmon signed into law at Tulsa’s Marshall Elementary School on April 25, 1990.  Since this blog is supposed to be about correcting misinformation spewing from the other OCPA I looked quickly at their recent posts for a connection and it didn’t take long to find a connection.

Senior Vice President Brandon Dutcher, in anticipation of Labor Day, on a post dated August 31, 2016 alleges the Oklahoma Education Association, as a union for teachers, has failed them because teachers “should demand to know why an education system with $8.7 billion in total revenue last year, the most in state history, can’t seem to raise teacher pay.”  Click on “raise teacher pay” and you get his March 4, 2016 blog “The $7,000 Teacher Pay Raise That Wasn’t”.

I will have fun in the future fully vetting that post but the gist of it is that school districts across the country and in Oklahoma during recent decades have increased “non-teaching” staff at higher rates than the number of teachers.  If all those non-teachers had not been hired since 1993, at the rate of $50,000 each annually (you have to listen to the video for this number), then there would have been enough money to give Oklahoma teachers the $7,000 raise.  He even cites my district, Sand Springs, to illustrate this horrible imbalance.

For a very quick and dirty response I know that by far the largest work group of non-teachers at Sand Springs are teacher assistants and are second only to the number of teachers in the district.  A safe estimate we would use for the annual cost of a teacher assistant position was $25,000.  The next largest employee groups would be cafeteria workers, bus drivers and custodians, with virtually all, like the teacher assistants, working 180 day contracts.  Using a $50,000 average to get to the $7,000 raise makes no sense and is shabby math.

Now for the transition to House Bill 1017:  it promoted the use of teacher assistants as a cost effective way to provide more individualized services to younger students because the expansion of Kindergarten and 4-year-old programs were two of its primary reforms and are probably the largest drivers of the increase in teacher assistant positions.  The genesis of H.B. 1017 was the work of Task Force 2000, established by HJR 1003 in 1989, and appointed by Governor Bellmon, Speaker Steve Lewis and President Pro Tem Bob Cullison.  It was chaired by Tulsa businessman George Singer; other members included Howard Barnett, now President of OSU-Tulsa, then State Superintendent John Folks, Wilma Mankiller, Tulsa businessman Joseph Parker, Jr., and our last Tulsa County Superintendent Kara Gae Wilson (now Neal).

Governor Bellmon called the Legislature into special session on November 6, 1989 to receive the Task Force 2000 report “Oklahoma’s Public Education:  A Blueprint for Excellence” and to act on education reform legislation.  Beginning on November 15, when House Bill 1017, incorporating many of the report’s recommendations, passed the House but without the emergency clause, there ensued months of deliberations, conferences and votes (including a statewide teacher walkout in advance of the House passage of the emergency clause) with final Senate approval coming on April 19, 1990 and the Governor’s approval on April 25.

This historic education reform legislation included a funding increase initially of $230 million by a 1% hike in the income tax rate and 0.5% in the sales tax rate.  The funding legacy of HB 1017 is that in FY 2016 the “HB 1017 Fund” was $886 million, over 1/3 of public schools’ funding.  It also provided for greater equity in the funding formula to narrow the gap between property tax rich and poor districts.  The minimum teacher salary was increased from $15,060, in 1990, to $24,060, in 1995; it is now $31,600.

The funding also provided for greatly expanded early childhood education; mandatory kindergarten; school district consolidation incentives (resulting in a reduction from 609 to 550 districts); limiting class sizes to 20 for elementary and 140 per day for secondary teachers.  The reforms also included provision for teacher assistants, eliminating county superintendents, statewide curriculum standards, competency testing, college ready courses, alternative certification for teachers and mandatory professional development.  The existing teacher tenure law was replaced with providing for teacher dismissal due process hearings to be held before local school boards.

After passage of this landmark reform legislation, opponents organized and collected signatures for an initiative petition to repeal of HB 1017.  Governor Bellmon set October 15, 1991 as the election date for State Question 639.  Statewide campaigns for Vote Yes Repeal and Vote No Repeal ensued.  On election day a record number voted with an especially huge turnout for No Repeal in northeast Oklahoma.

Result:   Yes  360,318  45.67%

No   428,680  54.33%

HB 1017 remains Oklahoma law.

Epilogue:   SQ 640 immediately circulated by opponents of HB 1017, passed with 56% of vote in March, 1992, requiring 3/4 vote of legislature to increase any tax.

Personal Note:   As a former school board member and elected city official I was so used to voting Yes on ballot measures that I reflexively did just that and, for the first and only time as a voting citizen, had to “spoil” my ballot and ask for another so I could vote No.

Remember lunch on me if you guess the photo location.

My heart went pitty pat when I saw this email in my inbox yesterday at 4:35 p.m. almost as much as with this morning’s earthquake:

Re: Educate Oklahoma

Dave Bond <dave@ocpaimpact.com>

Sep 2 at 4:35 PM

To  Gary Watts 

Gary, my apologies for the delayed response. The finishing touches are being put on a summary of the reform, which we should be able to forward to you next week. The reform was passed during the 2015 legislative session at the state Capitol as House Bill 1567. Principal authors were Rep. Glen Mulready, of Tulsa, and Sen. Greg Treat, of Oklahoma City.

Thank you for reaching out to us. Will forward that more expanded summary to your soon.

All the best,

Dave

Dave Bond

OCPA Impact, Inc.

405.684.0563 mobile

dave@ocpaimpact.com

www.ocpaimpact.com 

This summer Linda and I watched (for me probably the 20^th time) my favorite musical “The Music Man” with our grandchildren (for them the first time).  Now our grandson is beginning trombone instruction in the 6^th grade (so happy the arts haven’t been eliminated in their district) and knows the source of the most iconic song about that instrument.  My favorite has always been the part when little Ron Howard and the rest of River City are awaiting the Wells Fargo Wagon as he anticipates “something special just for me”.  That will be my emotion this lovely Labor Day weekend as I anxiously await Dave’s explanation of the $100 million he assured Channel Six viewers last week on “Educate Oklahoma” is available for teacher pay raises.

Here is House Bill 1567:  HB1567 ENR

which makes this change only:

The Health Insurance Plan may provide for the application of deductibles and copayment or coinsurance provisions, when equally applied to all covered charges for services and procedures that can be provided by any practitioner for the diagnosis and treatment of a particular illness, disease, injury or condition unless deductibles, copayments or coinsurance variations that are based on contracts with providers for specific services based on levels of outcomes or cost.

Therefore, by deleting 37 words and adding back only 3 (can’t get them underlined so bold italic) we will have $100 million available for teacher raises.  Don’t you love lawyers.  I hope it is true but having spent some time learning about our state and education employees health insurance plan I am skeptical.  So what better way to spend part of Labor Day weekend than writing about health insurance, one of the many benefits American workers enjoy due to the labor union movement in this country.

First let’s put the $100 million to be available into perspective.  In April of 2013 our statewide large school district CFO group (MABM) met with officials of Oklahoma’s Employee Group Insurance Division of OMES to learn and have dialogue about the impending implementation of the Affordable Care Act.  Here is a link to their presentation that day.  EGID.04042013-rotated  (by the way rotatepdf.net works)  Looking at their website the most recent annual report available is for calendar/plan year 2014 so this 2013 presentation about as up to date as I can easily access.  Look at page 2 and you see that it was a $917 million operation then so surely is somewhat over $1 billion by now.  Notice also on page 5 that this is the program for education employees as well as state workers, including their families and many retirees, in Oklahoma, about 220,000 that year.

So what Dave Bond/OCPA told Oklahomans last week is that replacing those 37 words with 3 new ones will reduce about $1 billion to just about $900 million, about a 10% savings.  Though I’m skeptical, I will be delighted if it is true.  One reason I’m skeptical is shown in this table that I put together using the information I gathered from Sand Springs Public Schools records for the monthly premium cost of this insurance (calendar plan years) since 2003.   FBA Premium History

HB 1567 was signed into law on April 13, 2015 and became effective November 1, 2015; during that year the insurance premium for employees was $499.42 and a premium increase to $515.82 for 2016 was established some time that summer even after EGID knew about HB 1567.  Following the same timing this year the premium for 2017 has been set at $571.04 and is part of every state agency and school district budget for FY 2017.  This increase comes more than a year after the passage of HB 1567 and unfortunately is about the same $100 million except up instead of down.

It appears from the language, and here I’m really making a poorly educated guess, that what HB 1567 will allow EGID to do is to have different deductibles and coinsurance rates within its plans for different procedures and providers.  I don’t live in their world and certainly want the plan to be able to negotiate favorable costs for state and education employees because that is one of the huge benefits of having health insurance, but I just have to be skeptical that there is $100 million savings available so soon after their cost analysis moved premiums by about the same amount upward.  This is why I am awaiting “something special” from Dave Bond and the OCPA.

A couple of final words.  Please look carefully at the Premium History chart I put together.  The OCPA will predictably blame every adverse occurrence in the health insurance world on Obamacare — the Affordable Care Act.  As you can see from the chart the pre-ACA premium experience was worse than the post-ACA premium experience (ACA approved 2009 and gradually implemented thereafter with the personal mandate in place for 2015 I think).  We’ve had challenges with health care cost increases in this country for decades and the reasons are many and complex.  Whether ACA has helped or hurt is a fair question, but if we ask the thousands of Oklahomans who now can get insurance that was previously denied to them they will say it has helped.  And if we ask the states that had the wisdom to accept the Medicaid dollars which Oklahoma foolishly turned down, they have been helped as well.

What is interesting though is that the ACA/Medicaid debate may be a barely relevant sideshow to the real drivers of medical cost increases.  Take a look at this Time Magazine article for an eye opening look at the “free market” that is health care in the United States.  2013,2,26,MedicalCostsDemandAndGreed  More later about the “free market” in health care.

A week later, 9/10/2016 and nothing new received or noticed.

Please note that I have switched the photo from the “Waiting For Dave Bond” post to this one as a hint for its location; and the new photo on that post should be easy for someone out there.  Lunch on me and this weekend thank a union member for your health insurance.