Month: March 2018

My boyhood home across the street from my elementary school.  

The Thinker’s attention was called to a press release from the OCPA of a statement by former Senator Tom Coburn on Monday by which Dr. No fired a warning shot in advance of the Oklahoma House vote on HB 1011 which would cap itemized deductions for Oklahoma taxpayers at $17,000 and thus add $84 million to kitty needed for teacher pay raises.  The good doctor was quite passionate saying, “…politicians have increased income taxes in a back-door manner on multiple occasions by eliminating broadly used deductions…” and that they need to “…make Oklahoma government work better without raising taxes on the most vulnerable, on working Oklahoma families, and on small businesses…”

His plea failed because HB 1011 passed the house and senate this week.  So let’s think about who’s being affected here.  Look at this from the Tax Foundation:

   

If Oklahomans’ itemized deductions follow this same pattern you see clearly that the top three—State & Local Taxes, Interest Paid and Charitable Contributions–dwarf all the others.  Oklahomans can no longer deduct state income taxes, that is one of those “back-door” changes previously made, so the largest component of “State & Local Taxes” for us is our local property taxes which primarily impacts homeowners.  “Charitable Contributions” and “Medical & Dental Expenses” are specifically excluded from the $17,000 cap under HB 1011.  So that makes the “Interest Paid” as the 800-pound gorilla that’s ruining Dr. No’s holiday.

Between the interest paid and local property taxes it seems clear that this burden will fall most heavily on Oklahomans who own real property.  A house in Tulsa County with a market value of $300,000 will cost its homeowner no more than $3,840 in taxes; the mortgage interest each year, at my credit union’s 30 year fixed rate of 4.5%, will decline from a maximum of under $13,500.  Together that’s $17,340 in itemized deductions.  So it seems pretty clear to me that the “most vulnerable” and “working families” affected by HB 1011 for whom Dr. No has such passionate concern are to be found among Oklahomans living in houses worth more than $300,000–or maybe among those who also have a holiday (vacation) home.  I guess if you don’t have a house worth more than $300,000 you aren’t “working” enough, nor can you be “vulnerable” when you have nothing much to lose.

Here’s a very insightful comment from my friend Kevin Berry:

Good points.  Add to this that with the new federal tax changes and the federal standard deduction being raised to $24k for married people filing jointly and the fact that if you don’t itemize on your federal taxes, you can’t itemize on your state taxes,  there won’t be many low income and middle income people itemizing their deductions any longer.   Those low and middle class filers who would still itemize would most likely have medical bills which cause them to, not due to mortgage interest, state taxes or property taxes  Medical bills don’t count toward the state itemized deduction cap.     

Post script:  my thanks to Dr. No for causing me to review my 2017 Oklahoma return finding a $150 error in my favor, and for his daughter Sarah Coburn whose magical voice gave us great pleasure Saturday evening with the Tulsa Symphony.

Also thanks to my friends at http://www.nondoc.com for co-publishing this article.  As always lunch is on me for the first to ID the photo location.

 

St. John Hospital, Tulsa, ID’d by Gini Fox.

A geezer injury has kept this Thinker off the tennis courts since mid-December so using a tennis metaphor in the title helps a little to sooth my frustration.  Trent England penned a community forum Op-Ed piece “Free school districts to pay teachers more” that appeared in the Tulsa World, 3/24/2018, pushing fantasies that I recently debunked (The Bice Is Not Right ) so of course I have to respond.  Trent is Executive Vice President of the Oklahoma Council of Public Affairs and a congenial Limited Thinker  ( Unbelievable! and There You Go Again ) whom I’ve had the pleasure to meet for conversation.  His argument was just another variation on the OCPA’s ongoing theme that there is plenty of money for teacher compensation and raises if school districts could and would make the right choices.  He focuses on the “could” putting forth his belief that legal restrictions on certain funding sources are a major problem.

After pointing out, as the OCPA frequently does, that Catoosa has a nice press box to go with its football stadium, he argues that districts should be able to use the 5 mill building fund levy, one of the “silos” that seem to befuddle Limited Thinkers, for teacher compensation and that would be a big help.  Here’s a letter to the editor I penned trying to explain, again, why it doesn’t:

If your quirky uncle pays $150 directly toward your $600 monthly rent would you argue that if he gave it to you instead you could join a club for $100 a month?  Hopefully not, unless you plan to move where the rent is $500 or less.  But that is the logic used by the World (3/17) and Trent England (3/24) in advocating Building Fund flexibility (SJR 70) as a way to fund teacher pay raises.  Teacher compensation comes from school districts’ general funds which received $4.6 billion in new revenue for FY2016.  Districts expended $570 million to operate and maintain school facilities (think custodians, utilities, light bulbs & property insurance) with $420 million from their general funds and $150 million from the $161 million generated by the five mill building fund levy that SJR would free up to “pay teachers more”.  Allowing districts to use the $150 million for teacher compensation will not allow districts to “pay teachers more”, that is, unless districts lay off enough custodians to free up the funds—and guess who will then be expected to clean their own classrooms.  Once again the Oklahoma Council of Public Affairs offers fantasy instead of facts, and the World buys it.  

If my analogy doesn’t help show why opening up the building fund to be used for teacher compensation is really much ado about nothing, then here’s some actual numbers from a real district, the state’s largest, Oklahoma City.   Keeping in mind that its building fund 5 mill levy generated $10.6 million in 2016, the District expended just under $34 million from its general ($24.8 million) and building ($9.2 million) funds to operate and maintain its district facilities.  That amount is 11.4% of its total new revenue, $297.3 million, which does not seem to be an extravagant portion.

The question then for Trent is how will being able to expend the $10.6 million from the building fund on teacher compensation help the District give pay raises?  If the District wanted to free up $10.6 million for teacher compensation it can already do so by cutting the amount the general fund contributes to the operation and maintenance of its facilities from $24.8 million to $14.2 million; the math is simple.  What is not simple is determining how to properly operate and maintain its facilities with $10.6 million less.  That is fault number one.

Fault number two is that Trent talks about freeing up more local property tax millage to be used for teacher compensation without addressing the huge disparity that exists among Oklahoma school districts in their property valuations per student that, in Trent’s perfect world, would create extremes of “have” and “have not” districts.  This first chart illustrates the problem.  It shows data for four districts with student populations (ADM) near 2000, including Trent’s fave Catoosa, along with Elk City, McCloud and Bethany.   The columns, using the most recent complete FY2016 data, from left to right are:  district name, assessed property valuation per student, number of students, number of teachers, the student/teacher ratio, the new building fund (5 mills) revenue, that revenue amount per teacher, and a teacher raise it supports.

Notice Catoosa, having a valuation per student more than 60% above the state average at $82,259 can generate almost ten times the amount per student as can poor (literally) Bethany with a valuation per student of only $8,500; that’s with the same 5 mills effort by taxpayers in each district.  So if Trent’s fantasy could play out, teachers in Catoosa could see a $4,400 raise while hapless Bethany will struggle to give $600 to its teachers.

While the Building Fund is 5 mills, districts can also vote bonds to generate funds for items as diverse as new schools, repairs to existing schools, school buses, band uniforms, textbooks, electronic hardware and software licenses, and Trent’s beloved press box at Catoosa.  Districts are limited in a way that effectively sets about a 35 mill maximum on the revenue that can be generated.  These funds, when approved by the taxpayers, are distorted in the same way that the building fund levy is, meaning a Catoosa can have a lot of nice stuff, while a Bethany will struggle to provide the basic classrooms needed.

By using bonds districts already have flexibility to relieve their operating budgets by purchasing such things as facilities repairs, technology, student equipment, textbooks, etc. that often are in those operating budgets as well.  If Trent were to do real research he’d probably find a correlation showing districts with higher valuations per student have lower student teacher ratios and higher teacher compensation.  So some of what he advocates already happens, but…  The ”but” is if you understand that our state government and taxpayers are responsible for educating children throughout the state, whether they reside in districts with high valuation ratios or in districts with low valuation ratios, then do you really want to rely on local “flexibility” as the best way to fund teacher compensation?

Teacher compensation comes almost entirely from districts’ general funds which include 35 mills (that’s seven times the amount in the building funds) of local property tax funding.  Additionally, to offset the disparity caused by the huge variations in valuation ratios, state aid is provided to essentially equalize per student funding among districts.  Translated, the more property tax per student a district collects, the less state aid per student it receives.  There are other revenues that are part of the calculation as well, but local property taxes and state aid are the largest.  Look at this chart:

You see, in state aid world fortunes are reversed compared to property tax world, namely the have-nots receive more and the haves receive less, hence Bethany’s state aid per student is more than three times that of Catoosa’s.   So any serious discussion about increasing the use of local property taxes for teacher compensation or other operational purposes must absolutely include discussion on how the wide disparities in property tax capacity among districts will be treated.  If the discussion does not, as is the case with Trent’s commentary, it is not a serious discussion.   But that is nothing new for the OCPA.  Throughout the last two years when teacher compensation has been a top legislative priority they have offered a series of proposals ( see The Glib, The Bad and The Ugly  ) that have all had two things in common, that there is plenty of money already available if districts just prioritized and that if you don’t understand “silos” and other technical or legal stuff, just make up your own facts to suit your conclusion.

It is nice to see that more than three-fourths of our House of Representatives have a better understanding of school finance than the OCPA.

As always, lunch is on me for the first to I D the photo location.

 

 

When I began this blog in June of 2016 my inspiration for using Rodin’s famous “Thinker” sculpture as a theme came from the website address of the Oklahoma Council of Public Affairs, namely www.ocpathink.org.  OCPA is their acronym and “think” I presume they selected because the address www.ocpa.anything was way too expensive (about $10,000 when I checked if memory serves) so adding “think” made it way cheaper and symbolizes their effort to be a real “think tank”, i.e. devoted to policy research and education.  Knowing little about how internet search algorithms work, I selected www.ocpathinker.org thinking people looking for them might find me, because I thought it was funny and it also was cheap.  So my formal title Oklahoma Councilor for Public Accountability, and using Rodin’s Thinker as a visual theme, followed. 

The where in the world is the thinker photos were a natural and I’ve enjoyed having lunch or breakfast with about thirty old and new friends along the way.  Another fun outcome happened spontaneously when friends have sent me photos of actual Rodin Thinkers they’ve seen during their travels.  Here they are:

October, 2017, Sue Haskins sent this photo of Gay Miller from their visit to the Metropolitan Museum of Art in NYC

 

Sherry Durkee sent this photo from her visit to Columbia University in NYC, October, 2017:

 

Patrick Ohlson sent this photo of Jesper Ohlson from their visit to the Nelson-Atkins Museum in Kansas City in October, 2017:

 

March, 2018, Greg Morris sent this photo from his visit to the British Museum in London, England

 

Marianne Boshuizen sent this photo from her visit to the Kyoto National Museum in Kyoto, Japan in October, 2018

 

Fritha Ohlson sent this photo of Sofia and Jesper Ohlson from their visit to Legoland, CA, March, 2018

 

July, 2018 from Houmas Plantation in Louisiana sent by Lloyd and Tresa Snow:

 

I’ve previously shown this photo Linda or I took in Tulsa which I call the “River Thinker”, November, 2014

 

And this I took at the Rufino Tamayo Museum of Pre-Hispanic Art in Oaxaca, Mexico, March 2017

My friend Julius Leach recalls that the Dobie Gillis TV show of the early 60s began each episode with Dobie thinking in front of a Thinker in the city park:

On a road trip through Texas in March, 2019, Linda discovered this lady Thinker in a Galveston cemetery, dated BEFORE Rodin’s Thinker:

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Richard and Sherry Durkee sent this in March, 2019, from the Rodin Museum in Philadelphia, the city where our first child was born:

So I’m adding another offer of lunch for any new “Thinker” sculptures you photograph in your travels.  Also check out my new addition to my January 2017 post “ Close Encounters of the Presidential Kind ”

 

The Thinker has been very distracted lately and now on another road trip collecting photos and new insight, but couldn’t resist a quick and dirty comment on a Tulsa World Editorial: “Proposed constitutional amendment would let schools pay teachers instead of buying buildings. It offers school districts greater flexibility” appearing Saturday, March 17, 2018.  It was about Senate Joint Resolution 70 from Sen. Stephanie Bice, R-Oklahoma City.  Senator Bice is my favorite state senator because she ID’d my thinker photo of the Carousel in Elk City, Oklahoma I used for my post “Same Song, Umpteenth Verse  ”.  My favorite senator used to be my own when she was Penny Williams and later Tom Adelson, but now my senator is Gary Stanislawski who is a nice man who cares little about government efficiency (witness his give-away to virtual charter schools) and has dutifully followed the “cutting taxes increases revenue” script that has decimated our state’s capacity to provide essential services.

          So I’d love it if Senator Bice’s SJR 70 actually was a helpful piece of legislation, but it is not.  If it makes it to the ballot, fine if it passes, but it will be a hollow “victory” for anyone who really wants to make a difference for our state’s teachers.  Here is why.

          Look at the recent Oklahoma Cost Accounting System (OCAS) reports for Oklahoma school districts.  https://sdeweb01.sde.ok.gov/OCAS_Reporting/StateReports.aspx  The most recent showing is for FY 2016-2017 but the State Department of Education has posted incomplete reports because the statewide total shows Function 4000 at $0.00 for each and every fund, meaning no district statewide in FY 2017 spent a single dollar on construction or acquisition of facilities.  I know for a fact that at least one district did.  By contrast in FY 2016 the amount for Function 4000 total expenditures statewide is about $560 million.  So, quite simply, the SDE inexplicably failed to include Function 4000 totals in their posting of FY 2017 OCAS data.

          Looking, then, instead at the last credible year of OCAS data, namely FY 2016, we see that statewide totals for the Building Fund 21 are $186.8 million.  Of that total only $36.9 million is for Function 4000 expenditures which is essentially the only Building Fund use for which school districts cannot also use their General Fund 11.   For that same year $421.2 million was expended statewide from school districts General Funds for Function 2600 purposes, virtually all of which are eligible expenditures with Building Fund moneys.

          Teacher salaries, and hence pay raises, are almost exclusively funded with school districts’ general funds 11, the main exception being Co-Op funds 12.  So it is true the Building Fund 21 cannot be used for teacher compensation.  But if you follow the math above you can see that school districts, with possibly a few exceptions—and I mean very few, already have the ability to shift money between the two.  For example, if the statewide amounts were one district then that district could simply shift $186.8 million of its Function 2600 General Fund expenditures (remember there is over $400 million) to its Building Fund and use those freed up funds for teacher pay raises.  Woopee!

          But, what about the approximately $150 million that the school districts’ Building Funds already expend for purposes, like custodians and utilities, for which the General Fund also is being used.  If school districts are to use that $150 million for teacher compensation, then how is that $150 million of necessary expenditures going to be covered?  The only realistic source is the general fund, but I think you see we’re just re-arranging chairs on the deck of the Titanic.

Translated, there are very few, if any school districts that don’t already have this flexibility, meaning they are paying for custodians, utilities and/or property insurance with general fund moneys that could be freed up by shifting those expenses to their general fund.  Presto, they have more general fund money for teacher compensation—except, how then to pay for the building fund expenditures that were then displaced?

The exception might be to find a school district that expends close to nothing out of its general fund 11 for Function 2600 purposes and a significant part of its building fund 21 for Function 4000 purposes for which its general fund cannot be used.  Perhaps such districts exist, but I suspect, and may take the time to show, that they are very few.   Whoever pitched this to Senator Bice is either unaware of the options available to school districts already, or is a very, very rare bird/district.

We don’t need SJR 70 which will do little if anything for our teachers; we do need a vote to get rid of the 75% requirement that has prevented the majority of our legislators from doing their job.

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