Governor Stitt was in Tulsa the last week of August for a State of the State address to the Tulsa Regional Chamber of Commerce. His remarks, as reported by the Tulsa World, included that “his administration is looking into letting communities vote for higher property taxes to better fund schools without having the increase offset by the state’s funding formula.” That motivated me to send this letter to the World, published yesterday:
Henry Bellmon, arguably Oklahoma’s greatest education governor, as part of his legacy left us a state aid formula that gives every child in this state access to an education from a local school district that is funded at about the same operational level throughout the state. If Governor Stitt moves forward with allowing school districts to increase local property tax millage as a way to provide new funding for our schools he will need to decide early on if he values all of Oklahoma’s children, or just those who reside in in districts with greater property wealth. Excluding the 2% of students whose school districts are “off the formula” because of local wealth and the 5% attending charter schools that do not receive property taxes, school districts serving the remaining 93% raise $630 million through a 20 mill local levy which must be leveraged in the foundation program part of the formula with $1.24 billion in state revenues to achieve the target equalization. I applaud Governor Stitt for wanting to give local districts more resources, but unless he is willing to add about two state dollars for every local dollar raised he will be telling us that he values a Bixby student twice as much as a Sand Springs student, a student at Wynnewood in Garvin County fifteen times as much as a Bethany student in Oklahoma County, and a student at Peckham in Kay County 150 times as much as a Moffet student in Sequoyah County. That’s no legacy.
The data source of my analysis is the most recent, dated 8/11/2019, from the “Foundation & Salary Calculation Worksheets” on the State Department of Education’s site that, to my shame, I don’t recall finding before and that will likely save me a lot of time in the future when succumbing to My Obsession. The worksheets for each fiscal year, updated as changes are made to state aid, contain all the information from the individual districts’ calculation worksheets. This most current one will be updated at least one more time to capture the new total valuations for levy of property taxes in 2020, so its valuations are for the previous year. Also districts will submit first quarter student membership data that can increase the Weighted Average Daily Membership counts that are used for each district and the statewide total.
I love spreadsheets. They are such a powerful and accessible tool for analysis and an ongoing wonder for those of us who studied mathematics through college using hand calculations and tables (though we could write our own computer programs to analyze data with a 24 hour turn around). So I went to work on the spreadsheet, first creating a new column that is the ratio of column U (Adj. Val. / 1000) to column S (Salary Incent WADM x factor $87.74). School districts have authority under Article 10, Section 9, to levy 35 mills, which used to be differentiated between 15 mills that was fairly automatic and up to an additional 20 mills by annual approval of voters. When the Salary Incentive part of the formula was developed it was intended to encourage districts to levy the full 20 additional mills by increasing state aid for each mill levied. I think now all districts levy the full 20 because that’s how Column W is set up. Column S (times 20) is the amount of funding the legislature wants districts to have through this part of the formula being the total each generates from the 20 mill levy with the difference (Column W) being made up in state aid. Column U is the amount each district can raise with one mill (scaled to 1/20th like Column S).
The result in this new calculation column shows what part of the Salary Incentive target revenue each district can raise from its 20 mill levy. At the bottom is poor Moffett Public Schools in Sequoyah County where its 20 mills will generate only 2.556% of the revenue needed. Actually at the bottom are all of the state’s public charter schools, serving about 5% of weighted students, at 0.0% because they have no authority to levy property taxes. At the top is the Peckham Public School in Kay County where its 20 mills generate 377% of the revenue needed. At 100% or more a district is “off the formula” and our list shows 29 of those that generate all they need and then some for this part of the formula. Those are the 2% I refer to in my letter—based on weighted student counts which are greater than actual numbers, but are in similar proportions among most districts.
Here is how I came up with my $2 of state money for every new $1 from additional millage. If we want perfect equalization we would start with Peckham, but I opted for the Legislature’s standard, meaning the districts that currently receive some Salary Incentive aid and are serving 93% of the students. At the top of that list is the Wynnewood district in Garvin County which generates 96.1% of its Salary Incentive target. Totaling its small amount of aid along with the 470 school districts in between down to Moffett, it takes the $1.24 billion in state aid, together with the $630 million generated by the same districts’ 20 mill levies to keep the formula’s equalization in place. Without reasonable equalization then this offer of allowing local districts to enhance their programs with greater property taxes is a great opportunity for communities high on the ratio scale to step up, but a mostly hollow option for those down the ratio scale. It’s simple math to show that without equalization by the state the good folks in Moffett will need a 37 mills increase in their tax rate to match the per student amount generated in Peckham by only a one mill increase. I hope that’s a hard sell to anyone who cares, as a governor should, about all the children in our state.
Perhaps there are other options not so clearly wrong. What if we only provided equalizing state aid for additional millage up to a ratio of 70% of the Salary Incentive target. Then the cut-off is at Western Heights in Oklahoma County still going down the scale to Moffett and capturing 91.5% of weighted students—not too shabby. An additional mill for each of those 448 districts adds about $30 million and can be “equalized” within that group for about $33 million in state aid, being pretty close to a dollar for dollar return on the state’s new investment. Moving down the scale further to 60% makes Edmond the starting point and the math gets interesting because while 89.3% of weighted students are covered by the equalization it still requires more than a dollar of state aid, even more than at 70% (a 1.15 ratio instead of 1.10), for each local dollar of property tax raised. Pushing down further begins to greatly increase the number a students served by “have not” districts. Regardless of where you land it’s going to take at least a dollar of state aid incentive for each additional dollar likely to be raised with the optional milllage to maintain a semblance of fairness.
To Be Continued.
As always lunch is on me for the first to ID the location of the photo above.