Author: gary-watts@sbcglobal.net

Rodin Museum in Philadelphia. ID’d by Krystal Bonsall.

It seems hardly a day goes by without some headline involving Epic Charter Schools and related misdeeds.  I don’t intend to repeat what has been reported because I assume if you found your way to this post you are enough of a public education nerd to already be familiar with the still unfolding story.  If you want an up-to-date refresher my friend Rick Cobb has recent posts on his site https://okeducationtruths.wordpress.com/ that are a good summary and source.  Instead, I want to describe the legislative and policy failure that set the stage for Epic’s headlines. 

That failure of policy and legislation begins with the woeful lack of understanding about how our state aid formula is supposed to work and the purpose of providing a free public education to all children.  Article 13, Section 1, of the Oklahoma Constitution states:  “The Legislature shall establish and maintain a system of free public schools wherein all the children of the State may be educated.”  That single statement commits our state government to provide services that are the largest single category of expenditure by far of state and local revenues in Oklahoma, now totaling over six billion dollars.

Title 70, Section 10-105, Oklahoma’s truancy law, makes it a crime for parents not to send their children to school.  They “may be educated” in an Oklahoma public school, or not, but they must be educated somewhere.   The provision of a system of free public schools open to all children is for the benefit of the children and society; it is not an entitlement for parents.  I pay more taxes for public schools in Oklahoma than does the average parent.  I do so gladly and willingly because I know that the future strength and stability of our great nation depends on having a well-educated population—it is in my selfish interest to have all children educated.  I do not do so in support of parents who may, or may not, be making good choices for their children.  I do so in support of the professional educators whose mission it is to effectively educate our state’s children.  I expect my state government to spend my money wisely and effectively to finance the actual costs of educating the state’s children, not as some kind of entitlement for their parents or boondoggle for a private for-profit company.

Gary Stanislawski was my state senator.  He became that when reelected in 2012 after Tom Adelson was gerrymandered out of his district following the 2010 census.  Linda and I hosted him at our house one evening in 2013 to meet with some of his new mid-town Tulsa constituents while he was sponsor of the virtual charter school legislation that is responsible for the Epic mess.  I asked him then why they didn’t make provision for soliciting bids or requests for proposals from prospective virtual education providers instead of just paying the same amount per student as a brick and mortar charter school would receive. 

It was like a Venus and Mars conversation.  In my school district CFO mind, also schooled in how state aid formulas are supposed to work by starting with the bottom-line cost to educate a child, we shouldn’t just gift the same amount of money for what is clearly a very different service.  A brick and mortar charter school is not only responsible for each child’s education, but also for their physical safety and well-being while in attendance.  I served as general counsel for more than a decade for two of Tulsa’s charter schools; they worked hard and were quite frugal.  A virtual charter school does not have the same responsibility so why should we simply assume the two, very different, kinds of educational services will cost the same amount? 

Stanislawski, on the other hand, probably just took the state aid formula amount as a given and each child’s, if not each parent’s, entitlement.  In other words, the price/cost was already established so why is Watts even questioning that?  Let’s unpack where I’m coming from.

Oklahoma finances public education through a combination of state and local revenues that mostly come together through our state aid formula.  I’ve posted extensively about this before.  Here is a recent description from the research paper “Understanding the Impact of the Five Lagging Chargeables in Oklahoma’s State Aid Formula and Policy Implications”:

Oklahoma’s formula follows the structure of what is known as a “foundation program”.  The Education Resources Information Center of the Institute of Education Sciences defines foundation programs as:

Systems whereby state funds are used to supplement local or intermediate school district funds for elementary and secondary education — a ‘minimum foundation’ of financial support is usually guaranteed regardless of the local district’s ability to support education.  ( “Foundation Programs.” Education Resources Information Center. Accessed August 6, 2020. https://eric.ed.gov/?qt=foundation+program&ti=Foundation+Programs)

Another source, The Economics and Financing of Education (Johns, Roe L, and Edgar L Morphet. The Economics and Financing of Education: A Systems Approach. 2nd ed. Englewood Cliffs, NJ: Prentice-Hall, 1969), credits development of the foundation program to researchers George D. Strayer and Robert Murray Haig as modified by Paul R. Mort, which is described as consisting of these three steps:

1. Compute the cost of the foundation, or guaranteed, program for each district on the basis of objective measures of educational need.
2. Deduct from the cost of that program the amount that will be available in the district from a required levy on the equalized valuation.
3. Make the difference available to the district from state funds.

     Lastly, the Oklahoma Supreme Court said this about Oklahoma’s formula in Fair School Finance Council, Inc. v. State, 1987 OK 114, “The Foundation Program consists of a certain amount of money per pupil which the Legislature has determined to be necessary to operate a minimum program within a school district.”

     Establishing a foundation program therefore challenges a state legislature that is committed to providing comparably funded public education services for all the state’s students to do three things.  First, determine the cost to each school district for providing the basic education services to its students which will necessarily vary according to the numbers and characteristics of those enrolled.  Second, determine the amount of revenue each district is expected to receive from sources that are outside of the current legislative appropriation process.  Third, subtract the second amount from the first, and pay the difference as state aid to school districts from general state revenues available for appropriation in the current year.

The epic policy failure that is at the heart of all the Epic drama we are experiencing therefore lies with our legislature having failed to properly perform the first step when it enabled full time virtual instruction.  The main culprit I believe was SB 1816 sponsored by then Senator Stanislawski.  The Act amended the Charter Schools Act to provide a mechanism for the State Board of Education, later moved to the Statewide Virtual Charter Board, to sponsor a statewide virtual charter school, which then led to the inception of Epic as a statewide charter school.  I won’t go into what are details about which I’m not fully informed and which are irrelevant to my argument, such as Epic’s precise history, its uniqueness, its previous and current sponsors and much more.  What I’m concerned with is that the Charter Schools Act, as amended, in allowing for virtual charter schools made no distinction in funding for a virtual charter school versus a traditional brick and mortar charter school. 

The current “certain amount of money per pupil which the Legislature has determined to be necessary to operate a minimum program within a school district” is $3,380.89.  However, the Legislature has long recognized that each pupil does not cost the same amount to educate.  Depending on grade level and other characteristics, weights are applied to account for these cost differences.  I show this in more detail in my post Follow the Money, part 2.  An example would be that a fifth grade student, no other countable characteristics, would be weighted at 1.0 and the district should receive $3,380.89 to offset the cost of the student’s education.  But, a kindergarten student (1.5), who is visually handicapped (3.8), bilingual (.25), and economically disadvantaged (.25) would be weighted at 5.8 and the district should receive $19,609.16 for the cost of the student’s education.

The members of the Task Force 2000 whose 1990 Report led to the landmark Oklahoma legislation known as House Bill 1017 well understood the importance of this first step in a foundation program formula.  They recommended, and the final legislation included, a requirement that the State Board of Education review pupil category and grade level weights using the cost accounting system and make recommendations a year later for any revisions.  In other words, determine if the weights in place in fact reflect the actual costs of educating the students in those categories.

Here are just the grade-level weights now in place:

When I was CFO at Sand Springs we were planning for construction of eight new classrooms for early childhood education serving about 160 four-year-olds.  I did a pro forma budget with costs of hiring certified and support staff necessary to meet class size requirements for the new site, estimated utilities, insurance, building and grounds maintenance, etc. to come up with our estimated cost.  We wanted to know if our existing budget/K-12 program would be subsidizing this new, but optional, service.  The result was uncanny how close the estimated costs were to what the increase in state aid (note the 1.3 weight above) and other revenues would be with the additional students.  In other words, the state aid formula worked and the right amount of money was going to be available to pay for the actual costs of educating the new students.

When the weights were put in place the only delivery of educational services to students was at traditional brick and mortar schools.  The weightings clearly take into consideration the class size requirements at younger ages and perhaps greater expenses delivering some high school classes.  There are also expenses for the brick and mortar, transportation, health and other services in-person schools are expected to provide. 

Now along comes virtual education which is both praised and condemned for its radically different method for delivering educational services to students.  Why would we assume the cost of that delivery will be the same as the traditional in-person school?  Maybe it is, but probably it isn’t.  I haven’t studied it, though someone should have BEFORE writing or sponsoring SB 1816 and opening up the public’s purse to pay exactly the same amount for a service that is radically different. 

I know that the cost isn’t the same because even a casual reading of the Epic silliness demonstrates money is being wasted.  The entrepreneurs who started and run the charter school were given a no-bid contract and have paid themselves millions.  There was enough money left over from the Oklahoma services to transfer lots of money to Epic’s California venture.  Teachers are paid huge bonuses, collectively millions, not for teaching, but for recruiting students.  The spending money families are given may be legitimate support of students’ education, or may cross the line to be payments to parents for enrolling, and is suspected of being another conduit for siphoning off profits to the owners.  This kind of silliness doesn’t happen unless the revenue Epic receives simply far exceeds what is needed to educate its students.

A Gary Stanislawski might say that I should chill out because parents must be satisfied because they choose to send their children there and each year more are doing so.  But I say parents are not the consumers—all of us are and we should not be paying more than the actual cost of the services being provided to the students.  We also get a say in whether or not Epic is doing a good job.  If that should be left up to parents alone, then why do we need truancy laws?

This all takes us back to Step One:  determine the cost to a school district or charter school for providing the basic education services to its students through a virtual delivery system rather than in-person.  Then use that information to establish an appropriate Grade Level weight.  Here’s my guess, uneducated, that it would be about 70% of what it costs in-person.  If Epic had received only 70% of the funding that has been shoveled their way the last few years, I bet we wouldn’t be reading the same headlines.

Today, April 16, 2021 we awake to yet another headline about Epic which reports an additional fine of $10.5 million levied by the State Department of Education because Epic has been found to have misspent those additional sums. The total fines so far are about $22 million. As I try to explain above, in addition to holding Epic accountable, policymakers need to correct the underlying cause of these crazy expenditures, namely that the very different educational services Epic purports to provide students do not cost, and are not worth, the same amount of funding required by traditional brick and mortar schools. The actual, reasonable costs of quality virtual education should be determined and an appropriate student weight used in the formula.

As always, lunch/pizza delivery on me for the first to ID the location of the Thinker photo above.

One of my semi-retirement activities has been trying to right the wrong caused initially by the Oklahoma Tax Commission’s error in construing a 2015 amendment to the statute that apportions motor vehicle collections to Oklahoma school districts.  After winning every phase of that litigation and withstanding a silly challenge by overpaid school districts that should know better, it has now morphed into litigation with the Oklahoma State Department of Education that involves understanding the purpose and effect of the foundation aid section of the state aid formula.  Reinforcements arrived this week in the persons of Associate Professor of Economics Matt Hendricks and student John Reaves with the University of Tulsa.  An academic paper we have researched and written together over the last several months is now published online by the Institute for the Study of Education Finance at the University of Oklahoma.  Here it is (if first link is still out of commission, try the next):

http://educationfinance.us/publications/oklahoma-lagging-chargeables-study/http://educationfinance.us/publications/oklahoma-lagging-chargeables-study/

Understanding the Impact of the Five Lagging Chargeables in OK.pdf – Google Drive

Hendricks-Reaves-Watts-Full-Report.pdf (oucreate.com)

As background for the paper and how we got where we are today here are posts I have written:

House Bill 2244

A Turkish de Fright

‘Twas the Night Before Sine Die

Motor Vehicle Collections Litigation Update

Sadly, the analysis required to understand what is going on seems to elude otherwise high functioning school finance personnel.  Here are the posts I have written trying every which way to show the correct analysis. 

My Obsession

Okie Masterminds

Paradise Lost

Nuclear Option

Tables Rock

A Picture Is Worth…(you decide)

“WOLF!” The Oklahoma Tax Commission shorted Tulsa Public Schools $3.4 million of our taxes.

Oklahoma State Department of Education has miscalculated state aid for FY2020 (and plans to do it again next year)

The silliness of school world’s belief that the subsequent year adjustments in state aid corrected the losses caused by the OTC is understood with simple logic:  if you underpay me, I’m not made whole till you over pay me AND you can’t spend the same money twice (first to correct prior year loss and then to pay for current year expenses).  It is also easy to see in the simple tables we’ve used as shown in the “tables rock” post above.  The real data that our paper analyzes demonstrate it also.  And lastly the algebra proves it with skills expected of every Oklahoma high school graduate according to the State Department of Education:

As always a pizza delivery on me for the first to ID the photo location.

One of the advantages of being a Geezer is being excused for certain lapses in memory so I’m going to claim “The secret to happiness is low expectations.” as an original thought I had and espoused well before the dates of attribution that show on search engine results. Originality doesn’t matter, the substance does. When I look back on my life as Geezers often do, I see so many relationships, particularly family, and events that must exceed the expectations of most with whom I’ve shared this planet. So my original thought hasn’t resulted in living a life of mediocrity or disappointment, but it has left me without much of a bucket list (I prefer Jerry Seinfeld’s “$%&!-it” list anyhow).

For example, after my first born Ethan and I scaled Wheeler Peak, the high point of New Mexico in 1987 and Linda found Fifty State Summits, a book by Paul Zumwalt, I embarked on a quest to summit as many as I could, believing a one point that would be somewhere between 45 and 49 since I didn’t plan to die on Denali. I had much fun, usually with Linda, sometimes alone, often with friends, making it to forty with the last being Britton Hill in Florida 25 years later. As life developed and the remaining high points each presented their own special challenges, I realized my goal all along had been to summit 40 of the 50 high points so I’ve not attempted any more. And there it stands, many fun memories and no regret.

When this pandemic began in March I realized the time it afforded at home in the early summer would be perfect to check off the only item on my bucket list–to build a back yard Rube Goldberg machine. The rule I set for myself, which puts more formal competitions to shame, is that a true RGM must be built entirely from stuff you already have, i.e. no new purchases can be made or money spent. My effort was wildly successful, gave me great pleasure over the month or so of construction and testing and quality time with our wonderful family. Below is a link to the YouTube production crafted by my grandson seen here at the Jersey Shore a year ago with his twin sister who was my key grip’s best babe on the project.

Here is the YouTube link. If as when I watched it, you first see our only (not wise to tempt fate) successful run; then followed by I don’t know what will come because I don’t know how You Tube works. Here is another You Tube link to our earlier version which showed areas needing improvement (back yard engineering), again followed by…I don’t know how YouTube works.

Here’s another we produced in honor of friend Betty Coleman’s 90th birthday.

As always lunch is on me for the first to ID the above thinker photo location which shows a feature that, when it was first installed years ago, once was a kind of perpetual RGM itself and was mesmerizing to watch. Alas, it stopped working, though is still nice to see. Lunch can be your fave carryout which you are welcome to consume, or not, on our porch.

• 

• 

That’s the title to the book written by Marty Makary, M. D. who was the speaker at the Fall, 2019 annual whoop de do put on by the Oklahoma Council of Public Affairs.  I heard part of a Rich Fisher interview with Dr. Makary on our Tulsa Public Radio station.  He made much sense describing the insanity that is pricing, billing and paying for health care in our country, much like was done several years ago in A Bitter Pill.  So when I heard at the end he is coming to Oklahoma at the invitation of the OCPA I knew there had to be a catch. 

The danger and joy with Nook books is the ease of acquiring, so later that same day I was quickly reading through to learn the rest of the story—I didn’t.  Here’s what I did learn.  The Price We Pay is a fascinating and effective anecdotal, not analytical, description of much of what is wrong with our health care system.  If you’ve never experienced mishaps like I describe in my post Dennis not the Menace then you are lucky and may not understand what all the fuss is about health care financing in our nation, so read this book.  It will make your blood boil with descriptions of the problem, but won’t give you the answer.  Unless you already have preconceptions, as I do, then you can find it as I did.

I don’t recall if it is his first outrageous example, but around page 22 I made note where a hospital in the United States quotes $150,000 for bypass surgery, then when the potential patient balks at the cost eventually comes down to $25,000.  So the patient goes to France and has it done for $15,000.  If I were Dr. Makary I’d spend a little time investigating how health care is provided and financed in France—but he doesn’t show that curiosity, unless I skipped over it.  What is obvious to many of us, and so eloquently stated by my friend Carlton James (see my post Looking for Mr. James) is apparently lost on Dr. Makary. 

He continues giving example after example of how outrageously silly and harmful our health care system is in so many ways, interspersed with examples of how markets sometimes seem to work, as around page 40 with elective procedures as an example—duh—a medical market virtue I addressed as irrelevant to the broader discussion in my post Spoonful of Sugar.  Which is why I read his description of the Surgery Center of Oklahoma with skepticism expecting that it is all about elective procedures.  I was wrong and it truly appears to be a fascinating outlier, like other providers appearing here and there in The Price We Pay, in our crazy system.  Fair, transparent and market-based pricing still doesn’t obviate the need for insurance coverage—we’re not talking about a $500 car repair bill a modest emergency savings should handle—because few of us can pay out of pocket for child birth $12,000 or a hip replacement $15,000, much less a lumbar fusion, two levels, whatever the heck that is, at $50,000—all prices from the Surgery Center of Oklahoma’s website.

 He visits a hospital administrator in Nebraska that is making money while not playing the game of charging multiples of actual cost then giving insurers huge discounts.  It will discount 4% and that’s it.  Medicare and Medicaid make up a normal part of its business and, unlike the usual whining from hospital administrators and government haters like the OCPA, it doesn’t lose money on those patients.

A favorite chapter of mine is the one on flight ambulances, a notorious source of examples where patients and insurance companies are over charged with the patient (remember they made a rational decision for a flight ambulance to save their life…not) usually holding the bag.  Unless the patient’s health insurance is one of those bad, wasteful government run single payers—Medicare or Medicaid.  He finds they don’t get gouged, so duh???, why not good enough for everyone.  Relying on buyers to check price gouging sellers when the buyers have suffered a traumatic health event and may even be unconscious is just plain silly, if not stupid.  It’s a classic example of the kind of market that should be regulated or controlled by a single payer with enough market clout.

The author at one point compares insurance brokers to the mortgage bundlers/sellers who fueled the subprime mortgage failures that led to the Great Recession of 2008 (doesn’t seem so Great today).  What he doesn’t say or explore is how through government regulation strengthened or kept in place that catastrophe could have been avoided.  So of course he makes no mention of a role for government regulation in cleaning up what bothers him with health insurance brokers.

Toward the end he declares that the diet wars are over, that it has been proven there are no benefits to a low fat diet—say what?  He even blames low fat advocacy for the obesity epidemic—wow, here he lost me.  Just Google up my diet man, Dr. Dean Ornish, if you want my version of the truth.  No, the diet wars are not over and low fat doesn’t cause obesity.

He partially redeems himself by pointing out toward the end that Salk and Sabin refused to make money on the polio vaccine—probably because they recognized the overwhelming public good involved and knew monetizing it would send the wrong market signals.  But the author ends with a call to more transparent and efficient markets and thus ends a book supposedly contributing to the public discussion about health care policy and not once mentions universal health care, single payer or Medicare for all—all ideas and policy proposals that exist specifically because of the broken system he documents so well. 

So it goes; hope the food was good for the fellows of the OCPA last fall. Remember to vote for Medicaid expansion June 30; or if you vote absentee I’ll happily notarize your ballot. As always, a lunch or pizza on me for the first to ID the photo site.

OK, we’ve been watching the Ken Burns documentary, “The Roosevelts”. I intended to resume more regular critiques of the “research” by the limited thinkers at the Oklahoma Council of Public Affairs and have been too distracted to do so till now.  Over the first two and a half years of this blog I posted about 60 times doing just that, which I summarized in Dirty Dozen Data Drivelers over a year ago.   I needed a break as one can only read so much of shoddy research and analysis like that produced by the OCPA without it causing feelings of frustration and despair.  Besides, much of their work during that time was to convince the public and policy makers that teachers should not receive a pay increase.  They failed; teachers received two consecutive years of raises, and the OCPA lost a great deal of relevance. 

While public education remains the greatest responsibility of our state government, not far behind is providing for access to adequate health care for all Oklahomans.  This issue is now front and center as the successful Initiative Petition effort has State Question 802 for Medicaid expansion on the statewide ballot set for June 30. 

The effort gathered more than 300,000 signatures, the most ever in our state.  If approved Oklahoma will join 36 other states in expanding Medicaid coverage to more of its residents, about 200,000, under the federal Affordable Care Act that has been available since 2014 but was prevented by our Republican legislators and governors. 

Here is information about the effort from the Oklahoma Policy Institute—a real think tank, not a stink tank like the OCPA—and from the Yes on 802 support organization.  I have posted several times previously on related matters and believe this is a matter of universal health care being good public policy. The United Nations has proclaimed that universal health care is a human right. 

Around 1965 we decided that our population over age 65 should have health insurance which addressed the market reality that few in that age category could expect coverage in a “market based” model of insurance, i.e. old people are just too costly.  I wonder how many of the geezers and old geezers on the OCPA’s board of directors rant and rave about the “ne’er do wells” of working age not deserving Medicaid coverage, but would also rant and rave if anyone tried to take away their Medicare coverage which in fact is being paid for by many of those “ne’er do wells” they would keep uninsured.

In my opinion, if our nation has the resources to provide insurance for old people who are past their years of real productivity (and if you think we Medicare recipients paid in enough to cover ourselves already, then why is the Medicare fund on the verge of insolvency?), then it has the resources to provide health insurance for those of, or soon to be, working age who are adding to the nation’s production, wealth and the Medicare trust fund.  So it behooves us to invest in the good health and productivity of those who are making it happen, more so than for those of us who are no longer contributing. 

Therefore, I will take a deep breath and, as painful as it will be, start checking out the OCPA’s website again looking particularly for their drivel in opposition to expansion of Medicaid, where they will try to justify the policy decision of our state Republican party to turn its back on over $1 billion the last six years—yes they believe our state, that is already a net taker of federal funds because of its relative poverty compared to our coastal sister states, is rich enough to turn its back on that funding and send money to Washington to fund health insurance for Massachusetts, New York and California…not.  Enjoy and support SQ 802 Medicaid expansion by voting yes on June 30.

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

When I learned recently that my second cousin Ginny took a new job with the Cooper Clinic in the Dallas area, I sent her this message: 

• Ginny,

We heard from your parents and hadn’t understood who your new employer is.  Kenneth Cooper saved my father’s life.  You may have heard this story but I never tire of telling it.  While Clayton and I were away at college and/or starting our lives after college, late ’60s, early 70s, Dad (late forties) was diagnosed with severe heart disease.  He had angina so intense he could not walk around our block.  This was before bypass surgery was done; today it would be a no-brainer.  Fortunately, his cardiologist recommended Cooper’s Aerobics program.  Dad was very disciplined in everything he did so he faithfully followed the program working his way from slow walks to actually running miles at a time.  Linda and I returned to live in Tulsa with our new son Ethan summer of 1973.  Early fall that year, Dad challenged Clayton and me to a “race”.  We went to the high school track and the ground rules were that Dad would run the quarter mile laps without stopping and Clayton and I would run with him by relaying every other lap.  I think we both made 3 or 4 laps before being exhausted and unable to continue, meaning Dad had run 1.5 to 2 miles.  When we could not continue and conceded his victory, he ran one more lap just because.  He made his point; I started that week and now 47 years later can honestly say that I have faithfully and continuously maintained aerobic fitness as recommended by Cooper.  Dad and I ran the first 15K Tulsa Run together in 1978 and a few more after that till he switched to biking.  I ran in every one (or the same distance if out of town) for 30 years.  My 30-year medallion given to all participating that year is with Dad now.  Cooper saved my father from a certain heart attack death; allowed him to enjoy grandchildren and great grandchildren, travel and physical activity for many years, a quality of life not enjoyed by many.  When he finally did have bypass surgery, I think in his early 70s, the surgeon reported that his blockage had been almost total likely for decades and it was the collateral circulation built up through exercise that kept him going.  I tell this story whenever I can, hoping that Dad’s example might inspire someone else as he did me–all because of Kenneth Cooper’s pioneering work.  So, I am proud of your work and the opportunity you and your coworkers have to help other people make a difference in their lives.  I think we may have an early Aerobics paperback–if I find it would you be interested?

Gary 

Here are the three of us at the Hale track after the relay that day:

Here’s her reply:

Hi Gary,

So nice to hear from you! I totally remember that about Uncle Herb. I told Dr. Cooper that afternoon I got hired. I am so proud to be working there. Being the Director of the Nutrition Department there is the cherry on the Sundae of my career. Dr Cooper just celebrated his 89 birthday and he still sees some patients. His son Tyler is an MD MPH and is the President and CEO. 

Thanks for sharing this. There are so many stories like this here! 

Hope you all are doing well! 

Ginny
Me with Dr. Cooper in his office 10/19

Post Script:

Check out my related Post Crybabies which also has my all time fave thinker photo. And what’s with the flying saucer on his wall?

About a year or two into my new training I decided to go to another track and check my time running a mile. I had thought my average time was a little under 8 minutes a mile, so I was shocked–and pleased–when I easily clocked a 6 minute mile at the track. If I just kept training I was sure to be some kind of running phenomenon! The track was at Will Rogers High School where a fellow Hale Rangers Class of 1965 was basketball coach so I called him to report my success as a further reality check. He chuckled over the phone and said, “Gary, it’s a fifth (1/5) of a mile track so it takes five laps to make a mile, not the four you ran.” I was sad when that track was replaced years later with the standard quarter mile version.

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

Yesterday this article appeared in the Tulsa World:

https://www.tulsaworld.com/news/some-see-overkill-in-covid–risk-containment-measures-despite/article_821ae10d-1be7-5a82-a784-37f5282d3b4f.html

It features comments from a blog post on the 1889 Institute’s (an Oklahoma Stink Tank) website by Byron Schlomach.  I am quite familiar with Mr. Schlomach’s sloppy work about which I’ve written before:

Later, Sooner

Double, Double, Toil and Trouble

A Rise By Any Other Name

Not wanting limited thinker Schlomach to spout more drivel unchallenged, I penned this letter to the World’s Editor:

Whether or not closing all state schools for the rest of the school year is good public policy is worthy of thoughtful consideration and debate.  However, beware of listening to Byron Schlomach of the 1889 Institute for reliable information to inform that debate.  In the run up to the Oklahoma Legislature’s  historic vote in 2018 to increase teacher pay, Schlomach argued repeatedly against the increase and supported his arguments by inflating average teacher pay by thousands of dollars and statewide school district expenditures by hundreds of millions.  He also demonstrated he does not know the difference between an arithmetic and a geometric progression—understanding critical to estimating the costs of a pandemic.  I’ll trust the numbers of “well intentioned health experts” any day over those provided by Schlomach.

Stay safe.  I will continue to follow the advice of “well intentioned health experts” and pay little attention to the drivel coming from Stink Tank inhabitants like Schlomach.

A carry out pizza on me for the first to ID the photo location.

Summary

The Oklahoma State Department of Education (“OSDE”) has misconstrued the statutory provision for the calculation of State Aid at Title 70, Section 200.1(D)(1)(b) resulting in an improper reduction of Foundation Aid for 215 school districts statewide that totals $1,606,108 in the current 2020 fiscal year and, if repeated, will reduce their Foundation Aid in the 2021 fiscal year by an additional $19,273,292, for a total loss of $20,879,400 from the state aid they are entitled to receive by law. 

Background

Motor vehicle collections are the third largest source of revenue for the general funds of Oklahoma school districts, and the greatest of the dedicated revenues that are included as Foundation Program income in the calculation of state aid.  The Oklahoma Tax Commission (“OTC”) wrongly construed a 2015 amendment to Title 47 so that motor vehicle collections were underpaid to 271 school districts and overpaid to 146 from August, 2015 through August, 2017. 

After formal requests for the OTC to correct its error were refused, eight underpaid school districts commenced legal action in March and June, 2016 resulting in a December, 2016 order by the District Court of Oklahoma County granting relief to the Plaintiffs only and ordering the correct application of the statute going forward.  The OTC appealed and the Oklahoma Court of Civil Appeals in February, 2018 expanded the order to include all school districts requiring the OTC to recalculate and determine the correct payments that should have been made for collections from July, 2016 through August, 2017 and to “base the apportionment of motor vehicle collections on the recalculated amounts for the July 1, 2016 to August 25, 2017, time period.”  This order was sustained by the Oklahoma Supreme Court in June, 2018 and the OTC completed the recalculations in August, 2018.

Citing the 2017 legislative amendment to the Title 47 apportionment law, effective with August, 2017 collections, the OTC declined to take any further action in response to the order.  Therefore, the Plaintiffs asked the District Court for further relief, over the objection of the OTC, resulting in the November, 2018 order for correcting payments that is now being implemented.  The amounts of overpayments for the 146 districts and underpayments for the 271 districts, totaling $22,797,480.81, are to be corrected over thirteen monthly payments, the first having been made in February, 2018.  An unsuccessful challenge to this order in the Oklahoma Supreme Court by nine overpaid districts delayed the remaining twelve payments which are being made in each month of the current fiscal year, July, 2019 through June, 2020.

Here is a copy of the District Court’s order and citations to each of the legal proceedings.

What OSDE Should Do

The OSDE has incorrectly calculated FY 2020 state aid for each of the underpaid school districts because it has used the incorrect amount of FY 2019 motor vehicle collections in the calculation.  By way of illustration the current 2/10/2020 State Aid Allocation 2019-2020 for Midwest City-Del City school district uses $5,532,047 for Motor Vehicle in calculating the Total Chargeables, thereby resulting in Net Foundation Aid of $22,372,380.  While $5,532,047 is the amount paid to Mid-Del during FY 2019 by OTC, it is not the correct amount to be used as a chargeable because it includes the full amount of the February, 2019 payment of $626,585.09.  That payment was the sum of two calculated amounts:  Mid-Del’s ADA or “per capita” share of the $21,788,638.93 collected by the OTC for apportionment that month pursuant to the provisions of Title 47, being $467,640.70, and its one-thirteenth monthly correcting payment of $158,944.39 as ordered by the District Court to make up for underpayments in FYs 2017 and 2018.   The correct amount that should be used is the $467,640.70, which, thereby, would increase Mid-Del’s state aid by $158,944.39.  OSDE’s incorrect calculation is based on the apparent belief that Mid-Del should not keep the correcting payments ordered by the District Court and upon its mistaken construction of the state aid statute. 

Similar losses in calculated state aid, each in the amount of one-thirteenth of its Court ordered correcting payment, have been suffered by the other 214 underpaid districts receiving net foundation aid and possibly by some of the 56 underpaid school districts receiving no Net Foundation Aid this year.  If OSDE persists with its incorrect calculations and application of the state aid statute, underpaid districts will each lose twelve times as much in FY 2021.  Instead, OSDE should use in the calculation of state aid for all school districts in FY 2020 and FY 2021 the amounts calculated by the OTC pursuant to the current provision for the apportionment of motor vehicle collections in Title 47 in each of the preceding fiscal years before the adjustment is made to each payment as ordered by the District Court to compensate for the underpayments made in FY 2017 and FY 2018.

Here are FYs 2018, 2019 and 2020 Calculation sheets for Mid-Del and data for seven underpaid districts showing OSDE’s error.

OSDE Misunderstands the Purpose and Effect of the Chargeable Amounts

The seven original Plaintiff districts notified OSDE of the correct way to calculate their state aid for FY 2020 by advisory letter to its General Counsel on April 23, 2019 and by formal request to the State Superintendent of Public Instruction on April 29, 2019.  The General Counsel replied on behalf of OSDE to these underpaid districts on June 6, 2019, stating “…the OSDE respectfully declines your request.” 

Also disappointing to read in his letter was this phrase concerning the state aid statute, “… or how monies received (regardless of the mechanism) offset other sources of funding through the formula…”  to which the underpaid districts’ attorney  commented in his reply on June 12, 2019, “I infer, I hope incorrectly, that you are reflecting your agency’s belief that the 271 underpaid school districts were, subsequent to being shorted almost $23 million by the Oklahoma Tax Commission, ‘made whole’ through the state aid formula.  If that is your understanding of the facts, then it makes sense you would construe the statutory scheme to avoid providing a windfall to the 271 underpaid districts at the expense of the 146 that were overpaid.  Is my inference correct that Superintendent Hofmeister believes the losses in motor vehicle collections to my clients caused by the Tax Commission’s wrongful apportionments have been offset by subsequent increases in state aid?”  The underpaid districts have received no written response to that question.

The answer to that question is essential in determining how state aid should be calculated in FY2020 and FY2021.  If it is true, as was alleged by the OTC in opposing the District Court order and by the nine overpaid districts in their unsuccessful Petition to the Oklahoma Supreme Court, and as OSDE may well believe, that the $22.8 million underpaid to 271 and overpaid to 146 districts was fully offset by subsequent year increases and decreases, respectively, in state aid, then it absolutely makes no sense that the underpaid districts should keep the Court ordered correcting payments now being made.  However, thinking this is so, that a subsequent year increase in state aid replaces the shortfall in prior year motor vehicle collections, requires believing that the same money (the subsequent year state aid increase) can be spent twice, first to make up for the prior year shortfall and also to offset the expected subsequent year’s reduced motor vehicle collections.  It is as simple as this, an underpayment cannot be corrected until an overpayment is made.  It cannot be shown in any year since August, 2015 that any of the underpaid districts have been overpaid, except for the court-ordered correcting payments made in February, 2019 and in the current year. Here is a more detailed example using Tulsa Public Schools’ data. Substitute the data for any underpaid school and the result is the same–no compensating overpayments have been received except those ordered by the court.      

The belief that underpaid districts were fully compensated as “…monies received (regardless of the mechanism) offset other sources of funding through the formula…” is false, and was unsupported by either court that considered the argument.  Therefore, it makes sense and is equitable that the all underpaid districts should keep the benefit of the Court ordered correcting payments.

There are three arguments that have been made by those who do not understand the purpose or effect of the five chargeable amounts that are based on preceding year amounts in the calculation of state aid.  Each is presented, analyzed and refuted in this Appendix with these Attachments. 

OSDE Misapplies the State Aid Statute

The amount of motor vehicle collections, which is “division (3)”, to be included in Foundation Program Income (or Chargeables as OSDE refers these revenue sources) is set forth at Title 70, Section 200.1(D)(1)(b) which states, “The items listed in divisions (3), (4), (5), and (6) of this subparagraph shall consist of the amounts actually collected from such sources during the preceding fiscal year calculated on a per capita basis on the unit provided for by law for the distribution of each such revenue.”  As shown above, OSDE in its calculation of FY 2020 state aid for Mid-Del used the total payments to the district for the preceding (2019) fiscal year of $5,532,047, which included the February, 2019 payment amount that is the sum of two calculated numbers. 

One is $467,640.70 which is the amount actually collected from motor vehicle revenues for Mid-Del that month so that it receives an amount based upon the proportion that its average daily attendance bears to the total average daily attendance of those districts entitled to receive the funds, being “a per capita basis”, as provided for the distribution of motor vehicle collections in Section 1104 of Title 47.  The other is the Court ordered correcting payment, one-thirteenth of Mid-Del’s calculated losses from FY 2017 and FY 2018, being $158,944.39.  The first is exactly what the statute describes; the second is not mentioned or described by the statute and should not be included.  The correct entry for the Motor Vehicle Collections amount in the calculation of state aid for Mid-Del in FY 2020 is $5,373,103.  As a further example the correct entries for each of the seven underpaid districts that were Plaintiffs in the successful litigation against the OTC are shown here as already referenced above.  The correct Motor Vehicle amounts to be used in calculating FY 2021 state aid for all underpaid districts are the total amounts paid to each by the OTC in FY 2020 less the Court ordered correcting payments added to each of the twelve monthly distributions. 

If OSDE persists in treating the Court ordered correcting payments in FY 2019 and FY 2020 as revenues “…calculated on a per capita basis on the unit provided for by law for the distribution of each such revenue…”, then the result is that by the end of FY 2021 the districts that were wrongly underpaid, then correctly overpaid to offset their losses, will finally be underpaid again.  That is a result that will be contrary to the legislative intent to provide the same revenues per weighted average daily membership through the state aid formula.  It will also create an absurd result, negating the correction ordered by the District Court and that has been reviewed by the Oklahoma Supreme Court.  Expanded legal argument with case law references is provided in the underpaid districts’ letters also cited earlier.

Gary L. Watts

9187431410 or 9183130558

gary-watts@sbcglobal.net

I first met Jim in the fall of 1973 at Woodrow Wilson Junior High School, in Tulsa, where he would continue teaching history for several years.  His room was near mine on the first floor.  Wilson was part of the recent court-ordered desegregation plan with forced busing of minority students; its sports teams were the Wilson Rebels.  As we became better acquainted I could tell Jim truly had a gift for teaching.   One day I noticed Jim welcoming several African American adults into his classroom and later asked him what he was doing.  He shared that the guests were telling his students their stories about the 1921 Tulsa Race Riot—a lesson in oral history.  As an exclusive product of the Tulsa Public Schools I said in response, “The Tulsa what?”  Like most white children of my generation raised in Tulsa I had never heard of the Race Riot and that day I became one of maybe thousands of Tulsans who learned about it from historian Jim Brown and his guests, many referred by College Hill members Dr. William and Lillian Perry. 

That same year Linda and I found our way to College Hill Presbyterian Church and were pleasantly surprised to find that Jim and Sara were active here.  As much as religion the church became a place where Jim and I and others learned about and discussed current events and politics.  During election seasons Jim organized many adult Sunday School classes around candidates for public office, always inviting both parties.  Congressman James R. Jones attended several and I believe was Jim’s guest during each of his campaigns from 1972 through 1984.  When I decided to run for the Tulsa School Board in 1976 Jim became my first and hardest working volunteer.  The general election was city-wide and Tulsa’s teachers were not happy with the incumbent I tried to unseat, so the campaign galvanized many who had never been involved before.  Though we lost that race many of us, especially the teachers involved like Jim, Elaine Dodd and Connie Koch, caught the political bug and wanted more.  We learned about the upcoming Tulsa County Democratic Party’s presidential nominating convention, and went to our precinct meetings all over the city getting elected as delegates, Jim and I for Fred Harris.  Our plan was to send teachers to the state convention to be part of nominating the Democrat who would run against Gerald Ford in the 1976 election.   The only problem was that Tommy D. Frazier, Mr. Democrat in Tulsa for decades, had a different plan.  As he sat in the back of our caucus room in his wheel chair he signaled his associates before each vote, and however Tommy D. signaled, two-thirds of the room would vote.  We elected no teachers as state delegates that day but Jim, Elaine, Connie and others learned how it worked.  Four years later, in strong partnership with Tommy D. Frasier and having proved themselves as loyal campaign workers in legislative, city and most recently my successful 1980 school board election, Jim Brown and Euna Smith became the first Tulsa teachers we know of to go to a national Democratic convention, held that year at Madison Square Garden in New York City where President Jimmy Carter was nominated to seek re-election.    Jim’s fellow delegates that year included Governor George Nigh, future state superintendent Sandy Garrett, and Tommy D’s younger brother Jim Frasier.  Over the next two decades I ran for election to local offices nine more times, winning all until defeated by Bill LaFortune in our contest to be Mayor of Tulsa.  Jim, and Sara until her death, were active in each one.  I never liked campaigning, but knowing Jim and I would be working together gave me that to look forward to.  Sometime along the way it became apparent to me that Jim and I were supporting the wrong candidate; Jim was the natural people person and that showed in the lopsided vote totals I received from the Florence Park precinct where he and Sara lived and that I couldn’t match with my own neighbors or anywhere else.  I suggested more than once he ought to run for office, but don’t think he ever seriously considered doing so.  Jim also believed in ethical campaigns focused on the issues and not attacking opponents, a standard I tried to live up to and when I fell short once, in our last campaign, he let me know his disappointment.  So President Jimmy Carter, Congressman James R. Jones, State Senators Penny Williams and Tom Adelson, State Representatives Jeannie McDaniel and Mary Easely, Mayor Susan Savage and many, many others were the beneficiaries, as was I, of Jim’s hands on patriotism. Jim and the other teachers in Tulsa during those years made a big difference and their advocacy, including a state-wide walk out, paid off for Oklahoma’s children with the passage of House Bill 1017 in 1990, authored by his state senator Penny Williams, the greatest education reform legislation in our state’s history and an inspiration to Oklahoma teachers in winning their historic pay increase last year.

Our friendship wasn’t all about politics and church.  Among several fun outings like the Woody Guthrie festival in Okema, Byron Berline in Guthrie and couples’ weekends in Pawhuska, our Wildflower weekend stands out.  Around 1990 the four of us got in my new used car, a Honda Accord, standard transmission, and headed to Quartz Mountain State Park and Lodge for a weekend of lectures and field walks to enjoy the amazing wildflowers in bloom that spring and each other’s company.  On our return to Tulsa that Sunday we drove through the Wichita Mountains Wildlife Refuge including a drive to the top of Mt. Scott.  Somewhere west of Oklahoma City, around Newcastle on I-44, the transmission gave out.  Before cell phones when cars broke down you either waited for someone to stop or you went looking.  While Linda and Sara stayed with the car Jim and I headed out to the nearest farm house across a fenced pasture, maybe a quarter mile.  The owners welcomed us and let us use the phone.  While I called a wrecker service and my father to rescue us, Jim engaged in conversation with our good Samaritans and asked them about a framed display on the wall.  It was the Medal of Honor awarded to their son.  I remember little else than that since I was focused on the present and getting us home, but Jim, being Jim, enjoyed a real life experience of military history and honored that hero’s family by listening attentively to their story.  For me that day was inconvenient and stressful; for Jim it was another opportunity to learn, grow and lift others up.

Jim was my best friend and as I say that I know others here today are thinking the same thing, because Jim was a friend to so many–and you could have no better friend than Jim Brown.         

Jim passed away after a hard struggle with skin cancer on April 28, 2019, at home in the loving presence of his wife Ann Franklin and his children Tim and Celia Brown. Three other men shared at Jim’s memorial service in May that he was their best friend.

Not my words, rather an expression our Governor uses I guess to say he’s willing to try some radical stuff to make our state government more efficient.  This post is a follow up to the previous two so won’t make much sense unless you read them first.  I wondered what would happen if the Foundation and Incentive programs were combined, if that would free up much money.  It doesn’t seem to.  I converted Column F of the SDE’s spreadsheet (that I love) to the total $3,592.37 of the two formula factors thus combining the target Foundation and Incentive program revenues together.  Then, keeping the state dedicated revenues at zero, the only chargeable amounts will be the local property taxes.  I moved that total into Column G by combining the amount already there with 20 x the amounts in Column U, I think calculating for each district what the formula says the total of 35 mills will generate. 

For many districts the original amount in Column G equals 15 times the amount in Column U which makes sense at a 15 mill rate, but for most it does not, actually going as high as a bit over 19.  I think, but am not sure, that it has to do with how personal property is assessed in the 77 counties.  Possibly it has to do with assessment ratios, but I don’t think so.  Perhaps someone will enlighten me.

Back to the real story, the end result is a savings of $1.175 million which would shore up the state match for an additional two mills of local option as shown in my last two posts.   Before this exercise there were 24 districts still on the Foundation side of the formula and all those plus 15 more were receiving Incentive aid as well.  This last move, combining the two programs, while not freeing up much additional money reduces the total number of districts “off the formula” from that 39 to 34—the most notable still off being Cushing, Pryor and Stroud, each having their own happy stories of robust local property valuations.  And here’s a real “blow it up” strategy—just put the kids from Moffett on a bus each day to be educated in Pryor.

A Word About Equalizing

Say you have five kids, Ted, Alice, Ben, Sue and Martha from youngest to oldest.  You promise to take them to the amusement park at the end of the month if they do all you ask and save their chore money.  They do so and Ted has $10, Alice $20, Ben $30, Sue $40 and Martha $60.  Since admission and food is the same for all ages you do the math to see if you can supplement their earnings so each has $60 to match Martha by giving $50 to Ted, $40 to Alice, etc., but the total of $140 busts your $100 budget.  You give it more thought and decide Martha is an outlier so perhaps $40 each will do.  You do the math again and find the $60 cost leaves you with $40 to spare.  Being a generous parent you settle on assuring each child has at least $50 to spend which uses up your $100 budget and Martha can just enjoy her extra $10. 

With the SDE spreadsheet working different options for allowing local districts to increase their millage rates, yet maintaining some reasonable equity among all of Oklahoma’s children is easy to do.  What is not easy is to explain why we should turn the clock back on a decades long effort to assure children throughout our state have similar opportunities for a good education.

A Real Blow Up

None of this discussion about fairness is fully accurate unless and until the assessment practices by all 77 elected county assessors are uniform—or maybe ask the question why we even need locally elected county assessors for what is a function essential to assuring statewide delivery of public education.  Here’s an excerpt from my Post One Step Forward, Two Back:

The first by Mike Brake, Official Says Some Assessors Shortchange Schools, Counties, reports on a study done by the Oklahoma County Assessor’s office that looked at valuation practices in 12 of Oklahoma’s 77 counties.    The study finds wide variations in assessment practices that are consistent with the 2013 Equalization Performance Audit commissioned by the State Board of Equalization which found 35 counties out of compliance.  Since the OCPA seems otherwise to be on a tear to greatly increase property tax revenues in Oklahoma as a way to fund public education, a state responsibility, it is a good thing that they take an interest in making sure assessment practices are consistent across all 77 counties.  Simply stated, if assessment practices are allowed to vary widely then the whim of individual assessors will thwart efforts to achieve fairness among taxpayers and adequate funding for schools statewide.  I’ve requested a copy of the Oklahoma County Assessor’s study and may have more to say later.

I never got the copy, don’t know why they wouldn’t respond, but I bet Governor Stitt could get a copy if he really wants to make a difference, i.e. “blow things up.”

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