Fouling Our Nest….Egg

As I shared in my initial blog post, “Hello World”, my first substantive introduction to the shoddy “research” done by the limited-thinkers at the Oklahoma Council of Public Affairs was taking the time to analyze their policy paper “Saving Workers’ Retirement” which provided like-minded Oklahoma legislators with their marching orders, namely first “save” the Oklahoma Public Employees Retirement System (OPERS) and then “save” the others, particularly the Oklahoma Teachers Retirement System (OTRS).  Here are direct quotes from the paper:

“Oklahoma must transition into a defined-contribution retirement plan for all new non-hazard duty government employees and teachers….Establish a defined-contribution (DC) plan, effective July 1, 2014, for all new state (OPERS-eligible) employees….Establish a defined-contribution (DC) plan, effective July 1, 2016, for all new teachers and judges.”

The OCPA’s minions got off to a good start in 2014 by passing HB 2630 which, after an unsuccessful court challenge, implemented a defined contribution plan for the vast majority of new state employees in late 2015 (See my October post “A Turkish deFright”).  Now it looks like step two is front and center for the 2017 legislative session with the filing of two bills, HB 1172 that would implement an optional defined contribution plan for new education employees and HB 1162 that would raise the retirement age for new education employees entering the existing defined benefit plan by two years, from 60 to 62 to qualify for an early retirement, otherwise from 65 to 67.  Just like the OCPA’s misnomer “Saving Workers’ Retirement”, the bills’ author Representative McDaniel (not our beloved Jeannie who was termed out) chose deceptive titles “The Retirement Freedom Act of 2017” and “The Pension Protection Act” respectively.

Where the 2014 HB 2630 used the “stick” of abruptly forbidding new state employees from participating in the existing defined benefit pension plan (which is over 93% funded so definitely not in need of “saving”), McDaniel’s bills appear designed to work in tandem as a “carrot” to lure new education employees into a cheaper and likely low-performing defined contribution plan that will not provide retirement security for Oklahoma’s future teachers and school employees.  Apparently it’s not enough to hold teacher pay flat for eight straight years, now they want to remove the one bright spot in teachers’ compensation package—a sound retirement.  In this post and a couple more I will try to explain why these bills are deceptive and not helpful to current and future school employees; bear with me while I drone on and eventually wax eloquent, I hope.

First we need a status report on OTRS.  My initial post linked to this document “Ten Facts” that summarized my thinking about Oklahoma’s public pensions at that time.  I wrote it in 2014 after OTRS had experienced some really positive financial changes, namely the elimination of assumed COLA’s for retirees (Representative McDaniel likely deserves some credit for this), increased employer contributions and superior investment performance.  The two years since, 2015 and 2016 (fiscal years ending June 30) have not been as good but the system is stable and remains on track to full funding in about 20 years.

The 2016 actuarial report specifically shows the funding period has increased from 14 to 23 years, primarily because the board has directed the actuary to assume a 7.5% return on investments, lowered from 8%, going forward.  Unfortunately, after several stellar years of investment performance, even ranking as a top performer nationally, OTRS experienced a bad year with an overall investments loss of 2.2% seemingly driven by substantial losses in its three Limited Partnership (oil and gas I think) investment funds.  A “bad” year, though, is not necessarily an indication of poor management any more than the previous “good” years indicated investment genius on the part of the board.  With defined benefit pension systems it’s always about the long run averages and OTRS remains in a healthy position if current funding streams are kept in place.

Here is a table that summarizes OTRS performance over the last ten years.

Or here for a clearer view:   OTRS 2017

Note there are two entries for 2016, the first in italics for what it would have been if the 8% assumption had been left in place and the last row for what is actually the report’s final numbers for FY 2016.  The two most important numbers to watch, in my opinion, are either AV% or MV% (two ways of determining the funding ratio with around 100% being the eventual goal) and Years, showing how many years it is likely to take the system to reach 100% funding, which should remain under 30 and trend downward.  Again, FY 2016 was not a proud result for OTRS but its fundamentals remain sound and, like OPERS, if left alone does not need “saving” though will take longer.

Now for the nitty gritty that a defined benefit retirement system’s actuarial report reveals to us.  Look again at the table and the entries at the bottom.  For this post let’s focus on 2016 and see what it tells us.  In FY 2016 about $1.020 billion was paid into OTRS by employees (the 7% required contribution), employers (like school districts) and the state (dedicated revenues from sales, income, gross production taxes and other sources).  That amount means that for every $100 of payroll, $24 is paid into OTRS which is indeed a heavy burden.  Of that $24 employees contribute a little under $7, employers a little over $10 and the state a little under $7.  Now here’s the nitty of the gritty, having all the current employees working another year (FY 2016) and earning the total payroll of $4.255 billion adds a little over $445 million to the system’s project cost or liability.  The actuarial term for that is “normal cost” and for OTRS in 2016 (and for the 2017 projection) is 10.47% of payroll.

Now go back to that $100 of payroll we analyzed above.  Again the $100 generates $24 in new revenue to the system, but the normal cost calculation tells us (rounding) that only $10.50 is needed for the additional costs/liability imposed by that new payroll.  Clearly the system needs that $10.50, but what about the other $13.50 (a little under $575 million in total)?  Isn’t that excess?  Yes and no.  It is in excess of what the current year employees’ payroll is going to cost the system, i.e. normal cost, but it is not in excess of what the system needs.  That $13.50 is necessary to pay off the past sins of our elected officials who committed to pay benefits in the future but did not provide sufficient funding to support those promised benefits.  Actuaries call that the Unfunded Actuarial Accrued Liability (UAAL) which for OTRS is a whopping $7.615 billion.  It is legally a debt of the state and, again, current projections are that if the $13.50 is kept in place it will be paid off in 23 years.

Looking again at the $10.50 normal cost, we see that education employees are contributing $7.00, so the cost to employers and the state of the current benefit structure for current employees is only $3.50 for each $100 of payroll.  For newer employees the cost is even less because I think even a limited-thinker should see that employees grandfathered in with the Rule of 80 or the old Rule of 90 are costing more than new employees coming in under the modified Rule of 90 (higher minimum retirement age).  I will come back to this in a later post but two eloquent conclusions for now:

Regardless of how the system may change for new employees going forward, the state (and its employers) is still on the hook for the $13.50 per $100 of payroll ($575 million annually) until the system is fully funded (23 years); and

Providing the current level of benefits promised to new education employees going forward under the current defined benefit system costs less than $10.50 per $100 of payroll ($445 million annually) and $7.00 ($295 million annually) of that is paid by the employees, meaning the cost to employers and the state is only $3.50 per $100 of payroll ($150 million annually).

Now that we have a basic understanding of the current OTRS defined benefit plan’s funding structure, in the next post (“What’s Up Doc?”) we’ll dissect Rep. McDaniel’s “carrot”, so stay tuned but don’t hold your breath.

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

Short and Not the Point

  San Diego Harbor ID’d by Kevin Byrne.  Statue of iconic photo of sailor kissing a nurse in Times Square, New York City on Aug. 14, 1945, V-J Day–always something to think about and remember.

Sometimes I think the OCPA’s heartburn with public education is really that they don’t want an educated electorate so they can feed us all the same silly drivel and their busy readers, like Oklahoma legislators, will swallow without checking.  A recent post by “Contributor” Vicki Alger on January 10, 2017 says this:

Oklahoma’s per-pupil spending is up, student-teacher ratio is flat

According to the latest available data from the National Center for Education Statistics, since 1999 the number of students per teacher in Oklahoma’s public school system has risen from 15.7 to 16.2. Per-pupil spending has risen from $8,624 to $9,728.

Source: National Center for Education Statistics. Real per-pupil expenditures (in 2013-14 dollars) shown include capital outlay and debt service expenditures and are calculated based on average daily attendance.

It is accompanied by this graph, the fairly flat line being the students per teacher ratio over time and the other being the expenditures:

https://nces.ed.gov/programs/digest/current_tables.asp

I doubt that Vicki Alger, who is with a California equivalent of the OCPA, wrote the headline.  The brief text of what she likely did provide says that both data streams, the pupil/teacher ratio and the expenditures per pupil, have risen.  So why does headline say the expenditures are up (deceivingly true) but the pupil/teacher ratio is flat (absolutely false)?  Answer:  whether true or false that is the message the OCPA fellows are hired to proselytize.   The message is that the bloated public education blob has more and more money but it must be wasted because clearly it’s not going to the classroom, i.e. lowering class sizes.

The graph of any data series, no matter how much it varies, will appear flat if you use a large enough scale on the vertical axis.   Here’s where Alger says she got her data.   https://nces.ed.gov/programs/digest/current_tables.asp

When I look at the most recent and earlier tables needed to fill in all the data points, such as the current “Table 208.40. Public elementary and secondary teachers, enrollment, and pupil/teacher ratios, by state or jurisdiction: Selected years, fall 2000 through fall 2013” on the NCES website, I see the entry “15.1”, not “15.7” for 1999 (found in the 2004 “Table 66.  Teachers, enrollment, and pupil/teacher ratios in public elementary and secondary schools, by state or jurisdiction: Fall 1997 to fall 2002”).  We’ll suppose the OCPA is just sloppy and not trying to shave 0.6 off the rise in the pupil/teacher ratio. 

Using the correct data and a more reasonable scaling on the vertical axis the graph now looks like this:

For more readability you can click here for a pdf of my spreadsheet.

PT Ratio 99 to 13 Chart Smaller

Regardless it is clear that the headline statement “student-teacher ratio is flat” is just a flat lie.  From 1999 to 2013 it rose from 15.1 to 16.2, an increase of 7.3%.  From its lowest level, just before the Great Recession and the wholesale decimation of Oklahoma’s tax base as recommended by the OCPA, in 2007 of 13.7 it has increased 18.2% to the 16.2 they characterized as “flat”.  They must believe you and I are limited-thinkers.

I could not find original data on the NCES website that mirrored the “Real per pupil expenditure (in 2013-14 dollars)” shown in Alger’s graph.  The closest current tables I found were Table 236.70

        Current expenditure per pupil in average daily attendance in public elementary and secondary schools, by state or jurisdiction: Selected years, 1969-70 through 2013-14

and Table 236.75

Total and current expenditures per pupil in fall enrollment in public elementary and secondary schools, by function and state or jurisdiction: 2013-14

Alger’s data is based on “total and current expenditures”, using “average daily attendance” instead of enrollment, with amounts adjusted to “2013-14 dollars” for inflation.  None of the current tables I see on the NCES site incorporate all three elements so I’m guessing Alger did some actual work to arrive at her numbers.  What is interesting is that combining all three of these elements together will generate the largest possible amount for each year in the data set.  Students miss school so using average daily attendance which is lower than daily enrollment generates a higher ratio (dividing by a smaller number).  “Total and Current” expenditures adds capital spending into the equation—increasing the numerator makes for a larger ratio.  And finally using “real dollars” means increasing the ratios for past years by the amount of inflation that has since occurred.  Good arguments can be made for these changes, just interesting that each has the effect of making the expenditure per student amounts greater which supports the OCPA narrative that the public education blob is bloated.

Since I couldn’t replicate her numbers I took the easy way out and used current Table 236.70, and its predecessors, to generate the data set that produces a graph very similar to Alger’s expenditure per student, just lower numbers.  Here is the graph and table:

Or click here for a possibly clearer version:  PPExpend 00 to 14 Chart Smaller

The most recent year, 2013-14 at $8,526 appears larger than every earlier year.  However 2009-10 at $8,511 (capturing the early flow of ARRA funding thanks to President Obama and Congress for prioritizing public education in designing the economic stimulus to counter the Great Recession) is a close second and in current dollars, according to (https://www.bls.gov/data/inflation_calculator.htm) an official inflation calculator, would be worth $9,240 in 2013-14. 

Therefore the real message/point of the data from the NCES is that in recent years the pupil/teacher ratio has not remained flat, rather it has increased 18.2%; and expenditures per pupil in current dollars have not increased, but rather have declined by 7.7% from the high point at the beginning of the Great Recession.   That is a not so short and very different point than the OCPA drivel.

As always lunch is on me for the first to identify the location of the photo.  Congrats to Kevin.

Onward to the Past

Or Pooping in the OCPA’s Backyard

   ID’d by John Zachritz                         Saguaro National Park, Tucson, AZ

The impending confirmation hearing on the appointment of Oklahoma Attorney General Scott Pruitt to head the nation’s Environmental Protection Agency reminds me that I promised in my 12/3/2016 post O Regulation! My Regulation! to say more about the SBA study underlying OCPA President Small’s unqualified statement that federal regulations cost US businesses $1.75 trillion annually.  This from my post referring to his post on www.ocpathink.org:

It didn’t take long to find a post on October 14, 2016, “Free Market Friday:  A Simple Truth” by Jonathan Small, President of the OCPA.  He relays “According to a study by the Small Business Administration, federal regulations drain from $1.75 trillion to $2.02 trillion from our economy each year.” 

His statement is supported by the SBA study by Nicole V. Crain and W. Mark Crain commissioned by the Small Business Administration, Office of Advocacy, titled “The Impact of Regulatory Costs on Small Firms” dated September, 2010.  The report does estimate the annual cost of federal regulations at more than $1.75 trillion and that the burden is 36 percent greater on small businesses than on large firms (500 or more employees).  Their estimate of the total cost is broken into four categories:  economic (a catch-all of anti-trust, foreign trade, financial, etc., regulations); environmental (like clean air and clean water); tax compliance (like collection and payment of employment and income taxes); and occupational safety and health and homeland security (like mine safety inspections and airport security).  The largest category, according to their report, is economic so I focused first on it.

Defining and measuring the “costs” of complying with regulations is a challenging exercise that may on the surface appear easy to do.  One experience I had with this was when my employer school district acquired a site for the construction of a new elementary school from the city that had previously been used for the disposal of sludge, i.e. the sewage from housing additions that subsequently were placed on city sewer service.  When it became known that the site may also have been used for the disposal of street sweepings, including manufacturing areas that used heavy metals, the school district was required to incur the expense of having further environmental impact analysis performed.  My best memory is that the analysis led to the inclusion of some mitigation work, i.e. removal of sludge and covering with new dirt, as part of the site preparation prior to construction of the new school.  Those additional expenditures would be included in the costs of complying with federal regulations and increased the cost of the project.  Although we were inconvenienced by the process we recognized that it was needed to assure that a site to be used by children would not cause them to be exposed to heavy metals (think Flint, Michigan today).

While the authors of the SBA study were able to use similar costs aggregated by federal agencies for the last three categories of regulations they found no satisfactory source for the category of economic regulations, again the largest component of the stated $1.75 trillion total.  Instead they kind of backed into it by using what is called regression analysis to produce a model of different countries’ economic output per capita and using the World Bank’s Regulatory Quality Index as an independent variable.  If I followed their logic, and not certain I did, after obtaining a model that accurately predicted economic output per capita for 25 countries, including the United States, with the Regulatory Quality Index explaining 9.4% of each country’s economic output (higher quality means more output) they did a simple proration to conclude that if the United States had a perfect (according to the World Bank) regulatory environment its output would be 8.7% greater—according to their model—and that amounts to $1.24 trillion out of our $14+ trillion economy (2008 dollars).

This sounds really horrible, at least that would be the headline message Mr. Small and the other limited-thinkers at the OCPA would have you take away.  But here’s a couple of thoughts.  First we should learn more about the Regulatory Quality Index before depending on it as a basis for driving our discussion about the merits of federal regulations.  Here’s as far as I got, namely to find this from the World Bank, an “Ease of Doing Business” ranking of 190 countries based on their business friendly regulatory environment, showing the United States ranked number 8 out of 190 (http://www.doingbusiness.org/Rankings).  That certainly generates a very different headline and starting point for discussion than Mr. Small’s lament about $1.75 trillion.

Second we would need to learn more about the limitations of the methodology used by the report’s authors.  At one point in my life, a senior economics student with a minor in mathematics and statistics, I could have taken a crude stab at critiquing the report.  Now doing that would be way out of my league (and far, far beyond any of the “fellows” at the OCPA).  But thinking about it brought back memories of my part time job as a research assistant for two of my economics professors.  They were working with housing quality data from the U. S. Census and attempting to build a regression analysis model with that data (I wish my memory was more specific about their work).  My role was to transfer the data from the Census, and I think other sources, to computer punch cards (we’re talking 1968-1969 here), and then collate those data cards with the punch cards that specified the mathematical calculations for the regression analysis for submission to the university’s mainframe computer for processing.   Usually I would submit a stack of cards in the evening, after making changes/additions as directed by the professors, and then pick up the results the next morning for them to review.

One memory from that experience was a little amusement that the professors’ underlying theories for the model they were seeking to construct would change as they sought the magic combination of independent variables that would yield a statistically significant result, and in turn the basis of a publishable paper which, in the increasingly mathematical world of economics, was what was expected.  That experience makes me wonder about the selection of independent variables (i.e. “fixed broadband subscribers per 100 people”) by the Crains (authors of the report) and their choice of 25 countries (why not 190?); but I’m way out of my league here and will leave that to their peer reviewers.

Another memory was my amazement at how rapidly our nation’s housing quality had improved during the three decades of data available to us.  This excerpt from a recent article captures the underlying change:

The first Census of housing in 1940 labeled 45.4 percent of owner-occupied units as substandard, which was defined as housing which lacked complete plumbing facilities or was dilapidated. This share dropped sharply over the next several decades, falling all the way to 6.1 percent in 1970 according to Clemmer and Simonson’s analysis in a 1983 article in the AREUEA Journal.  (http://housingperspectives.blogspot.com/2013/02/the-return-of-substandard-housing.html)

Most of the “substandard” housing was classified as such because it lacked complete indoor plumbing.  I remember being a little befuddled by that because I knew my father had grown up in a perfectly fine small-town house in Oklahoma with an outhouse in lieu of an indoor bathroom.  To me then that was just different—not substandard like one that was “dilapidated”.  In fact, of our children’s four grandparents–two still alive as were all four to see in this new millennium–three grew up with outhouses and thus in housing that was likely part of that 45.4 percent in 1940.  To me today I quite agree that my father and my in-laws grew up in substandard housing, but no worse for the wear I’d also say, just lots of fun stories to hear about reading the Sears catalog cover to cover, tipping over outhouses on Halloween, and how every boy signed up for a school sport when the new school building included hot showers.

Today I suspect there are few locations in the United States where one could construct a new house without complete indoor plumbing facilities.  The first requirements one would face, if one preferred to have an outhouse, would be local zoning and building code regulations.  If such were not in place where OCPA President Small resides, and I purchased a lot next to his and constructed a house with no indoor plumbing to remove my wastewater, i.e. put an outhouse in the back yard next to his back yard, I suspect he would quickly become a fan of government regulation.  He could regale the local authorities with all kinds of arguments about health, water quality, odor, etc. as reasons why my freedom to choose how I eliminate my wastes and wastewater, imposes costs upon him, his family and our neighbors.  By impinging on my economic freedom, i.e. by passing laws that regulate disposal of my poop, Mr. Small and our neighbors would reap significant benefits.  But now my new house will cost tens of thousands more dollars because I’m required to send my poop and wastewater into a proper disposal system.  Translated if we look at this scenario and only ask is it right for government to impose tens of thousands of dollars of regulatory costs on me, without considering the benefits bestowed on my neighbors, then we are not seeing the full picture.

That is why President Small of the OCPA is a limited-thinker—he only wants you to think of regulations as “draining” production from the economy—without giving any consideration to the benefits received from those regulations.  Fortunately, the authors of the report, the Crains, are not so limited or cynical.  Here is what they say in their report:

Government regulations pervade modern life in America and other nations with few exceptions. Regulations are needed to provide the rules and structure for societies to properly function. This research, while mindful of this fact, does not consider the benefits of federal regulations, but looks at the overall costs imposed by them.  Little stock is taken of the cumulative effects.

By “cumulative effects” they mean comparing the benefits to the costs.  And this also from their report:

This report does not address the benefits of regulation, an important challenge that would be a logical next step toward achieving a rational regulatory system. The annual accounting statements compiled by OMB move toward such a system by presenting partial estimates of benefits as well as costs. This report, thus, should be seen as a building block toward a broader understanding of the costs of regulation, much of which creates important and substantial benefits. Like data on federal budgetary outcomes, the regulatory cost estimates inform the discussion about the balance between public and private sector control over resources. 

When the Arkansas poultry industry was shown to be using the Illinois River as its outhouse next to Oklahoma’s backyard (my attempt at a metaphor for the deterioration of water quality in the Illinois River which when I floated it in the 70’s was clear to the river bottom) former Attorney General Drew Edmondson took action to stop the obvious harm.  Unfortunately, his successor has not shown the same concern.  However hope springs eternal (too bad clean water doesn’t) so perhaps we can rely on Scott Pruitt as head of the EPA to assure that the benefits, not just the costs, of environmental regulations are considered before moving to eliminate or weaken them.  I won’t hold my breath–but perhaps I should, or at least acquire a face mask like many in China’s cities now do.

I conclude by sharing with you a couple of excerpts from the book Progressive Oklahoma, written by my now deceased former colleague at Tulsa Junior College, and as fine a softball second baseman as I was left fielder, Danney Goble.  I used to read these passages to my students at TJC when discussing the economics of government regulations.  Excerpts from Progressive Oklahoma by Dr. Danney Goble

Lunch is on me for the first to identify the location of the photo above, which is not of me pooping but rather avoiding a prickly seat while thinking in one of America’s fine national back yards.

Crybabies

These days when Tulsans hear the term “crybaby” many will think about the bicycle race day of Tulsa Tough that includes an ascent from Riverside Drive up Lawton Ave. (this is the Hill) to 13th Street and back to Riverside on Galveston Ave. 

The same hill, except ascending on Houston Ave., greeted those of us who were early Tulsa Run participants a little over a mile from the finish line.  My father and I were among those who ran the first Tulsa Run in 1978.  We ran together at the same pace for most of the race and passed many who were walking up what we called “Houston Hill”.  For the record, that first year I ran my personal best of the approximately 25 Runs I participated in over the next 30 years till hanging up my shoes after the 30th Run in 2007—also the year my father passed away.   That first year I outpaced my father by only 15 seconds even though he was 25 years my senior.  His example of disciplined cardio training and exercise begun in his late forties, after a diagnosis of nearly fatal angina, inspired me to do the same beginning in my late twenties and continuing today.  After 10 years Houston Hill was retired and the course re-oriented to a gentler ascent along Boulder Ave.

While Houston Hill never made me a crybaby or a walker—I always enjoyed passing many other runners on the Hill—I must confess to being a crybaby about the Electoral College.  Regardless I still read through the gloating messages on the OCPA site, like Jonathan Small’s post on 11/17/2016 “Policymaking Vindication” in which he congratulates the Oklahoma Legislature for rejecting efforts to elect our President by a national majority vote and Trent England’s post on 11/13/2016 “Trump result is a victory for the Electoral College” wherein he makes a tortured argument to rationalize why it is a good thing for our democratic process to have the winner of the popular vote be the loser. 

Then my eyes turned to the Education Policy piece by Greg Forster “Why Government governs Its Schools Wrong (And How to Fix It)”, November 1, 2016.   He offers five recommendations about how to improve “government schools” by improving their governance.  His first recommendation is that school district elections should be held at the same time as presidential elections so that the election of school board members won’t be controlled by the teachers’ unions and others whose interests are primarily financial and selfish.  His point is that when an election is stand-alone only those voters who are really interested in subject of the election will turn out to vote and therefore must be bad for our economy and democracy. 

Having stood for election eleven times (more including primaries) in Tulsa as a candidate for school board and city offices, always on a date well removed from the presidential election, I have some perspective on his proposition.  Most voters in my elections seemed to fall in one of three categories:  they were employees of the school district or the city, they were personally interested as parents, contractors or neighborhood/issue activists, or they were just good citizens who took the time to inform themselves and vote.  Regardless of their primary motivation at least they were making a reasonably informed decision.  Under Mr. Forster’s plan many, if not most, voters would make decisions about our schools and cities as an afterthought, i.e. they would show up to vote for their presidential candidate and find they are also asked to choose among local candidates about whom they’re not informed.  It also would become quite expensive to compete for voters’ attention as a school board or city council candidate when advertising media are dominated by the presidential and other higher profile contests.

More importantly why isn’t it enough for Mr. Forster that every registered voter has had the same opportunity to vote?  I think it is obvious that he is just another crybaby, namely that he doesn’t like the schools run by locally elected school boards so he wants to blame the school board election dates for thwarting what he believes is the true will of the majority, i.e. to get rid of government schools, just like I want to blame the Electoral College for giving us two presidents, out of the five most recent elections, who lost the popular vote.  I’ll believe he is not a crybaby when he also advocates getting rid of midterm elections for all federal and state-wide offices (and while we’re changing the Constitution(s) to do that we can get rid of the Electoral College as well!), because if voting for school boards is important enough to coincide with presidential elections then so too must he want all senators, representatives, governors, etc. to be selected at the same time when maybe at least half of the electorate shows up to vote. 

Election Turnout

In the future I’ll say more about Mr. Forster’s other recommendations, but here’s a comment on this one:   “Transparency is another area of major need, especially in finances. Our government school system is enormous, and almost totally opaque. Its finances are kept in outrageously Byzantine ways. If you doubt it, go try to find out even a simple piece of information, like how much money your state spends per student on special education.”  Mr. Forster, someone connected with the OCPA has created a “Data Tool” using Oklahoma’s OCAS data reported by all school districts to the State Department of Education.  The Tool captures expenditure detail by Function and Object codes.  Oklahoma school district expenditures are also coded by Program code.  The program code for special education expenditures is 239.  The ‘someone” who created the Data Tool can surely provide you with the statewide total for program code 239 expenditures and then show you how to divide by the number of students (all students or special education students, whichever you mean).  That will give you “how much money your state spends per student on special education”.  You don’t have to go to Istanbul, or even Constantinople, for that.

Lunch is on me for the first to identify the location of this blog’s “thinker” photo.

Truer Than Fiction

 May 8, 1990

Monday I attended the swearing-in ceremony for new Tulsa Mayor G T Bynum, City Auditor Criswell and our nine City Councilors.  It brought back memories of the swearing-in ceremony for Mayor Rodger Randle and the first Tulsa City Council on May 8, 1990, implementing the new city charter, overwhelmingly approved by Tulsa voters the year before, that changed city government from a five member City Commission elected at large, to a mayor and city council elected by districts.  My favorite memory from that day was the private lunch attended by just the eleven elected officials—Mayor Randle, Auditor Wood, Councilors Roberts, Hall, DeWitty, Nelson, Hogue, Benjamin, Polishuk, Bartlett and myself.  The event was mostly about developing camaraderie among the group but also to mildly tease the media since we would never again be able to gather together in private without violating the Open Meeting Act. 

Toward the end of the lunch, and not long before the scheduled public event was to commence, Mayor Randle addressed the group and at the end of his remarks proposed that we all agree to participate in a kind of Tontine whereby we would all agree to put in a certain sum of money that would be invested and made available to the last of us to survive, or according to other conditions we may all agree upon.  There was quick consensus that we should pledge to come together again in twenty-five years to see the status of our Tontine, and that Auditor Phil Wood, electing not to participate, would hold and invest the funds.  There was also consensus that all participating would put up their first month’s officeholder salary, being $1,000 for each of us nine councilors. 

At that point Mayor Randle, being a good Democrat who was liberal with other people’s money but conservative with his own, dropped out when he realized his required contribution would be near $6000.  After some discussion about the likelihood that only one of us would still be living in twenty-five years Mayor Randle offered a second criteria that might accelerate the determination of a winner.  Each councilor would make a prediction that the whole group had to agree could happen in the next twenty-five years; and if a councilor’s prediction in fact did happen, then that councilor would be eliminated from receiving the Tontine investment.  It was also agreed that the twenty-fifth anniversary lunch when we would gather again would be paid for by the winner.

Those twenty-five years passed all too quickly and on May 7, 2015 at a luncheon to celebrate the 25th anniversary we had the opportunity to determine if there was a winner of the Tontine.  All current and former elected officials who had served under the Mayor/Council form of government that began in 1990 were invited and most were in attendance.  When the time came to consider the status of the Tontine it fell to me as the Chair of the first City Council, and obviously one of the surviving charter members, to announce the results in council district order:

Council District 1, Rev. B. S. Roberts, respected minister, civil rights leader and a true gentle giant, was deceased;

Council District 2, Darla Hall, lifelong West Tulsan and owner of a successful insurance agency, was deceased;

Council District 3, Dorothy DeWitty, gifted educator, retired school principal and community advocate, was deceased;

Council District 4, Gary Watts, whose prediction was “An African American will be elected President of the United States”, so I was disqualified;

Council District 5, Robert Nelson, small business owner who often displayed his gift for timely humor, was deceased;

Council District 6, James Hogue, attorney who was subsequently elected to a District Judge post, was deceased;

Council District 7, John Benjamin, whose prediction was “It will be legal for two men to marry in the State of Oklahoma”, delivered with a wink in my direction, so he was disqualified;

Council District 8, Richard Polishuk, whose prediction, resisted by the rest of us until we relented due to time constraints, was “The Vice President of the United States will shoot a man in the face and still remain in office”, so he was disqualified;

Council District 9, then current Mayor Dewey Bartlett, whose prediction, made after he consulted Terry Simonson outside our luncheon room, was “The elected officials of the City of Tulsa and County of Tulsa will work harmoniously together for the consolidation and efficiency of all local government services and betterment of the lives of their citizens in the metropolitan Tulsa region”, which clearly has not happened, so he was effectively the last one standing and winner of the Tontine.

However, it then fell to me to inform Dewey Bartlett that our beloved Auditor Phil Wood, who was deceased, in a weak moment during the late 1990s had sought investment advice from then Councilor Sam Roop who recommended he put it all in WorldCom stock.  Therefore, at the conclusion of the 25th Anniversary luncheon, Dewey received no payoff but was given the invoice for the cost of the luncheon.

If you are still reading and still believing, be careful when you start walking—you may find one leg longer than the other.

Lunch is on me if you are the first to identify with some specificity the location of the photo above of the first eleven elected officials under the new city charter.

 

 

 

 

 

O Regulation! My Regulation!

IMAG0071 (1)

I have a little personal story to share about how government regulations have rescued me from my own lapse into limited-thinker status while vacationing this summer and so was determined to link my story to some silliness put out by the Oklahoma Council of Public Affairs.  It didn’t take long to find a post on October 14, 2016, “Free Market Friday:  A Simple Truth” by Jonathan Small, President of the OCPA.  He relays “According to a study by the Small Business Administration, federal regulations drain from $1.75 trillion to $2.02 trillion from our economy each year.”  When I searched for the study here is part of an official statement of clarification about the study that appears on the SBA website, “However, since the latest iteration of the study was released, the findings of the study have been taken out of context and certain theoretical estimates of costs have been presented publicly as verifiable facts.”  Say it isn’t so; surely the President of the OCPA wouldn’t take findings of a government study out of context and present them as verifiable facts.

I can’t wait to read the entire report, something I doubt anyone at the OCPA has done, because they would have noticed the part where the authors say, “This report does not address the benefits of regulation, an important challenge that would be a logical next step toward achieving a rational regulatory system.”  It’s like if Mr. Small told us that Amazon took $5,000 from him on Cyber Monday—shocking that a big bad corporation would rob an individual of his hard earned cash—leaving out the part about the big screen TV, new computer and other gadgets soon to be delivered to his house.  And I bet no sales taxes were collected.  After I read the report I’ll have more to say in a later post.

Now for my story of shame and redemption.  Over the last 35 years Linda and I have enjoyed many interesting travels to all 50 states and a few foreign countries.  Most of our trips involved flying to a destination and then renting a car.  Being a good econ, a rational decision-maker, or as my Italian daughter-in-law describes me, a pidocchioso (Italian slang for “stingy or cheapskate”), I always look for a low cost rental.  Knowing that the comprehensive and collision coverage through my auto insurance, as well as using a credit card that promised the same, would cover any damage to the rental car, I always decline the “full coverage” they try to frighten you into when picking up your car.  Their scare tactics did succeed in making me focus on the part of the routine where you carefully document existing scratches and dents to the vehicle—quite common with the rentals we used.

I’m guessing we have experienced at least 100 rentals over those years, including a couple of broken windows and flat tires, but the only times I paid more than the contract price were once when I returned a car inside the Chicago loop with a mostly empty tank after an out and back day trip to the highpoint of Illinois, then learned the contract estimated gallons used based on miles driven so I bought a couple of tanks at inflated prices, and again when I thought a parking ticket wouldn’t catch up with me in San Diego—lessons learned.

Now for my sad story beginning with our visit to see our son and his sposa in San Diego this past June.  We have usually rented a car when in San Diego, both for convenience and to take side trips to near attractions like Julian and Palm Springs during the work, from a variety of discount agencies like Fox, ACE, Payless, etc.  This visit the best deal was with Payless which we had used often enough that the agent didn’t even press me when I declined the insurance coverage.  This was my first time at the new multi-story shared facility that has replaced the many scattered rental locations near the airport.  I checked in on the first floor then went with the paperwork to the third floor to collect our car.  The attendant there handed me the key and told me the car’s location.  I found the Hyundai Accent, drove to their check-out line for the inspection, and then left.  After a nice week with our children just hanging out close to their house we returned the car to catch our flight, replacing all the fuel we used that week on the way for $13.23 at California prices and paying exactly the amount agreed, $142.95, for the week rental.

Mid July I was checking my Discover card activity online; this is a card I have used regularly, most years as my primary card, since 1987.  The econ in me likes their business model—easy to claim cash back with no overbearing promotion of confusing points, etc.  What I found, in addition to confirming the $142.95 for the rental, were two charges on July 11, more than two weeks after we had left San Diego, by Payless for $55.56 and $472.48.  I called Payless for an explanation.  The manager informed me that my rental car, on the Friday evening before we left on Sunday, had been identified by FasTrak, California’s equivalent of PikePass, for violating a 75 cents toll outside of San Francisco.  I informed them that there must be some obvious mistake because we had driven less than 150 miles total and never left San Diego with the car.  I asked for the documentation they had and, remembering their check-out procedure, asked that they review their records to see if they had our vehicle’s paperwork switched with a different Hyundai Accent.

After that unpleasant phone conversation I immediately went online to dispute both transactions.  The $55.56 was for their “administrative cost” in handling the notice of the toll violation.  The $472.48 was an assessment for miles driven outside the rental area of Southern California.  I had not paid attention to that or to the 150 miles per day (1050 total) restrictions because we were not going to drive much and were staying in the city.  If the car was driven outside Southern California the contract provided that all miles driven would be assessed at 35 cents per mile.  Their version of the final contract showed the car driven 1101 miles, 51 in excess of the allowed miles, and not enough to support $472.48 at 35 cents per mile.  They never explained how the amount was calculated or why I wasn’t charged for the 51 excess miles when I returned the car.

IMAG0054  Me and the car at the base of Mount Soledad

The disputes I filed with Discover were pursuant to the Fair Credit Billing Act and attendant regulations of the Federal Trade Commission which is responsible for its enforcement.  Upon filing the disputes, the two charges were immediately credited back to my account pending investigation of the matter.  I submitted what documents I could find:  the gas purchase receipt and a Friday evening restaurant meal signed receipt, both with my Discover card, the photo above of our car which was blue contrary to the contract which said gray, and my Friday golf green fee receipt; and offered eye witness testimony from the four of us that the car never left San Diego.

The Discover representatives said none of that was relevant; all they could consider was the contract with my signature and the same tag number as the car that violated the toll.  But, I argued, if the problem began because Payless gave me the keys to the wrong Hyundai Accent there is no way I can prove otherwise if all you consider is the contract that identifies the wrong car.  My lawyer brain spun several times over the realization that eyewitness testimony has been accepted for over two hundred years in this country to send people to prison and their deaths, too many times in error, but Discover would not consider it concerning a $525 billing dispute.

The two charges were then re-posted to my account and I was left to consider my options.  One was to sue Payless but the venue would be San Diego County and, even though my son is a lawyer, the expense of travel, cost of litigation and time involved are all reasons not to do that and reasons why the Fair Credit Billing Act was enacted to regulate resolution of these kinds of disputes where the consumer otherwise has little practical recourse.  Another was to let Discover try to collect from me, an option that would probably work for someone like me who could withstand the little damage it would do to my credit rating because I have no need to borrow money and already have other credit cards to use for convenience.  I chose the latter but also decided to avail myself of one more regulatory option—the Consumer Financial Protection Bureau that is one legacy of the Great Recession.

I went on the CFPB website and filed a complaint against Discover for failing to conduct a “reasonable investigation” concerning my dispute with Payless as required by the Fair Credit Billing Act.  That resulted in both charges being reversed again pending investigation of my CFPB complaint by Discover’s “executive offices” which also gave me a single point of contact with Discover.  I don’t know if this new investigation would have yielded a different result because at this same time something completely different happened—I got notice from FasTrak that the 75 cents was still due.

I had wrongly assumed that part of the $55.56 was 75 cents that Payless paid to FasTrak to clear the toll violation.  While pondering my response to FasTrak, I noticed something huge—the car tag on the Payless contract and FasTrak notice is 7E JE933, but the photo image used by FasTrak shows 7F JE933.  I filed an online dispute with FasTrak about that discrepancy (when I pointed this out to Discover they said the photo was not clear) and about two weeks later FasTrak expunged the violation.  I provided copies of the expunging email to both Discover and Payless because this unpaid toll was their “proof” the car I rented from Payless was driven outside of the permitted area.  I heard nothing from Payless but, about four and a half months after this all began, received notification from Discover that both charges were removed.

Without the FCBA and the CFPB I would probably be waiting for Discover to sue me or, a choice most consumers would not have, using my parental influence to have my son sue Payless in San Diego.  But what about the huge cost to our economy that worries Mr. Small and the OCPA?  The regulations are a burden or cost to Discover.  Revenue to pay that burden comes from merchants, like Payless, who give Discover a percentage of the transactions it processes.  Standard business practice among rental car companies encourages customers to use a credit card rather than cash or debit card for the simple reason that it offers easy protection, up to the customer’s credit limit, for damage to the rental car.  Seems one could almost argue that the regulatory environment works to the advantage of the rental companies, as well as consumers, by providing each with protections around a transaction that is fraught with risk.

It’s like Amazon taking that money from Mr. Small on Cyber Monday—he’s not complaining because he got value in exchange.  Maybe Discover would like to do away with the FCBA and the CFPB, but Discover passes the regulatory cost on to Payless that in turn passes it on to its customers who in turn should be damn glad to have the protections that facilitate commerce throughout our country which benefits Discover and Payless as well.  And when you rent a car confirm the license plate because it could be different than what is on your contract.

Lunch is on me if you are the first to ID the location of the top photo.  In honor of Jonathan Small and the OCPA a clue is the word Liberty.

 

 

The Glib, The Bad and The Ugly

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Now that State Question 779 has failed there is a lot of talk about a teacher pay raise being front and center in the upcoming legislative session.  That is a good thing but is also a real challenge in face of yet another looming revenue shortfall, a state constitution that requires a three-fourths majority in both houses to increase revenue (thanks to SQ 640 enacted as revenge for House Bill 1017; see my 9/5/2016 post “Once Upon A Time”), and a legislature populated with limited-thinkers who have systematically slashed our state’s tax base believing that would somehow fix all of our problems.  I wish the legislature success; we need to take care of our teachers.  It will take bold action and big ideas to get it done.  One place the legislature should NOT look to for big ideas to fund a teacher pay raise is the Oklahoma Council of Public Affairs.  In prior posts I have analyzed and critiqued three of their big ideas which I call the Glib, the Bad and the Ugly. 

The Glib is for the proposal by Dave Bond, CEO of OCPA Impact, whatever that may be, which I addressed over three posts:  8/31/2016 Waiting for Dave Bond, 9/3/2016 Something Special, and 10/4/2016 Done Waiting for Mr. Bond.  The applicable definition of “glib” is “said or done too easily or carelessly; showing little preparation or thought”.   In summary Dave Bond appeared on statewide television, KOTV’s two-hour special program “Educate Oklahoma” and told Scott Thompson and us that due to recent legislation $100 million in savings on employee health insurance would soon be available for teacher pay raises.  Upon examination of the legislation the $100 million he promised is available simply vanished into his own glibness and, I presume, his ignorance of state employee health insurance reality.  So forget about advice from limited-thinker Dave Bond who just makes stuff up.

The Bad is for the proposal by Steve Anderson, OCPA Research Fellow, in his post “Why Are School Districts Sitting On So Much Cash?”, which I addressed over two posts:  8/10/2016 Where to Begin? and 8/11/2016 Paradox of Thrift.  The applicable definition of “bad” is “of poor quality; inferior or defective”.  Mr. Anderson’s illuminating “research” consisted of spending a little time on the State Department of Education’s website and totaling up all the June 30 cash balances for Oklahoma school districts at $1.9 billion.  The clear message from Anderson to limited thinkers in the legislature is there is plenty of money already available for teacher pay raises or any other education priority so quit thinking about it and just do it.  As I point out in my posts if Mr. Anderson would do real research, instead of just reporting simple arithmetic, he would understand that on June 30 each year school districts are contractually obligated for most of their teachers’ salaries for the ensuing fiscal year but are not required to “encumber” those amounts due to a constitutional exemption and State Department of Education accounting standards.  If these amounts were encumbered on June 30 then I suspect all of the “unencumbered cash” Mr. Anderson reports is available would disappear from school districts’ general fund balances.  The “unencumbered cash” in other funds cannot lawfully be used for teacher salaries and, even if fund balances are available, using one-time funding for annually recurring expenditure increases is not smart budgeting (for example, just because you have $500 in the bank to cover the first month’s rent increase doesn’t mean you can upgrade to a new apartment where the monthly rent is $500 more than you currently pay).  So forget about advice from limited-thinker Steve Anderson whose “research” is so defective it does not provide useful information upon which to develop financial policy.

The Ugly is for the reports by Benjamin Scafidi referenced by OCPA Senior Vice President Brandon Dutcher in a couple of blog posts which I addressed in my posts on 9/5/2016 Once Upon A Time, 10/11/2016 A Dirge for a Surge and 10/25/2016 Purging the Surge.  The applicable definitions of “ugly” are “frightful, dire”; and “likely to cause inconvenience or discomfort”.   Mr. Scafidi’s research documents that the increase in public school district employees across the country over the past 50+ years has greatly outpaced the increase in the number of students.  Further it documents that the increase in the number of “Administrators and other Non-Teaching Staff” has outpaced the increase in the number of teachers.  This leads Scafidi and Dutcher to the conclusion, duh, that if school districts will simply lay off enough non-teaching personnel that will free up funding for a teacher pay raise.  Unlike Mr. Bond’s fictional $100 million and using Mr. Anderson’s exaggerated one-time cash fund for recurring expenditures, the Scafidi/Dutcher plan can actually work.  Of course their plan at the outset understates the numbers of “Administrators and other Non-Teaching Staff” that will need to be laid off and they have not shared what actual work that is done by these school employees that should be eliminated or shifted to other personnel (teachers, get ready to drive buses and clean your classrooms).  The clear implication by leading with “Administrators” is that the growth in “administration” is where the waste is.   My educated guess is real research would demonstrate that even if you eliminate every non-mandated certified administrative position (picture a 1000 student high school with no assistant principal) AND paid the remaining certified administrators off the teacher pay scale in Oklahoma, there still would not be adequate funding available for a $5,000 teacher pay raise.  So let’s see the legislature do the hard work to determine that students living within 3 miles of their school will no longer have bus transportation, that early childhood programs will have classes of 20+ students without any teacher assistants and that school classrooms will not be cleaned daily unless the teacher does it.  It can work but it will be dire, discomforting or inconvenient at best.

Lunch is on me if you are the first to identify the location of the photo above.

 

 

 

     

Purging the Surge

imag0166  Fort Mackinac, Mackinac Island, MI

Actually I am not sure what this title means except that I hope to clean up some of the possible misinformation coming from Benjamin Scafidi’s work that is heavily cited by the OCPA.  I tackled his Surge 1 in my October 17, 2016 “Dirge for a Surge” so now will tackle his Surge 2.  This work built on the first by providing state by state information; specifically, he points out that from FY 1992 to FY 2009 Oklahoma’s “Change in Students” was 10% compared to a “Change in Administrators and other Non-Teaching Staff” of 28%.  His source is the U S Dept of Ed’s National Center for Education Statistics.  He goes on to do the math that at $40,000 each, if the growth in administrators and other non-teaching staff had only been 10%, then there would have been enough funding, about $230,000,000 each year, for teachers to get a $5,000 pay raise.

My critique of Surge 1 was that using the terminology “Administrators and Other Non-Teaching Staff” was intentional on his part to lead the reader to believe that the primary growth has been in administrators when I suspect it has been among the major support personnel categories of teacher assistants, food service workers, bus drivers, etc.  I argued that unless you pinpoint what job categories make up the growth and examine what laws, policies, and other factors have caused the increases, his Surge research merely crunches numbers without providing thoughtful policy direction.  I also disputed his use, which I think was in the spring presentation to OCPA, of $50,000 per non-teaching employee to come up with a $7,000 raise for teachers (lay off TA’s, bus drivers and food service workers and give teachers a raise!).  He uses $40,000 in Surge 2. 

Others have critiqued his work for similar reasons.  At the end of Surge 2 is his rendition of five categories of critiques that he received, it’s supposedly an academic paper, and his responses.

To put more of a face on this data, which deserves consideration by policy-makers, I tallied the current full time staff, numbering 603, at Sand Springs Public Schools by general job category.  Here’s the list:

317 Teachers (includes all certified personnel defined as teachers by law and OCAS coding, i.e. classroom teachers, counselors, therapists, nurses, librarians, etc.)                 

286 Administrators and Non-Teaching Personnel, specifically:

27 Administrators (serving 11 separate instructional sites)

82 Teacher Assistants (in the classroom)                                     

54 Food Service Workers                                                                 

36 Bus Drivers                                                                          

35 Building Custodians                                                                      

32 Office Workers (school sites and central administration)              

12 Maintenance, Warehouse and Mechanics  

4 Information Technology

4 Security Guards                

The total of the “bad” employees is 286; less than 10% of that number are administrators.  Why does Scafidi lead off that category with Administrators unless he is trying to bias the reader?

Most of these support personnel are employed only when students are in school, like teachers, on 180 day contracts.  While their hourly wages may be competitive in the marketplace, their total compensation is reduced significantly as a result.  If Scafidi would do the work he would find, at least in Oklahoma, that support personnel compensation (I mean total cost) is likely more in the range of $25,000, not $40,000.  Throw in 10% of administrators at $75,000 each and you end up with an average of $30,000, well under his $40,000 figure he uses to say we could give teachers the $5,000 raise.

Still it would be something.  Yet another way to look at this, using SDE Annual Report numbers shows ADA grew from 1992 at 556,608 to 603,409, an 8.4% increase (Scafidi’s figure is 10%) while “certified staff” (not FTE) increased from 44,164 to 52,167, an 18.1% increase.  This seems consistent with his central thesis that more and more adults are not getting the job done, if you believe the job is not getting done.  It also says that the student to certified staffing ratio fell from 12.6 to 11.6 over that 17-year period—should we expect that to be a game-changer?

In an earlier blog post I point out that part of the HB 1017 reforms of the early 90s was to expand early childhood education, which requires teacher assistants, and to lower class sizes, for which teacher assistants can be used as a safety valve.  If policy makers think there are too many adults, don’t whine about it, do the hard work and tell school districts what services to reduce, like school meals that are mostly paid for with federal funds that would disappear with the workers, early childhood education, or maybe convenient school bus service that working parents rely on.

Remember lunch is on me if you identify the photo location.  ID’d by Gretchen Hannefield.

    

A Turkish de Fright

imag0148  Wisconsin State Capitol in Madison

My experiences with Oklahoma charter schools began the first year (2000 I think) that charters were granted when, as an attorney with the Riggs Abney firm, I began providing services to Dove Science Academy.  For several years working with successive executive directors/principals who were immigrants from Turkey I just thought these leaders were clever men who had found a way to make a living and stay in the United States after completing their college education at places like Oklahoma State.  Some years into my work with Dove Science Academy I became aware of the fact that Dove was part of a loose network of schools, including the Harmony charter schools in Texas, that were inspired by the work of a Turkish cleric named Fethullah Gulen.  Nothing I learned caused me any concern, rather it made me curious to learn more about him when I could find the time.  All my interactions with the leadership of Dove, and later Discovery Schools of Tulsa, were with men and women who were wholly committed to educating the children of Tulsa parents who chose to send them to these charter schools.  I ended my legal representation of Dove, Discovery and another charter school in 2013 partly to free up more time for other activities, including learning more about the Gulen Movement or Hizmet as it is also called. 

Last Thursday Linda and I attended a lecture “Turkey Democracy in Peril” given by Dr. James C. Harrington, founder of the Texas Civil Rights Project, and hosted by The Dialogue Institute, a part of the Gulen Movement.  The President of Turkey Tayyip Erdogan has blamed the Gulen Movement for the unsuccessful and violent coup attempt in July, which the Movement has denied.  President Erdogan has also demanded the extradition of Fethullah Gulen back to Turkey from Pennsylvania where he has been in self-imposed exile since 1999; to date the U. S. Government has insisted that Turkey must show proof that Gulen was involved in the coup attempt and is following the standards of American due process that protect legal residents as well as citizens in our country.  In the aftermath of the coup attempt thousands of police, teachers, military and even judges who are suspected of being Gulen Movement sympathizers have been removed from their jobs and in some cases even jailed.  If you are interested in all of this I encourage you to look at websites connected to the Gulen Movement and also to read the October 17, 2016 New Yorker article “The Thirty-Year Coup”.

The following day, Friday the 14th, I was in the courtroom of Oklahoma County District Judge Patricia Parrish to participate in a hearing on motions filed by both sides in the OTC Motor Vehicle Collections lawsuit I described in my 6/22/2016 Post “HB 2244”.  It was a pleasure to watch Judge Parrish work through her motion docket; she was well-prepared and respectful of all parties.  I couldn’t help but reflect on how valuable it is to all of us, and especially for those who have enjoyed the greatest economic success in our country, to have matters of controversy decided by judges who generally are unbiased and committed to fair treatment of all parties, even the least among us.  Unlike the remaining judges in Turkey who have not lost their positions for being supposed Gulen sympathizers, I doubt that Judge Parrish had any concern Friday that her decisions, or private beliefs, could cause her to lose her job the following week.  She ruled in favor of the eight plaintiff districts; I will post more documents on my “HB 2244” post and you can go to this link to see as well:  http://www.oscn.net/dockets/GetCaseInformation.aspx?db=oklahoma&number=CV-2016-1249

Saying nice things about a judiciary that just decided a case in favor of my clients may seem a little gratuitous, however it was not a fully successful week.  It had also been my pleasure early on to collaborate with the attorneys who represented the plaintiffs on behalf of the coalition Keeping Oklahoma’s Promises in litigation challenging the 2014 Legislature’s HB 2630 that places all new state workers into a defined contribution plan and phases out over time the defined benefit plan for state workers referred to as OPERS.  The plaintiffs alleged that the legislature had ignored its own law, the Oklahoma Pension Legislation Actuarial Analysis Act (OPLAAA), that requires a two-year process and serious actuarial analysis before making such a significant change to an Oklahoma pension plan.  The defendants maintained, and the Oklahoma Supreme Court agreed, that the Legislature, as a body, doesn’t have to follow its own laws.  You can read for yourself here:  http://www.oscn.net/dockets/GetCaseInformation.aspx?db=appellate&number=SD-114676&cmid=118391

Though obviously frustrating it is a fair decision and all the nice things I say above about Judge Parrish apply as well to our state supreme court.  The decision does not say that moving state workers to a defined contribution system is a good thing, rather it, not so simply, says that it is the Legislature’s choice.  For the reasons I point out in my August 24, 2016 Post “Lies, Damned Lies and Statistics” the Legislature made a bad choice.  It’s not that moving workers to a defined contribution system is bad in and of itself, rather by moving them away from a collective/group plan that has lower costs and higher investment yields they have assured that Oklahoma’s taxpayers will get less bang for our bucks invested in state workers’ retirement which remains an important means of recruiting quality employees to do the important work we expect from our state government.  The beneficiaries of the Legislature’s action are the local financial planners (some who are legislators) and Wall Street firms that will reap more fees and commissions from state workers who are now left to figure it all out on their own.

If the Legislature in 2014 had, in good faith and of its own volition, followed OPLAAA then it would have informed itself about the perils I discuss in “Lies, Damned Lies and Statistics” and perhaps it would have moved to a hybrid defined contribution plan that would retain the benefits to taxpayers and workers of being big and perpetual.  But it did not and instead it followed the simplistic game plan handed to them by the limited thinkers at OCPA.  See my first Post “Hello World” from June 20, 2016.

Cindy Kerr ID’d the photo.

 

    

A Dirge for a Surge

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Some weeks ago I promised to take a closer look at the work by Benjamin Scafidi with the Education Economics Center at Kennesaw State University in Georgia that was referenced in OCPA blogs on August 31 and March 4, 2016 by Brandon Dutcher.  You can find the Scafidi work by searching “The School Staffing Surge”—there are two reports and I’ve only looked at the first dated October 2012.

His reports document that over recent decades, going back to 1950, the growth in student population has been dwarfed by the growth in the numbers of teachers and even more so by the growth in the numbers of “Administrators and Other Staff”.  Those were the categories he referenced in his presentation to the OCPA last spring but I thought surely his academic work would show more detail.  It doesn’t.

That fact alone betrays Scafidi as something other than an academic scholar; rather he is in good company with the other limited thinkers at OCPA so likely they will tout his work again and again in the future.  The clear message he intended, probably before even starting his “research” was to produce a marketable piece showing how there’s plenty of money for teacher raises if only school districts would get rid of administrators (note how his category description is Administrators and Other Staff).

Having said that, the Surge in adult employment in our public school system certainly merits research and understanding.  However, throughout his first report the only external factor he refers to, and argues is not the cause, is No Child Left Behind.  What he doesn’t discuss is what makes up that “Other Staff”.

I’ll share exact numbers/percentages in the future about the Sand Springs Public Schools (will be interesting to check my memory), but here is the gist of what it will show.  During my ten years as its CFO the district employed between 600 and 650 full time employees.  The largest work group was certified teachers being about 350 I think; this number includes counselors, media specialists, nurses, etc. as defined in state law.  The second largest was classroom teacher assistants being about 100—that’s adults working with students assisting with classroom instruction Mr. Scafidi.  Then we had no more than 150 divided among three other work groups:  bus drivers, child nutrition workers, and maintenance and custodial personnel.  Administrators totaled about 25.

I was an elementary school student through most of the 1950’s in Tulsa.  I remember very large class sizes, especially library and gym class.  Breakfast was not served and seemed like more of us packed a lunch.  I never rode a school bus till I became an administrator at Sand Springs.  There were no students with disabilities in my schools and Kindergarten was half day—no four-year-old classes.

Without looking at each service now mandated for our public schools and the staff required to provide each service we can’t begin to understand why the overall numbers have increased.  Scafidi’s work poses a useful question, while implying an uninformed solution–get rid of all the unnecessary administrators.  As you can see from my estimates for Sand Springs, assuming a longitudinal look at its data would be similar to Scafidi’s numbers, getting rid of all administrators would not affect the trends appreciably.  The growth in “Other Staff”, the people who wipe noses, show flash cards, move children in their wheelchairs, clean the buildings at night, count the football game receipts, drive children safely to school, maintain the wifi, cook and serve meals, and other work needed to operate schools as expected and required, is what has given Scafidi and Dutcher their heartburn.  At least I’d be willing to bet my next state income tax cut that’s what real research would show.

If policy makers had that information, then we could thoughtfully consider our priorities for what we should expect of our public schools.  But no, that’s not why Scafidi and Dutcher are paid, to help improve government services; rather their mission is simply to bash anything government regardless of its value or service to our economy and democracy.  It’s a lot easier to do “research” when you already know your results.

More to come.  And as always lunch on me if you are the first to identify the photo location (in honor of our Presidential Election season).