Wednesday, July 1, 2009

Creative budget options needed

Oklahoma may or may not finish this fiscal year in the black, and the consensus seems to be that next year's budget situation will be worse.

Oklahoma's share of "stimulus" money could help, but then again it could serve to lock in higher levels of spending, thus exacerbating our problems.

And there's one proposal -- an item on next year's crowded ballot -- that is certain to cause headaches. Leaders of the state's most powerful labor union, the Oklahoma Education Association, are asking taxpayers for an additional $850 million annual bailout. It's called the HOPE initiative, a proposed constitutional amendment that would require the Legislature to increase per-pupil spending to the regional average.

This is extremely irresponsible public policy, which is why even some of public education's biggest boosters are hoping against HOPE. Esteemed Oklahoma economist Larkin Warner, an unwavering supporter of increased funding for education, says reaching the regional average will require other areas of government -- such as roads and bridges, corrections, higher education and health care -- to take a hit.

"Expenditure cuts on non-K-12 education functions will be a mathematical certainty," says Warner, regents professor emeritus of economics at Oklahoma State University. "The backlash to such a reallocation from other needed functions of state government would be profound and lasting."

Ed Allen, president of the Oklahoma City affiliate of the American Federation of Teachers, AFL-CIO, wrote in The Oklahoman that "unless the state receives a windfall in additional revenue, 12 percent across-the-board budget cuts for every agency will need to occur."

So with these fiscal storm clouds gathering over the dome, what's a policymaker to do? David Blatt of the left-of-center Oklahoma Policy Institute correctly suggests that "state policymakers will need to display a great deal of flexibility and willingness to utilize all the policy options at their disposal to keep the state budget afloat during the upcoming years."

I agree. And though this is not what Blatt had in mind, there is one creative option that would take some of the pressure off budget writers while increasing per-pupil spending in the public schools: a school choice tax credit.

Numerous studies have shown that school choice can save money. Just two months ago, in a report prepared for the Florida State Board of Education, Paul Peterson and Martin West of Harvard's Kennedy School and Eric Hanushek of the Hoover Institution wrote, "There is no fiscal reason to eliminate any school choice options currently available to students and families. On the contrary, an expansion of those options would very likely yield savings to state and local taxpayers."

The Oklahoma Council of Public Affairs has repeatedly demonstrated, and will do so again in a fiscal-impact study to be published next month, how school choice saves money.

"Whoever digs a pit will fall into it," the proverb says, "and he who rolls a stone will have it roll back on him." Wouldn't it be ironic if the teacher union's irresponsible ploy forced legislators to save money via school choice?

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