Saturday, October 31, 2015

Let's enact school choice, not another tax increase

University of Oklahoma president David Boren—who in 2008 endorsed Barack Obama for president, assuring us that Obama was nonpartisan and was committed to ending the divisions in our country—has floated a plan to raise the state sales tax by 22 percent in order to increase government spending on common education and higher education.

Some of us have seen it all before (see chart below) and are in no mood to be fooled by Lucy holding the football again. A better idea is to increase competition in our educational system by creating Education Savings Accounts, as former Oklahoma secretary of commerce Larry Parman writes in an article opposing the Boren tax increase. "Let parents decide how well their child's school is doing and give them the ability to vote with their feet." 

UPDATE: Below is more helpful information on the Boren tax increase, including observations on why it failed.
  • Mr. Parman methodically dissects the Boren plan in this video.
  • Former Gov. Frank Keating, discussing "the Boren proposal making our sales tax the most expensive in the country," asks the question: "For what? Nothing. Nothing. No reform. No private school choice. No rigor. No accountability. Nothing. Just add more money, as if more money will solve a problem. More money doesn’t solve a problem.” 
  • Lt. Gov. Todd Lamb opposes the tax hike and supports school choice.
  • Gov. Mary Fallin voices concerns that a 22 percent tax increase "may cause more people to shop online."
  • OCPA economists Scott Moody and Wendy Warcholik give four reasons the sales tax hike is a bad idea.
  • OCPA distinguished fellow Andrew Spiropoulos says it "poses a serious threat to both conservative governance and the best interests of the state." He says it makes no sense "to force a poor single mom buying groceries to feed her children to pay more in sales tax" so we can further subsidize tuition for the children of millionaires.
  • OCPA trustee John Brock (writing in the Tulsa World and in The Oklahoman) says the proposed sales tax increase “will produce a crop of unattractive economic and political consequences.”
  • OCPA economists Scott Moody and Wendy Warcholik explain how the tax increase would be bad for Oklahoma businesses: 
  • OCPA president Michael Carnuccio says it's incumbent upon school bureaucrats to get rid of bloat before asking taxpayers for more money.
  • An Arkansas economist says Hillary Clinton's penny sales tax for education provides a cautionary tale for Oklahomans.
  • Oklahoma City University officials Steven Agee and Russell Evans say the penny sales tax is not a good solution.
  • When the state "raises the already-high sales tax and absconds with the revenue,” writes OCPA distinguished fellow Andrew Spiropoulos, “it cripples the ability of cities … to finance any public improvements or even maintain the level of services.”
  • Though not writing about the Boren tax increase itself, former OU education professor Gary Greene points up all manner of inefficient education spending
  • Tulsa Mayor Dewey Bartlett opposes the Boren tax hike. Gov. Mary Fallin is expressing concerns. Even state Superintendent Joy Hofmeister is withholding judgment for now.
  • Oklahoma City Councilman Pete White says of the Boren tax hike, "I don't see how we can tolerate it." He says it "would be devastating to cities and towns throughout Oklahoma." 
  • "Tulsa Mayor Dewey Bartlett, in his individual capacity, and the Oklahoma Municipal League filed a brief with the Supreme Court saying the proposal would pose a threat to the public because it would cause the state to have one of the highest sales tax rates in the country," the Tulsa World reports. "'As a result, citizens will be economically burdened and will spend less,' the brief states. 'Oklahoma businesses will see revenues decline and will struggle to survive, as citizens spend less or turn to the Internet for their purchases. New businesses will pause when considering Oklahoma as a business-friendly place to invest.' Cities and towns would see a decline in sales tax revenue, which is their lifeblood, the brief states. The decline would affect the ability to provide services for police, fire, roads and bridges, the brief states."
  • Oklahoma County assessor Leonard Sullivan reminds us that Oklahoma County "would be crippled by a 2 1/2-cent sales tax increase."
  • "Given the onerous requirements the proposal imposes on future legislative appropriations," writes OCPA's Michael Carnuccio, "other core areas of government would be cut significantly to fund the additional spending increases mandated by the proposal."
  • OCPA's Jonathan Small tells Oklahoma Watch and the Associated Press that Oklahoma can increase teacher pay without having to adopt the Boren tax increase.
  • The estimable Tax Foundation says the Boren tax hike would make Oklahoma's combined state and average local sales tax the highest in the country.
  • "We are already being hurt tremendously by Internet sales," says Tulsa Mayor Dewey Bartlett. "This will exacerbate the problem. That is without question."
  • The Oklahoma Municipal League points out that the Boren tax increase could hurt Oklahoma police and firefighters.
  • OCPA president Michael Carnuccio says that with Oklahoma's per-pupil available revenues at an all-time high, it's possible to raise teacher pay without resorting to a 22 percent hike in the state sales tax rate.
  • The Sand Springs City Council has approved a resolution opposing the Boren tax increase.
  • Oklahoma GOP national committeeman Steve Fair says the Boren tax increase is a bad idea.  
  • Is this expenditure more important than teacher pay?
  • At least one Tulsa City Councilor doesn't care for Mr. Boren's "ridiculous, half-cocked solution."
  • Instead of a tax hike, asks state Rep. David Brumbaugh (R-Tulsa), "how about some financial transparency and oversight? How about family Education Savings Accounts? Let’s push school choice so children can attend the public or nonprivate school of their choice." 
  • "An initiative petition effort in Oklahoma that would raise the state sales tax to fund various education initiatives also includes language that would strip state legislators of appropriation power, preventing any adjustment to spending for education in down years," The Oklahoman notes. "This means other areas—such as public safety, health and road funding—would face huge budget cuts in times of shortfall. In Mississippi, voters apparently trusted elected lawmakers to handle this job. It will be interesting to see if Oklahoma voters take a similar course, or if they choose to handcuff state policymakers." Looks like it's time for the Takings Coalition to get the band back together.
  • Democratic state Rep. Ben Loring has concerns about the tax. "A sales tax is a regressive tax, in other words, a poor person pays a far higher percentage of their income under a sales tax than anyone else does," he says. Moreover, he says, "if this is passed, I don't foresee the legislature giving any additional moneys to education than what this tax will generate."
  • "I would like to see The Oklahoman ask the University of Oklahoma and Oklahoma State University for a breakdown of their administrative positions with accompanying salaries listed," writes Gary H. Chaffin of Oklahoma City. "I see reports quite frequently of a new position of vice president of this or chancellor of that being created to address some supposed problem. I never see any reports of either school, or any other school for that matter, trying to find ways to save on administration costs. All they ever want is more money! I venture to say the public would be shocked at the number of such positions and the amount of taxpayer money being spent on these salaries. The public should demand this information before even considering another tax." 
  • Dick Soergel of Oklahoma City believes "higher education should present the public with more information," such as "breakdowns of total annual revenue for each of the past 10 years; the student/teacher ratio (including graduate assistants who are teaching many classes); the average salaries of our college professors compared with surrounding states; the average salaries and growth in administrators at our colleges; an analysis of funding the number of colleges and universities versus our tax base, and plans for addressing the liberal bias that is prevalent in our colleges and universities."
  • "OU President David Boren wants a sales tax increase to fund education while loaning a bankrupt technology company over $500,000," writes Dub Whalen of Oklahoma City. "This company was started by an OU professor who holds many valuable patents and works for OU. It's not bad enough that taxpayer money is used to fund private companies under the guise of job creation, but we have state universities in the loan business while continually raising tuition."
  • Tom O'Neill of Edmond says Mr. Boren's "newest request for yet more money for the education empire is an insult to taxpayers.
  • John Harris of Oklahoma City says "when the state gets the number of school districts to a reasonable level and pares the administrators," among other things, "then I will vote more money. Until then, I will reluctantly vote no."
  • The Boren tax increase was defeated by a margin of 59.4 percent to 40.6 percent.
  • "Yet those close to him say—and Boren, himself, acknowledges—that this campaign is about how history will remember him,"
  • A perceptive public school teacher realizes that Higher Ed sunk her pay raise.
  • "It was Boren's effort to mislead voters that ultimately led to the defeat of this state question," Steven C. Agree writes. "Once voters were educated about the issue, and the fact that essentially $400 million of the estimated $615 million in tax revenue would not be going to teacher pay raises, there was an obvious revolt at the ballot box." Agee believes we should be wary of people "who seek to feather their own nest by riding the coattails of our public school teachers."

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