Amid a $1 billion budget shortfall due to the collapse of the oil industry and a simultaneous (and badly timed) teacher-shortage, Oklahoma Republican Gov. Mary Fallin proposed Monday the state give teachers a $3,000 pay raise next year. The move, which she detailed in her annual State of the State speech, would cost the state $178 million. In exchange, she’s asking lawmakers to merge several districts and give superintendents more flexibility in how they spend their money.
“The education of our children remains a top priority of mine in the budget even in fiscal climates like this year,” she said.
The move was mostly in response to an initiative that’s now gaining traction to place a measure on this fall’s ballot that would raise the sales tax 1 percent to provide teachers with a $5,000 pay raise.
Fallin pointed out Monday that the penny sales tax would bring the sales tax rate to 5.5 cents on the dollar and cause Oklahoma to have the nation’s highest sales tax.
But Amber England, the director of the state’s Stand For Children chapter and a lead organizer for the penny sales tax initiative, says Fallin’s proposal doesn’t go far enough and is not a long-term solution.
“Any teacher pay increase from the existing budget would come from a revenue source that has a billion-dollar budget hole in it,” England said in a recent interview. “If you propose a teacher pay raise with a billion-dollar hole, you better figure out a way to fund it. We think there should be a dedicated revenue source for a teacher pay raise.”
During the most recent oil boom, Fallin led the state’s Republican-dominated legislature through a series of income and corporate tax breaks. The state now collects in taxes just half what it did in 2007.
But with a 70 percent drop in oil prices in the last two years, thousands of the state’s workers in the industry have been laid off and the state’s income and sales tax revenue has dropped drastically. Last year, the state’s politicians grossly miscalculated how much oil revenue they would bring in, forcing Fallin to declare in November a “revenue failure” after tax revenue fell $50.1 million or 12 percent short of projections.
School districts had to make $47 million in cuts, or 1.5 percent of their total budgets last year.
In 2014, the state’s superintendents began complaining about a teacher shortage that left hundreds of classrooms across the state being taught by substitute teachers for months at a time. A task force concluded that the state is among the lowest in the region in teacher pay, with starting teachers making $31,600.
In her address Monday, Fallin proposed “taking control” of the state’s budget by cutting 6 percent of state agencies’ spending and capturing $910 million in revenue by raising its cigarette and online sales tax, consolidating administrative services and repealing several of the state’s $8 billion worth of tax exemptions. Fallin pointed out that her budget proposal uses no one-time revenue to close the budget hole.
She also proposed allowing superintendents to spend money traditionally used on facilities on teacher pay and other needs, freeing up about $200 million in spending. And she gave a plug to an effort in the state to establish education savings accounts, which would allow parents to more easily transfer their children to private schools using tax dollars.
“Let’s give students a chance at better success in the state’s schools than they have today,” she said.