EDUCATION funding is often touted as an investment in future economic growth. We agree. However, some education officials appear determined to gain school funding at the expense of economic growth both today and in the future.
At a recent legislative hearing, Oklahoma State School Boards Association Executive Director Jeff Mills claimed school funding will be cut if two state questions pass this fall. One of those ballot measures would limit the growth of property valuations to 3 percent. That isn't a cut, just a slower rate of growth.
The other measure, State Question 766, would exempt intangible personal property from ad valorem taxation. For the most part, this means that items like advertising campaigns and trademarks — which have never been taxed — will remain untaxed. That's not a funding cut either.
SQ 766 does repeal some existing taxation of intangible assets now assessed through the state Board of Equalization, which could have a $42 million impact on school funding. But that amount will likely be offset by standard growth in annual property tax collections. K-12 education funding alone has increased as much as $56 million in a single year through growth in ad valorem collections.
More importantly, the defeat of SQ 766 could result in $60 million in newly assessed taxes on Oklahoma businesses. That could drive some businesses out of state and slow job growth at others. The economic consequences could translate into real funding cuts for public schools. The $200 million slashed from education since 2009 due to recession is proof.
Tax policies that cost Oklahoma jobs cost Oklahoma schools funding. On the other hand, tax policies that encourage economic growth generate significant revenue for education. OSSBA's opposition to these two state questions could force true budget cuts in the future to prevent phantom cuts on paper today. It's the epitome of penny wise, dollar foolish.