Budget & Tax, Education

Free Market Friday: A new way of funding

August 7, 2015

Michael Carnuccio

Most Oklahoma taxpayers have no idea how our schools are funded. That’s not surprising. Money flows to our schools from a variety of sources, each of which may pay based on different criteria.

Now the Oklahoma Educated Workforce Initiative is suggesting ways that would make those dollars serve students better.
Our schools essentially get money from three sources – the state budget and certain dedicated state tax revenues, local property taxes, and various federal education programs.

State aid makes up the largest share of school funding, disbursed to schools based on a complex formula.

The OEWI, which partners with the State Chamber of Oklahoma and Oklahoma Works, published a valuable new report, titled Understanding Oklahoma’s School Funding Formula and Student-Centric Alternatives, analyzing the current system, finding it cumbersome and complicated, and offers suggestions for better ways to fund our schools that would be student centric.

The tax dollars we pay to educate our children ought to be allocated in ways that promote the actual education of those children – an unfortunately novel concept.

How could we do that? The OEWI report discusses several possible alternatives to the current system.

The most promising alternatives, in my view, are the ones that give parents more choices in how and where their children are educated.

For example, education savings accounts would allow parents to take a portion of the funds assigned to their children and use them for private-school tuition, tutoring, and other options, including saving for college. State Sen. Clark Jolley, R-Edmond, and Rep. Jason Nelson, R-Oklahoma City, authored ESA legislation this year and are expected to do so again.

Other alternatives include vouchers and various tax credits and tax deductions to offset or support expenses related to educating children.

Oklahoma has enacted limited versions of some of these, including the Lindsey Nicole Henry Scholarship program, which allows parents to move children with disabilities to the school of their choice.

We also have a tax-credit scholarship program that allows businesses and individuals to donate to scholarship-granting organizations that help needy students pay private-school tuition. Donors get a 50-percent tax credit, increasing to 75 percent in 2016.

Even so, we have a long way to go to make Oklahoma’s school funding system truly student-centric.