The following statistics are from the latest National Education Association report of 2014 for the 50 State plus the District of Columbia. (Except as noted)
Average US per capita income is $44,200
Oregon per capita income is $39,258 making it 34th of 51 States + DC
The US average paid in local and state taxes per capita is $6,414 which is 14.5% of total average per capita US income (NEA latest stats was for 2011-12)
In Oregon, the average paid in local and state taxes is $6,093 (26 of 51), and is 15.5% of total per capita income. ( NEA latest stats was for 2011-12)
K-12 school revenue in Oregon is $11,988 per pupil versus the national average of $12,357. Making Oregon the 25th of 51 and 97% of the national average.
The national average teacher salary is $56,610, while average teacher salary in Oregon is $58,638 which is 103.6% of the national average making Oregon 14 of 51 in highest salary. (Salaries don’t include other compensation such as retirement, or health insurance, so Oregon, with its excellent benefit program is likely in the top 6 States +DC for total compensation per teacher)
The average student teacher ratio in the US is 15.9, while Oregon has a teacher student ratio of 21.5, Number 3 highest of 51 and 135% of the US average.
While Oregon is slightly below average in per pupil revenue we are well below the US average in per capita income. So individual taxpayers are paying a larger share of our lower than average income in taxes than most other states in order to fund an education system that pays its staff some of the highest total compensation in the country. (Compensation includes not only salary, but retirement and health care)
About 85% of school spending is on salaries and compensation. High cost per teacher and lower than average financial support for schools can result in only one thing. Fewer teachers who try their best in crowded classes during fewer classroom hours.
While most people agree on the problem, not enough revenue to pay for more teachers and classroom hours, we don’t agree on the solution, which has to be either cost containment in individual total compensation, or increased revenue. The question is, what is more fair. Or what is the least unfair way to deal with the financial crisis.
I don’t think there is serious consideration of decreasing K-12 spending or teacher salary, so the goal of any changes should be to increase the number of teachers and/or the classroom time. Or hopefully both.
Oregon will adopt a k-12 budget of about 7.3 Billion dollars/ biennium. In order to get Oregon’s education spending to the US average it would take an additional 3% increase, or about $220 million per bi-ennium, or $110 million per year. But where would that come from?
Oregon individual taxpayers are already paying a higher share of their income in state and local taxes than average. So individual taxpayers can argue that they are doing more than their part already.
What about other sources of revenue? The Tax Foundation ranks Oregon as 12th best in business tax climate. According to that article Oregon has the fourth lowest overall sales tax burden nationally for businesses. So we have a relatively friendly business tax rate – with a lot of specific tax breaks and tax expenditures for businesses – and one type of common business tax that is extremely low. If were looking for additional revenue, absent complete structural tax reform, the source that could be deemed most fair would fall on those who already have a good deal. Additionally increasing an inordinately low business tax rate would have the least negative impact on Oregon business competitiveness. (more…)