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.
We should consider imposing a gross business receipts tax which is in essence a type of sales tax on businesses. It would be very simple to adminster, and could be very modest, and not subject to special tax breaks for favored businesses.
Oregon’s GDP in 2013 was $220 Billion. In order to raise $110 Million per year for education, an educational fund specific gross receipts tax would only have to be .05%. For a business with $1 million in gross revenue it would cost an additional $500/year. Not insignificant, but at a cost of less than $42/month, one that should be manageable by a million dollar business.
Why should we increase revenues for k-12 at all you ask? Because it would be part of the trade off in cost containment.
Is it fair to take actions that control the costs of individual teacher compensation? Since Oregon is below average in per capita income, and above average in per teacher costs salary, I believe the answer to be yes. We can maintain a comparatively good salary for teachers, especially teachers with less than 12 years experience, and control costs in benefits where possible.
But, we have court decisions that have to be followed, and contracts that have not yet expired. So Controlling costs means changes in political and legal paradigms. You can’t simply wave a wand.
Ban teacher strikes. Oregon is one of only 12 states that allow teacher strikes. The other 38 states all believe that public education is a public necessity and therefor require other methods to resolve labor disagreements. We’ve shown in a prior article how States that allow teacher strikes tend to have higher costs, and worse educational outcomes than states that ban teacher strikes.
Banning teacher strikes would allow school boards, particularly those in smaller communities, a more balanced playing field when negotiation with local teacher unions. Don’t put a child’s education at risk over hardball negotiation tactics. Banning strikes doesn’t mean teacher unions don’t have power to negotiate forcefully or aggressively. It just means they can’t threaten to close schools as the ultimate threat in contract negotiations.
Make all Public teachers state employees. This would allow the State to negotiate the terms of all teacher contracts going forward. While this would take away some local control. It may the they type of control a school board would be happy to cede. The School Board could then concentrate on curriculum, facilities, and budgeting and not get into a personally disagreeable negotiation with teachers, who they rely on for expertise and input in improving the local schools.
Most importantly: Condition the imposition of the business gross receipts tax on using it to hire teachers. One problem with simply increasing a tax with the intent of using it for a stated purpose is ensuring that’s what it’s used for. Rather than having the gross receipts tax go into the general fund, it could be directed to a special teacher hiring pool. These teachers, hired by the state, would be state employees and would be assigned to school districts as teachers on loan. These teachers could even be assigned based on a districts pro rata share of students, or assignment could be conditioned on the School Districts average teacher salary. The lower the average salary in a district, the more State pool teachers they could receive. This would make some sense. If a district is paying its teachers less, then the teachers in that district should have lower student / teacher ratios. The extra State pool teachers would allow the district to relieve its teachers of some workload, thus making better work conditions the trade off they would accept for their lower salary.
With an increase of $110 million in revenue per year, the State could hire almost 1,300 pool teachers at a cost of $85,000/teacher. According to the NEA report, in 2013 Oregon had 26,418 teachers (It’s unclear if this is FTE’s or total teachers, including part time). So that modest gross receipts tax on Oregon businesses could increase our available teachers by at least 5%.
Outside the box ideas:
An ROTC for teachers: This idea isn’t a revenue idea. But there is a model for recruiting highly qualified candidates in a profession they may not otherwise consider. The Military pays for higher education through the Reserve Officer Training Corp as long as the candidates commits to serving in the military for a period of time after graduation. Oregon could consider a similar program for teachers. And at a little additional cost. If successful it would also end up producing more Oregonians with graduate degrees.
This program would offer any qualified undergraduate student who gets a teaching degree and teaches in a public school for five years two years of free tuition in any Oregon State university system graduate program. The “cost” to the State would be minimal. We already operate these schools, and adding a few more students would have a relatively small marginal cost.
Such a program should encourage high achievers who would like to go to grad school, but don’t have the finances, to consider a career in teaching to start. Hopefully, many of those teachers would even stick to the teaching profession. But even if they didn’t, the program should attract some dynamic and high level undergraduate students who may never have thought of a career in teaching, but would be willing to do it to finance their ultimate goal of a graduate degree.
It may be difficult, but there is a deal to be done here. We could Increasing revenues to get Oregon up to the national average. Out of fairness, the revenues would not come from individuals, as they are already paying their share, but through an increase in a business tax that is currently very low as compared to other states. This also has the benefit of having the least impact on Oregon’s economic competitiveness.
We should dedicate that increased revenue specifically to hiring more teachers making the greatest impact on student / teacher ratios and class room time.
Other non revenue/spending options that could also improve our school system should also be considered as part of the agreement to raise taxes and revenue. Particularly legislation banning teacher strikes and encouraging more students to consider a career in the teaching profession.Share on Facebook