Volume 6, Issue 14
That is, until the can is kicked into the wall of reality.
Economically speaking, America has lost its moorings to revenue reality. We are a ship of state afloat without an economic compass or anchor. Just as it is impossible to print and borrow money indefinitely, it is equally unsound to overtax and regulate the commerce of individuals or businesses. Socialism has never worked in the history of nations. Neither has democratic socialism when government taxes too aggressively. Economic growth is restrained when taxes are too high, the economic wall of reality is reached.
In the United States today, approximately 45% of Americans pay 100% of federal income tax. Stated in the opposite, 55% pay no federal tax. In addition, certain business owners in the highest personal income tax bracket pay more than 50% of gross revenues in tax when property tax, ad valorem tax, and special use taxes are included.
There are valid criticisms in reference to the theory of cutting taxes for the purpose of generating greater government revenue through greater economic growth (supply side economics). However, the evidence is conclusive that there are diminishing returns in economic growth, and therefore revenue, to the government when taxes exceed 50%. This 50% rule also applies to the percentage of people paying tax. When over 50% are not required to pay a share of federal taxes, the minority paying taxes changes their investment strategies, impacting the aggregate growth of the economy.
Through lack of leadership, governments refuse to make the tough choices necessary to provide long-term sustainable solutions. They irresponsibly kick the can down the road in some false hope that, by ignoring the problem, it will cure itself. Further, for some strange, unexplainable reason, this same leadership is afraid to have a frank discussion with the public to define structural reform necessary to address the problem. The public, therefore, is left by leadership’s timidity to protest the situation directly impacting them without full knowledge of the economic wall of reality. They are compassionate in their desire to better the situation. In this then, the public is genuine and faultless in their innocent naivety.
Four states are currently in the headlines as teachers walk out and protest in their capitals. It is not just that they want higher wages, which they absolutely deserve. It is that they want funding for their classrooms in the form of new textbooks and equipment to properly teach and educate the children for whom they have passionate concern. These states are Kentucky, West Virginia, Arizona, and Oklahoma.
Each state finds itself in a circumstance untenable because of cultural historical consequences. By kicking the can down the road for decades and layering over systemic problems with temporary fixes, government has produced a scenario in which they are not able to kick the can down the road past or through the wall of reality. The can of irresponsibility is bouncing back in everyone’s face. The teachers faultlessly think that more money for the classrooms is a matter of priorities. The legislatures are not now trusted to manage the taxing formulas.
Oklahoma is case in point.
Like every state, Oklahoma is unique in its cultural historical consequences. Oklahoma is a land run state, the only such state in the union. The 77-county grid was originally designed in size so that each county seat was only a half-day horseback ride in distance, back and forth in daylight, from the farthest point in the county. Other states added counties when an area of greater population required a new county for government efficiency. Oklahoma’s land run was a government program that tested this axiom – give away land and the population will grow. There are now 30 counties in Oklahoma with less population than 1907, the year of statehood.
These original counties and early populations constructed school districts at a time when a horse and buggy was the main source of transportation. As the result of cultural historical consequences, Oklahoma now has 512 public school districts, one of the highest numbers per capita in the country. Each school district has a superintendent with a minimal staff of four people. Larger districts have many more employees. The minimum budget of most superintendent’s offices is $500,000 per year. This includes salaries, health care insurance, pensions, vacation pay, office and equipment. The state could easily be reorganized into no more than 100 superintendent offices. This would include one per rural county with multiple superintendents in the more heavily populated areas. Such reform would eliminate the need for 412 superintendent operations. The result would be a savings of $206 million per year to the state’s budget. Larger districts might require larger budgets to absorb former superintendent services. Yet, every single dollar saved could go directly into the classroom to support the teachers. If the savings were only $50 million it is the right thing to do.
Under this plan, no schools would be closed. No districts would be consolidated. They could be administered by a county superintendent of schools. There are county courthouses and county commissioners providing city and county-wide services. So, it would be the same with a county superintendent. It just requires a change in the cultural mindset. The outcry arguments are always that, “it’s not that easy” or “you don’t understand how complicated this is”, or “ the savings are not enough to matter” or “if we lose our superintendent, soon we will lose our school.”
These concerns should be aired, but not to consider reform, in light of the wall of reality, is leadership malfeasance.
The condition in which the state finds itself is not any one person’s fault, especially not the teachers. It is the result of the cultural historical consequences of the state.
Raising the essential elements of reform as part of the discussion to provide more revenue for the classrooms is the responsibility of all leaders, including the Oklahoma Education Association.
The difference between the federal government and an individual state kicking the can down the road is that the state cannot print money. In fact, most states, by their constitutions, have to balance their budget. The taxing wall of reality has been realized by state government. The Federal Government has not yet faced the print-and-spend wall of reality, but it will.
The can and the wall are, in fact, a process and a reality that when not respected results in not only consternation, but real sacrifice for the public.
Economic reality is a principle that cannot be ignored.
Dealing with this economic reality rationally requires leadership committed to truth in principle and a citizenry committed to shared principles of reality.
My name is Marc Nuttle and this is what I believe.
What do you believe?