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Oklahoma Economist Suggests Ways to Pay for Teacher Raises

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Support for giving Oklahoma’s teachers a raise is high, but proposals on how to pay for it are in short supply.

At least one lawmaker has gone so far as to tell his colleagues not to file teacher pay raise bills if they don’t have an identified funding source.

One potential source is Oklahoma’s sales tax, which was created for a goods-based economy. OSU economist Dan Rickman said that worked 50 years ago, but now we have a service-based economy.

"I think we could broaden that base and bring in a lot of money, and that wouldn't necessarily be raising rates, just kind of broadening it to things that probably should have already been taxed," Rickman said.

Support for broadening the sales tax is growing among lawmakers, but that’s partly because cities are starting to eye it as a stable source of additional funding for them, too.

While many are on the hunt for additional revenue, Rickman said the state education funding formula is another place to look. Rickman said he often meets people surprised by Oklahoma’s statewide equity of funding.

"I would like to see that ended, because that would allow the districts who want to be very aggressive in promoting education, in their economic development, free them up to be the leaders in this and maybe show us," Rickman said. "It'd be an experiment, right? If it fails, then no one else will do it."

Rickman pointed to Texas, where the average teacher salary is higher than in Oklahoma, but it’s pulled up by teachers in urban areas making more than those in rural areas. Funding formulas in states like Texas and Colorado allow local entities to kick in more funding, creating some unevenness between rural and urban areas.

"They had a recent ballot initiative to try to provide some funding for rural areas in Colorado, and it was shot down," Rickman said. "But they're not holding the whole state back, because Denver, you know, they can have more flexibility. They have some really great districts, not because of state funding but because of the local areas."

Rickman offered his ideas in response to a question about how to pay for teacher raises at a 2017 economic outlook conference hosted by OSU Tuesday in Oklahoma City.