State education: FAQs on the $46.7 million budget cut to preK-12 education

On Dec. 23, 2015, the Oklahoma Secretary of Finance declared a General Revenue failure and instructed all state agencies to reduce specific appropriation accounts by 3 percent. Agencies were also required to submit their proposed plan to the state by Jan. 7.  

The State Board of Education on Jan. 7 proceeded with a mandated three-percent budget cut for Oklahoma’s preK-12 public education system, an action that has sparked many questions and, in some cases, a misunderstanding of what it means for schools.

What follows are some of the most common misunderstandings and questions we are seeing:

Why did the Oklahoma State Department of Education (OSDE) cut funding for schools by $46.7 million?

In the wake of a substantial decline in state revenues, the Oklahoma Secretary of Finance declared a General Revenue failure and directed all state agencies to cut their current fiscal year budget by 3 percent. For preK-12 public education, that requires a mandatory cut of $46.7 million for the remaining six months of Fiscal Year 2016, which ends June 30.

That total includes $25 million from the school funding formula, $12.4 million from health insurance costs and $8.5 million from the Public School Activities account.

Why did the Oklahoma State Department of Education (OSDE) cut funding for schools by $46.7 million?

In the wake of a substantial decline in state revenues, the Oklahoma Secretary of Finance declared a revenue failure and directed all state agencies to cut their current fiscal year budget by 3 percent. For preK-12 public education, that requires a mandatory cut of $46.7 million for the remaining six months of Fiscal Year 2016, which ends June 30.

That total includes $25 million from the school funding formula, $12.4 million from health insurance costs and $8.5 million from the Public School Activities account.

Did the board eliminate programs such as school lunches, Advanced Placement, staff development and STEM education?

No. The board strategically transferred a portion of the money for those activities (about $4 million) to the general account that schools use for most of their state funding — an account called the Financial Support of Public Schools, more commonly known as the funding formula. School districts receive the bulk of their state aid from the funding formula, and the board wanted to cushion the mandated 3-percent reduction of $29.7 million.

As a result, OSDE was able to reduce the funding formula cut to $25 million.

Moreover, this transferral removed the strings attached to that funding, which gives districts more local control over how that money is used. As the fiscal year continues, district administrators will have tough decisions to make. They can continue to use the transferred funds for school lunches, AP, STEM, and staff development, or they can use it for other needs that might be more pressing, such as utilities and teacher salaries.

Did the State Board of Education eliminate STEM education?

No. It transferred to the funding formula nearly $300,000 from STEM-Ready Schools, which offers support and resources for math and science teachers. STEM education remains a vital component of instruction in Oklahoma schools. The State Department of Education, which administers STEM-Ready Schools, will be able to use STEM carryover funds to continue providing services to teachers in these subject areas.

Did charter schools receive any cuts?

Yes. In fact, most charters are entirely dependent on state aid from the funding formula and will likely experience significant hardship.

Why didn’t the State Board of Education cut athletics programs?

Districts make these decisions. Most coaching stipends are paid through the funding formula, but gate admission, concessions and booster clubs cover other related expenses. Funding for athletic programs varies from district to district. 

Has the education lottery money helped alleviate the funding cuts?

The Oklahoma State Legislature appropriates lottery money to the funding formula. Lottery dollars comprise a tiny percentage of preK-12 education funding. In FY 2016, the Lottery Trust Fund amounted to less than 1.5 percent of appropriated funds for preK-12.

Are any more funding cuts to schools expected this year?

Yes. In fact, that was why State Board of Education members wanted to cushion the funding formula reduction as much as possible. The State Board of Equalization has indicated that a revenue failure is likely for a dedicated revenue stream dubbed the HB 1017 fund. State leaders anticipate learning the extent of that cut on Feb. 16.