Flaws evident in city teacher pay raise plan

AN initiative calling for a temporary city income tax to boost Oklahoma City teacher pay has collected enough signatures to potentially go before voters. Given problems apparent with the plan, Oklahoma City residents should reject the idea, regardless of how they otherwise feel about school funding debates.

The proposal calls for a 0.50 percent income tax, which would be levied on Oklahoma City residents. Backers say the plan could generate about $50 million per year. The tax would sunset after four years. Individuals with adjusted gross income of less than $15,000 per year and families with income of less than $30,000 per year would be exempted.

Money generated by the tax increase would pay for annual stipends for teachers, school nurses and support personnel.

The most obvious of the flaws in the plan is that it's an open invitation for middle-class and upper-income families to leave Oklahoma City and move to suburbs that don’t tax incomes. Oklahoma City already struggles to retain middleclass families. Why give them additional financial incentive to leave?

The “How Money Walks” website uses IRS data to track the migration of people and associated income across the nation. The site provides state and county-level data. From 1992 to 2015, Oklahoma County lost more than $1 billion in net income as people moved out. The top three destinations for those leaving Oklahoma County were neighboring Canadian, Cleveland and Logan counties. Those moving out of Oklahoma County and into those three counties had combined income of more than $900 million.

While people also moved into Oklahoma County from other places during that time, the combined income of the incoming residents was less than the income of the former residents. Adding a city income tax to state and federal income taxes would only encourage anyone with financial means to stay away from Oklahoma City. That doesn’t benefit the school district or the community.

The temporary nature of the proposed tax also is problematic. How does it improve the district if teachers receive pay increases for four years and no more?

It’s uncertain how the proposed income tax would impact other revenue sources. The more money a district receives from local sources, such as property tax, the less it receives per pupil in state appropriations because of legal requirements that policymakers provide equitable funding statewide. So the city income tax increase could be at least partly offset by reduced state funding.

Also, if the tax causes an out-migration from Oklahoma City, that could drive down property values and associated property taxes that now fund Oklahoma City schools.

Proceeds from the tax would go to schools other than the Oklahoma City district, according to the website of Save OKC Schools, the group that led the initiative. Proponents say proceeds could be distributed to Deer Creek, Edmond, Moore, Mustang, Norman, Yukon and more, because students living in Oklahoma City attend those districts. This means Oklahoma City residents would pay higher taxes to support schools where most patrons don’t pay the income tax.

Looking for a way to pay teachers more is laudable, but this isn't the way to do it. This income tax proposal is poorly designed and could create more problems than it solves.