In shaping policy, real results matter

POLICYMAKERS say they’re focused on maximizing the use of taxpayer dollars and providing greater funding to education. Their actions often contradict those claims.

Consider a comparison of two state incentive programs recently highlighted by the free-market Oklahoma Council of Public Affairs: the Oklahoma Equal Opportunity Education Scholarship Act and the state’s Film Enhancement Rebate Program.

First approved in 2001, the film program offers direct rebates of up to 35 percent for in-state expenditures on Oklahoma goods and services, wages and fees. Up to $5 million in annual rebates has been authorized in recent years, although that figure was lowered to $4 million for 2017.

The education scholarship act, enacted in 2011, provides income tax credits to those who donate to scholarship funds that help mostly low-income students attend private schools. The program is currently capped at $5 million annually.

Consultants hired by the state Incentive Evaluation Commission reviewed the film program in 2016 and concluded there was “no evidence that the Oklahoma film industry has strengthened” as a result of the program, associated job creation was “neither stable nor sustainable” and the effect on Oklahoma’s image nationwide “is unclear, but likely limited.”

While the program has funded some hit films — the faith-based “I Can Only Imagine” now in theaters is one — many films funded through the program have produced no box office ticket sales.

In contrast, a 2017 report by Jacob Dearmon, director of the Center for Data Analytics at the Meinders School of Business at Oklahoma City University, and Russell Evans, executive director of OCU’s Steven C. Agee Economic Research and Policy Institute, determined the scholarship tax credit generates far better results.

Dearmon and Evans compared the amount of forgone tax revenue with money government would have otherwise spent educating scholarship recipients in public schools. In 2016, the state provided $3.4 million in scholarship tax credits, but Dearmon and Evans concluded $8.8 million from all tax sources (including $4.2 million in state funds) would have otherwise been spent educating those students in public schools, creating a net savings of $5.4 million.

For every $1 the state forgoes through the education scholarship act, it’s estimated the state reaps $1.24 in return. For the film program, the return on investment is 13 cents for every $1 spent.

Despite the education act’s success, lawmakers rejected bills to raise the cap on the scholarship program this year. Status-quo education groups lobbied against the scholarship bills as somehow harming public schools, but voiced no notable opposition to the film program, which has comparable state “costs” that arguably impact school funding. Their opposition has less to do with finances than ideological hostility to poor children having greater school choice.

There are many factors guiding state policy decisions at the Capitol. Unfortunately, fiscal benefit and positive real-world results are not always among them.