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ACE BOOK 2016 ACCOUNTABILITY FOR A COMPETITIVE ECONOMY
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2016 Overview: About the Data 1 Chapter 1: An Overview of Oklahoma’s Economy 2 People 3 Employment 4 State Fiscal Health 5 Gross Domestic Product 6 Pensions 7 Health Care 8-9 Quality of Life 10-11 Chapter 2: Oklahoma’s Business Climate 12 Taxation: Snapshot of Oklahoma’s Taxes 13-14 Taxation: State Business Tax Climate 15-16 Business Taxes 17-18 Unemployment Insurance Taxes 19 Workers’ Compensation 20 Courts 21 Innovation 22-23 Chapter 3: Oklahoma’s Infrastructure 24 Transportation: Roads & Bridges 25-27 Transportation: Rail 28-29 Transportation: Ports/Waterways 30-31 Transportation: Aviation 32 Water 33-35 Energy: Oil & Natural Gas 36 Energy: Wind Power 37 Chapter 4: Education & Workforce Development 38 Schools 39-40 Testing 41-44 High School 45 College Readiness 46 Higher Education 47-49 Career Tech 50 Tomorrow’s Workforce 51 STEM 52-53 Education Finance 54-56 Research Foundation Board of Directors 57 Table of Contents
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2016 Overview: About the Data The 2016 Accountability for a Competitive Economy (ACE) Book provides a snapshot of some of Oklahoma’s most important issue areas in order to provide a better understanding of our state’s current framework and what areas Oklahoma needs to improve on in the future. This book is broken up into four chapters (An Overview of Oklahoma’s Economy, Business Climate, Infrastructure, and Education and Workforce Development). Each chapter is broken up into individual sections that focus on pertinent topics to Oklahoma’s economic future. While it is necessary to understand our state’s weaknesses, it is also important to see where Oklahoma has improved and what our state does well. By comparing Oklahoma to our regional neighbors and the nation as a whole, we can learn from other states’ economic frameworks to see what makes them more or less successful than our state. Oklahoma’s economy has improved in several areas over the past 15 years. Our state’s per capita personal income has increased 73.9%, and our economy has added 174,000 jobs. Oklahoma’s gross domestic product has also increased 99.3% since 2000. Unfortunately, Oklahoma continues to struggle in other areas. The quality of life and health of Oklahomans continues to be a negative issue due to a high percentage of uninsured residents, a high rate of participation in unhealthy behaviors, and poor air quality. Our education system is also in the spotlight for unfavorable reasons. Oklahoma’s public schools are not adequately preparing our youth for higher education and the workforce. Our students’ test scores are consistently below the national average, and our education pipeline is broken. These are issues that need to be fixed, and until Oklahoma’s health and education problems are solved, our economy will continue to lag behind other states. This evaluation of Oklahoma’s current economic landscape was produced to inform and assist policy makers in creating a better future for our state and all Oklahomans. 1
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Chapter 1 AN OVERVIEW OF OKLAHOMA’S ECONOMY The following pages illustrate the current state of the Oklahoma economy and how it progresses over time. We take a close look at various economic indicators, including migration, per capita personal income, employment growth, state gross domestic product, and public pensions. This section also reviews health care and quality of life issues. 2
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PEOPLE To draw people to Oklahoma, our state must be at the forefront of creating jobs and making Oklahoma a healthy and attractive place to live and raise families. An Overview of Oklahoma’s Economy Last year, 15,466 people moved to Oklahoma. • 8,199 from other states • 7,267 from other countries Oklahoma is the 28th most populated state with 3,911,338 people as of July 1, 2015. That’s a 13.35% increase between 2000 and 2015. The U.S. population increased by 14.21% during the same time period. In 2014, Oklahoma’s per capita personal income was $43,138. It has increased 73.9% since 2000, which is the fourth largest percent change in the nation. The U.S. average has only increased by 50.8% since 2000. Source: U.S. Bureau of Economic Analysis; U.S. Census Bureau OBJECTIVE PER CAPITA PERSONAL INCOME (2000-2014) U.S. Average Oklahoma 3
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EMPLOYMENT To keep Oklahoma’s economy moving in a positive direction, we must continue to create a wide range of jobs and avoid relying on one industry. An Overview of Oklahoma’s Economy OBJECTIVE Source: U.S. Bureau of Labor Statistics Oklahoma’s economy added 21,000 jobs in the last year. Oklahoma has the 29th largest workforce in the nation with 1,670,500 jobs. At the end of 2015, Oklahoma’s 4.1% unemployment rate was the 15th lowest in the nation, and it remained below the national average of 5.0%. EMPLOYMENT BY THE NUMBERS 21,000 JOBS ADDED 5.0% 4.1% OKLAHOMA’S LARGEST SECTORS OF EMPLOYMENT 2014 EMPLOYMENT BY INDUSTRY In the past 15 years, Oklahoma’s employment has grown by 11.63%. THAT’S COMPARED TO: 174,000 JOBS ADDED Government (Federal, State, & Local) 21.0% Retail & Wholesale Trade 14.6% Education & Health Services 13.8% Professional & Business Services 11.2% Leisure & Hospitality 9.4% Government (Federal, State, & Local) 348,000 Retail & Wholesale 240,100 Health Care & Social Assistance 208,200 Professional & Business Services 185,800 Leisure & Hospitality 155,000 4
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STATE FISCAL HEALTH In order for Oklahoma’s financial health to improve, it is imperative that we control our spending habits and more effectively utilize the state’s general revenues. An Overview of Oklahoma’s Economy Source: Mercatus Center, Ranking the States by Fiscal Condition; State of Oklahoma, Fiscal Year 2017 Executive Budget; Tax Foundation, Facts & Figures; U.S. Census Bureau, State and Local Government Finances In FY2014, Oklahoma’s gross collections totaled $13.6 billion, however, the amount of money in the general revenue fund was $5.3 billion. That means that ONLY 38.9% of gross collections went into the general revenue fund. FEDERAL FUNDING MAKES UP 33.8% OF OKLAHOMA’S STATE GOVERNMENT GENERAL REVENUES, WHICH IS THE 17TH HIGHEST PERCENTAGE IN THE NATION. THAT’S COMPARED TO: In FY2013, Oklahoma’s debt per capita was $2,482. Oklahoma ranked 9th best in the Mercatus Center’s rankings of each state’s financial health based on short and long term debt, unfunded pensions, health care benefits, and other key fiscal obligations. Oklahoma ranked better than all of our neighboring states. BY THE NUMBERS Arkansas $1,336 Texas $1,509 Kansas $2,362 Colorado $3,119 Missouri $3,200 New Mexico $3,470 United States $3,611 FY2016 APPROPRIATIONS TOP RECIPIENTS Education & Workforce Development 50.31% Health & Human Services 30.81% Safety & Security 9.61% Transportation 2.63% OBJECTIVE 5
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GROSS DOMESTIC PRODUCT An Overview of Oklahoma’s Economy Source: U.S. Bureau of Economic Analysis Oklahoma’s industrial sectors must continue to grow in order for our state to be competitive. OBJECTIVE Oklahoma’s 2014 GDP was $183.5 billion, which was 1.1% of the total U.S. GDP. Oklahoma’s GDP increased by 4.0% between 2013 and 2014, which was the 17th largest increase in the nation. The national average was 3.9%. The two industrial sectors that showed the greatest growth in GDP between 2013 and 2014 are utilities (27.9%) and mining (8.4%). GDP BY THE NUMBERS Oklahoma’s GDP increased by 99.3% between 2000 and 2014, which was the 7th largest increase in the nation. Missouri 51.5% New Mexico 67.2% Kansas 68.2% United States 69.3% Colorado 72.0% Arkansas 75.7% Texas 119.2% THAT’S COMPARED TO: $183.5 billion (1.1% of the total U.S. GDP) INDUSTRY GDP AS A PERCENT OF TOTAL GDP (2014) Oklahoma U.S. Average 6
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PENSIONS Oklahoma’s decreasing unfunded public pension liability is becoming less of a financial strain on our state’s government. An Overview of Oklahoma’s Economy Source: Oklahoma State Pension Commission; Standard and Poor’s ISSUE • In 2013, Oklahoma had the 29th highest funding ratio in the nation at 66.5%. The U.S. average was 71.2%. • Oklahoma’s unfunded accrued actuarial liabilities totaled $11.4 billion in 2013. • The average public pension plan was 71.8% funded in FY 2013. • The overall funded status of all pension plans increased from 66.5% to 72.5% between 2013 and 2014. • The Teachers’ plan remains the largest and one of the most poorly funded of the seven plans. PENSION FACTS OKLAHOMA PENSION PLANS (FUNDED STATUS AS OF 7/1/2014) 63.2% 62.1% 88.6% 94.6% 88.6% 105.9% 82.5% 72.5% 7
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HEALTH CARE To address access to care issues, it is necessary that we focus on decreasing the percentage of uninsured Oklahomans and increase the number of doctors statewide. 15.4 percent of Oklahoma’s population is uninsured, which is the 5th highest percentage in the nation. The U.S. average is 11.7%. An Overview of Oklahoma’s Economy OBJECTIVE HEALTH INSURANCE COVERAGE PERCENTAGE OF UNINSURED RESIDENTS (2014) Source: U.S. Census Bureau 8
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HEALTH CARE An Overview of Oklahoma’s Economy Oklahoma has 84.8 primary care physicians per 100,000 people (which includes general practice, family practice, OB- GYN, pediatrics, and internal medicine). Only two states have fewer. The national average is 123.5. Oklahoma has 50.2 practicing dentists per 100,000 people, which is the 37th most in the nation. The national average is 62. Oklahoma has 116 hospitals, which is the 19th most in the nation. When compared to population, Oklahoma has three hospitals per 100,000 people, which is the 9th most in the nation. The national average is 1.6. AVAILABILITY OF HEALTH CARE NUMBER OF PRIMARY CARE PHYSICIANS (PER 100,000 POPULATION) Source: Kaiser Family Foundation, State Health Facts; United Health Foundation, America’s Health Rankings 2014; U.S. Census Bureau U.S. Rank 39TH U.S. Rank 24TH U.S. Rank 35TH U.S. Rank 31ST U.S. Rank 27TH U.S. Rank 48TH U.S. Rank 42ND 9
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QUALITY OF LIFE More and more businesses choose to do business based on the best places to live. Oklahoma lags behind most states due to poor air quality, a high crime rate, and an unhealthy population. An Overview of Oklahoma’s Economy ISSUE Source: Federal Bureau of Investigation; United Health Foundation, America’s Health Rankings 2014 CRIME FACTS Violent Crimes per 100,000 People in 2014 Oklahoma’s violent crime rate decreased by 9.0% between 2013 and 2014. The U.S. rate of violent crime only dropped 1.0% during the same period. 365.5 406 ENVIRONMENTAL FACTORS Oklahoma’s air pollution is considered the 18th worst in the nation. 10.3 6.8 8.8 10.0 7.1 9.7 10.2 9.9 AIR POLLUTION (MICROGRAMS OF FINE PARTICLES PER CUBIC METER) 10
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UNHEALTHY BEHAVIORS (PERCENTAGE OF ADULT POPULATION) Oklahoma U.S. Average QUALITY OF LIFE An Overview of Oklahoma’s Economy Source: Campaign for Tobacco Free Kids; IntegrisOK; United Health Foundation, America’s Health Rankings 2015 HEALTH BEHAVIORS OKLAHOMA’S ADULT OBESITY RATE (33.0%) IS THE 6TH HIGHEST IN THE NATION. Oklahoma spent an estimated $1,721,000,000 on health care directly related to obesity in 2009. FISCAL IMPACT FACT OKLAHOMA’S PERCENTAGE OF ADULT SMOKERS (21.1%) IS THE 11TH HIGHEST IN THE NATION. FACT Oklahoma residents’ state and federal tax burden from smoking-caused government expenditures = $923 per household FISCAL IMPACT 33.0% 29.6% 28.3% 21.1% 22.6% 18.1% 11
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Chapter 2 OKLAHOMA’S BUSINESS CLIMATE While Oklahoma provides a more competitive business climate than in the past, there is more work that needs to be done. In CNBC’s America’s Top States for Business 2015, Oklahoma’s overall rank dropped from 28th in 2014 to 31st. This is due to Oklahoma’s rank dropping in five of the ten categories. The largest drop came in the “Cost of Doing Business” category, in which Oklahoma dropped from 1st to 9th. This section examines some of the issues that are most pressing for Oklahoma businesses, including taxation, workers’ compensation, innovation, and legal reform. 12
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TAXATION Oklahoma’s Business Climate Source: Tax Foundation SNAPSHOT OF OKLAHOMA’S TAXES This page provides a broad overview of Oklahoma’s tax rates and tax collections. Note: For all rankings on this page, 1 indicates the highest among the 50 states. Oklahoma received the largest share of state and local combined collections in 2013 from sales taxes (33.5% of total), followed by individual income taxes (21.7%) and property taxes (17.0%). The Oklahoma sales tax share is higher than the U.S. average, and the property tax is lower. Individual Income Tax Number of brackets 6 Top income tax rate 5.00% Top bracket kick-in $7,200 Bottom income bracket rate 0.50% Bottom bracket kick-in $1 Collections per capita $761 Collections rank 33 Corporate Income Tax Number of brackets 1 Corporate tax rate 6% Collections per capita $153 Collections rank 18 Property Tax Collections per capita $603 Collections rank 49 Property taxes paid as share of owner-occupied housing value 0.86% Property taxes paid rank 29 Sales Tax State rate 4.50% State + average local rate 8.78% State + average local rank 6 Collections per person $1,133 Collections rank 15 Excise Taxes Rate Rank Gasoline taxes and fees $0.17 per gallon 47 Cigarette taxes $1.03 per pack 30 Spirits taxes $5.56 per gallon 25 Beer taxes $0.40 per gallon 15 Cell phone taxes 9.87% 25 Other Taxes Rate Gross receipts tax None Capital stock tax 0.125% Inheritance tax None Estate tax None 13
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TAXATION Oklahoma’s Business Climate Source: U.S. Census Bureau Note: Percentages may not add to 100 due to rounding. PERCENT OF TOTAL COMBINED STATE AND LOCAL TAX COLLECTIONS BY TAX TYPE, UNITED STATES (2013) Property Taxes 31.3% Sales Taxes 22.5% Excise Taxes 11.6% Individual Income Tax 23.3% Corporate Income Tax 3.6% Other Taxes 7.7% 31.3% 22.5% 23.3% 3.6% 7.7% 11.6% PERCENT OF TOTAL COMBINED STATE AND LOCAL TAX COLLECTIONS BY TAX TYPE, OKLAHOMA (2013) Property Taxes 17.0% Sales Taxes 33.5% Excise Taxes 11.3% Individual Income Tax 21.7% Corporate Income Tax 4.3% Other Taxes 12.1% 17.0% 33.5% 21.7% 4.3% 12.1% 11.3% 14
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TAXATION Oklahoma’s Business Climate Source: Tax Foundation, 2016 State Business Tax Climate Index STATE BUSINESS TAX CLIMATE Oklahoma ranks 33rd out of 50 in the State Business Tax Climate Index (2016) The State Business Tax Climate Index assesses how well-structured each state’s tax code is for business. Oklahoma’s tax code is more favorable for business in some categories, but not others. State Overall Index Rank Corporate Tax Individual Income Tax Sales Tax Property Tax Texas 10 41 6 37 34 Missouri 17 3 28 23 8 Colorado 18 15 16 44 12 Kansas 22 40 18 32 19 Oklahoma 33 8 40 38 18 New Mexico 35 27 34 48 1 Arkansas 38 42 29 43 27 Note: A rank of 1 indicates the state’s tax system is more favorable for business; a rank of 50 indicates the state’s tax system is less favorable for business. Oklahoma slipped from an overall ranking of 32nd last year to 33rd this year. Our state scores low in the individual income tax and sales tax categories. Our low ranking in the sales tax category is due to Oklahoma having the sixth highest combined state and average local tax rate in the nation at 8.78% 15
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COMBINED STATE & AVERAGE LOCAL SALES TAX RATES (Midyear 2015) TAXATION Oklahoma’s Business Climate Source: Tax Foundation, Combined State & Average Local Sales Tax Rates (Midyear 2015) 16
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BUSINESS TAXES Oklahoma’s Business Climate Source: Council on State Taxation, Total State and Local Business Taxes: State-by-State Estimates for Fiscal Year 2014; Tax Foundation In order to attract new companies to Oklahoma, and keep the ones we have, it is necessary to make our tax code more attractive to businesses. OBJECTIVE Oklahoma collected $7.2 billion in total state and local business taxes in 2014. In 2014, Oklahoma collected 30.6% of revenue from businesses through the sales tax and 5.5% of revenue from businesses through the corporate income tax. The capital stock tax is a business tax imposed at a low rate but directly on business capital. Oklahoma levies a capital stock tax with a rate of 0.125% and a maximum payment amount of $20,000. Some states have lower maximum payment amounts such as Georgia ($5,000), Nebraska ($11,995), and Alabama ($15,000). BY THE NUMBERS STATE AND LOCAL BUSINESS TAXES, BY TYPE, FY2014 ($BILLIONS) *Corporate income and individual income tax on business income include gross receipts taxes levied in Texas. State Property Tax Sales Tax Excise Tax Including Public Utilities & Insurance Corporate Income & Individual Income Tax on Business Income* Unemployment Insurance Tax License and Other Taxes Total Business Taxes Arkansas $1.1 $1.5 $0.5 $0.7 $0.4 $0.4 $4.5 Colorado $4.9 $2.6 $1.0 $1.3 $0.7 $0.7 $11.3 Kansas $2.5 $1.6 $0.6 $0.3 $0.4 $0.4 $5.9 Missouri $3.3 $2.2 $0.7 $1.0 $0.6 $0.8 $8.7 New Mexico $0.9 $1.9 $0.4 $0.3 $0.2 $1.2 $4.9 Oklahoma $1.5 $2.2 $0.8 $0.9 $0.5 $1.2 $7.2 Texas $29.2 $18.1 $7.9 $4.7 $2.6 $12.9 $70.7 United States $250.6 $142.8 $84.0 $98.2 $48.7 $64.4 $688.7 $7.2 billion Total Business Taxes 17
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BUSINESS TAXES Oklahoma’s Business Climate Source: Council on State Taxation, Total State and Local Business Taxes: State-by-State Estimates for Fiscal Year 2014 COMPOSITION OF OKLAHOMA’S STATE AND LOCAL BUSINESS TAXES, FY2014 Property Taxes 20.7% Sales Taxes 30.6% Excise Taxes 10.8% Corporate Income Tax 5.5% Unemployment Insurance Tax 7.6% Individual Income Tax on Pass-through Income 7.6% License and Other Taxes* 17.1% 20.7% 30.6% 5.5% 7.6% 7.6% 17.1% 10.8% * Taxes categorized under “other” include death and gift taxes, documentary and state transfer taxes, severance taxes, and local gross receipts taxes. 18
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Oklahoma’s Business Climate We need to keep Oklahoma’s unemployment insurance tax system competitive with the other states in our region. OBJECTIVE Source: U.S. Department of Labor, Employment and Training Administration, UI Data Summary UNEMPLOYMENT INSURANCE TAXES (2014) UNEMPLOYMENT INSURANCE TAXES Overall Rank State Tax on Average Full-Time Employee Tax Rate Taxable Wage Base United States $399 3.01 $13,258 25 Arkansas $378 3.15 $12,000 26 New Mexico $370 1.58 $23,400 31 Oklahoma $307 1.64 $18,700 32 Colorado $303 2.59 $11,700 34 Missouri $282 2.17 $13,000 40 Texas $236 2.62 $9,000 43 Kansas $194 2.43 $8,000 Between 2013 and 2014, Oklahoma’s unemployment insurance taxes on average, full-time employees decreased by $147. Oklahoma’s UI tax is now less than the U.S. average. UI TAX ON AVERAGE FULL-TIME EMPLOYEE $399 $236 $307 $282 $194 $303 $378 $370 19
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Oklahoma’s Business Climate Even with the passage of Senate Bill 1062 in 2013, we must continue to work on lowering the costs of workers’ compensation claims and making Oklahoma’s workers’ compensation system one of the best in the nation. OBJECTIVE Source: National Council on Compensation Insurance, Oklahoma State Advisory Forum 2015 WORKERS’ COMPENSATION In previous years, more than 50% of Oklahoma’s total workers’ compensation costs were spent on indemnity versus medical. Today, the breakdown is: • Indemnity - 46% • Medical - 54% Between 2013 and 2014, Oklahoma’s workers’ compensation direct written premiums dropped from $972 million to $893 million, which is the lowest volume since 2011. Oklahoma’s loss cost level has decreased 37.2% since January 2014. BY THE NUMBERS OKLAHOMA’S LOSS COST LEVEL CHANGES 1/1/2011 1.7% -1.7% 0.4% -14.6% -7.8% -14.8% 1/1/2012 1/1/2016 1/1/2015 1/1/2014 1/1/2013 $79,000,000 DROP 20
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Oklahoma’s Business Climate COURTS Source: U.S. Chamber Institute for Legal Reform, 2015 Lawsuit Climate Survey: Ranking the States A state’s litigation environment continues to be important to businesses, so it is essential that we work to create a fair and balanced legal system in Oklahoma. OBJECTIVE While Oklahoma has improved in the “Damages” key element category, our state ranks low in some of the other categories, including: • Judges’ Competence - 39th • Judges’ Impartiality - 41st • Treatment of Class Action Suits and Mass Consolidation Suits - 39th 75% of survey respondents reported that a state’s litigation environment is likely to impact important business decisions at their companies such as where to locate or to do business. The top 3 issues mentioned as creating the least fair and reasonable litigation environment include: 1. Biased/partial judgment 2. Corrupt/unfair system 3. Poor quality of jury/judges The U.S. Chamber Institute for Legal Reform’s Ranking the States report explores how reasonable and balanced the states’ tort liability systems are perceived to be by U.S. businesses. Oklahoma’s overall ranking improved 9 places from 42nd in 2012 to 33rd in 2015. 2015 LAWSUIT CLIMATE SURVEY State 2015 Rank 2012 Rank Colorado 16 23 Kansas 19 5 Oklahoma 33 42 Texas 40 36 Arkansas 41 35 Missouri 42 34 New Mexico 45 44 2015 Lawsuit Climate Survey Rankings 21
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Oklahoma’s Business Climate Source: National Science Foundation; U.S. Bureau of Labor Statistics; U.S. Census Bureau; U.S. Small Business Administration INNOVATION Oklahoma is losing ground to other states in attracting research and development companies. ISSUE Rank State Total R&D Spending (in millions) R&D Spending Per Capita Rank 3 Texas $20,623 $804 29 18 Colorado $6,862 $1,340 14 20 New Mexico $6,070 $2,921 3 30 Kansas $2,081 $725 31 35 Oklahoma $1,207 $319 45 40 Arkansas $678 $231 47 United States $395,442 $1,269 RESEARCH & DEVELOPMENT SPENDING (2011) R&D Funding/Spending The federal government’s obligations for research and development in Oklahoma dropped from $450 million in 2012 to $262 million in 2013. Oklahoma’s $262 million is only 0.24% of the U.S. total, which gives us a ranking of 39th. In 2011, Oklahoma’s total research and development spending was $1,207,000,000, which was the 35th most in the nation. Oklahoma’s R&D spending per capita was $319, which was the 6th lowest in the nation. In 2014, the amount of Small Business Innovation Research (SBIR) grants awarded to Oklahoma, in dollars per worker, was $2.19. Only five states rank lower. 22
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Oklahoma’s Business Climate Source: National Science Foundation; U.S. Bureau of Labor Statistics; U.S. Census Bureau; U.S. Patent and Trademark Office INNOVATION PATENTS Oklahoma ranks 33rd in the number of patents issued (628) in 2014. At only 162 patents issued per one million people, Oklahoma ranks 41st. SCIENCE AND ENGINEERING DOCTORATES Oklahoma ranks 46th in the number of employed science and engineering doctorates per 1,000 workers (2.84). 2.37 6.24 3.22 4.05 9.98 2.84 3.82 PH.D. SCIENTISTS AND ENGINEERS (# EMPLOYED PH.D. PER 1,000 WORKERS, 2013) 259 445 628 1,036 1,419 3,555 10,692 PATENTS ISSUED (2014) 23
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Chapter 3 OKLAHOMA’S INFRASTRUCTURE Oklahoma’s infrastructure has improved over the past few years. Our number of deficient bridges has decreased, and some of our most traveled roads have been improved. In CNBC’s Top States for Business 2015, Oklahoma’s rank in the “Infrastructure” category jumped from 33rd in 2014 to 17th in 2015. The following pages examine some of the most critical aspects of our state’s infrastructure, including roads and bridges, aviation, water, oil and natural gas, and wind power. 24
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Infrastructure Transportation ROADS & BRIDGES Source: Federal Highway Administration; Oklahoma Department of Transportation; TRIP HIDDEN COST OF BAD ROADS (2015) ROAD CONDITIONS Well maintained transportation infrastructure and bridges are vital to support Oklahoma commerce, job creation and economic growth. ISSUE Thirty-eight percent of Oklahoma’s major roads are in poor condition, compared to the U.S. average of 18%. In Oklahoma, 27% of rural pavements are in poor condition, which is the 7th highest percentage in the nation. Driving on roads in need of repair costs each Oklahoma motorist $763 a year in extra vehicle repairs and operating costs, which is the most in the nation. 25
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Infrastructure Transportation ROADS & BRIDGES Source: American Society of Civil Engineers; Federal Highway Administration; Oklahoma Department of Transportation; TRIP Between 2010 and 2014, Oklahoma’s number of structurally deficient bridges was reduced by 47.3%. In Oklahoma, 23.3% of bridges are structurally deficient or functionally obsolete. Nineteen percent of Oklahoma’s rural bridges are considered structurally deficient, which is the 5th most in the country. The average age of bridges in Oklahoma is 44.6 years old while the U.S. average bridge age is 42 years. Most bridges are designed to last 50 years. As of 2010, 10,922 of Oklahoma’s bridges were over 50 years old. BAD NEWS GOOD NEWS BRIDGES FAST FACTS 112,940 Miles of Public Roads 933 Miles of Interstate 23,049 Bridges 5,362 Deficient Bridges 47,872,000,000 Miles Traveled on Oklahoma Roads (2012) 45% Vehicle travel on Oklahoma’s highways increased by 45% from 1990 to 2013 26
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ROADS & BRIDGES Source: U.S. Census Bureau; U.S. Department of Transportation Rank State Total Per Capita Capital Per Capita Rank Maintenance Per Capita Rank 11 Arkansas $497.32 $409.50 9 $87.81 18 14 Texas $416.88 $341.27 14 $75.61 23 18 Oklahoma $366.44 $314.87 16 $51.57 34 United States $305.04 $235.39 $69.66 30 Kansas $287.70 $234.32 28 $53.38 33 33 Colorado $268.24 $180.11 42 $88.13 17 38 Missouri $256.19 $181.07 39 $75.12 24 46 New Mexico $215.34 $196.40 37 $18.94 50 STATE EXPENDITURES ON ROADWAYS (2013) TOTAL PER CAPITA SPENDING ON ROADWAYS $479.32 $268.24 $287.70 $256.19 $215.34 $366.44 $416.88 $305.04 Infrastructure Transportation Between 2011 and 2013, Oklahoma’s total per capita spending on roadways dropped $160.91, which is a 30.5% decrease. 27
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RAIL Source: Association of American Railroads Infrastructure Transportation Freight railroads are an important part of Oklahoma’s infrastructure that we must continue to support and utilize. ISSUE RAIL FACTS One train can carry as much freight as several hundred trucks. It would have taken approximately 16.5 million additional trucks to handle 297.1 million tons of freight that moved in Oklahoma by rail in 2012. Oklahoma ranks 17th nationally by mileage with 3,273 freight railroad miles. Oklahoma has 19 freight railroads, which is the 16th most in the nation. In 2013, America’s railroads moved a ton of freight an average of 473 miles on one gallon of fuel. That’s like going from Oklahoma City to Memphis. On average, railroads are four times more fuel efficient than trucks. Moving freight by rail instead of truck reduces greenhouse gas emissions by 75%. OKC MEMPHIS 473 MILES 17TH FREIGHT RAILROAD MILEAGE 16TH MOST FREIGHT RAILROADS 28
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RAIL Source: Association of American Railroads Infrastructure Transportation Stone, Sand, Gravel 50.9% Chemicals 14.7% Farm Products 9.4% Paper, Waste, Scrap 8.8% Products of Petroleum Refining 3.7% Other 12.5% RAIL TRAFFIC ORIGINATED IN OKLAHOMA (2012) 50.9% 14.7% 8.8% 3.7% 12.5% 9.4% COMMODITIES SHIPPED BY RAIL Coal accounted for 38% of electricity generation in Oklahoma in 2012, and nearly all of that coal was delivered by railroads. Stone, sand, and gravel accounted for the largest percentage (50.9%) of freight tons that originated in Oklahoma in 2012. The 9,313,000 tons that originated here made up 8.4% of the U.S. total for that commodity. Coal accounted for the largest percentage (56.9%) of freight tons that terminated in Oklahoma in 2012. Coal 56.9% Stone, Sand, Gravel 11.2% Food Products 4.2% Crude Oil 4.0% Farm Products 3.8% Other 19.9% RAIL TRAFFIC TERMINATED IN OKLAHOMA (2012) 56.9% 11.2% 4.0% 3.8% 19.9% 4.2% 29
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PORTS/WATERWAYS Source: Tulsa Port of Catoosa; U.S. Department of Transportation Infrastructure Transportation Oklahoma’s ports and waterways are an essential piece of our state’s infrastructure that connect Oklahoma businesses to the world. ISSUE The Tulsa Port of Catoosa is a combination of a multi-modal shipping complex and a 2,000 acre industrial park resulting in an economic impact of $300 million to Oklahoma. The complex hosts roughly 60 companies and employs nearly 4,000 Oklahomans. Oklahoma has 150 miles of inland waterways. 150 MILES of inland waterways. More than 2.7 million tons of waterborne cargo shipped through the Port of Catoosa in 2013. FAST FACTS The Tulsa Port of Catoosa is located at the head of the McClellan-Kerr Arkansas River Navigation System, which is a 440-mile waterway linking Oklahoma and the surrounding five-state area with ports on the nation’s 25,000-mile inland water transport system. The system is the nation’s most inland all-weather waterway. 30
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PORTS/WATERWAYS Source: Tulsa Port of Catoosa; U.S. Department of Transportation Infrastructure Transportation BENEFITS OF BARGE SHIPPING 514 MILES 202 MILES 59 MILES BARGE RAIL TRUCK A full tow on the McClellan-Kerr Arkansas River Navigation System consists of eight barges, lashed tightly together and pushed from behind by a single towboat. With each barge holding 1,400 to 1,500 tons of material, a full complement of eight barges carries the equivalent of 480 semi-trailer trucks. = ONE GALLON OF FUEL CAN CARRY ONE TON: Bulk freight can be moved by barge for 1/3 the cost of railroad and 1/5 the cost of truck. On the waterway, you can transport three bushels of grain from Tulsa to the Gulf Coast for the price of a first-class postage stamp. 31
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AVIATION Source: American Society of Civil Engineers; Bureau of Transportation Statistics; Federal Aviation Administration; FlyOKC; Oklahoma Aeronautics Commission; Tulsa International Airport Infrastructure Transportation FAST FACTS • Oklahoma has 139 public use airports; 49 of them are considered regional business airports. • Forty-three of Oklahoma’s regional business airports have jet capable runways (5,000 feet of longer). • About 93% of Oklahomans live within 25 miles of an airport with a jet capable runway. • Oklahoma is one of seven hubs or centers in the world for the maintenance, repair, and overhaul of aircraft. • Tinker Air Force Base is the largest military aircraft repair facility in the world. • The FAA’s Mike Monroney Aeronautical Center in Oklahoma City serves as the central nerve center for the nation’s air transportation system, employing more than 7,000 Oklahomans. ECONOMIC IMPACT General aviation contributes more than $150 billion annually to the U.S. economy, including $1.2 billion in Oklahoma. The aerospace industry is responsible for 120,000 direct, indirect, and induced jobs in Oklahoma, which represents approximately one out of every 11 Oklahomans. The average salary of an Oklahoman working in the state’s aerospace industry is more than $63,000. The salary is $22,000 more than the state average. Oklahoma’s aerospace industry generates $12.5 billion economic output annually, which is 10% of the state’s total output. Tinker Air Force Base is the state’s largest single-site employer with approximately 26,000 jobs and an annual economic impact of more than $4 billion. The American Airlines Maintenance and Engineering Center in Tulsa is the world’s largest commercial aircraft repair facility, employing 6,000 people. Oklahoma’s aviation and aerospace industry is a large contributor to our state’s economy, and it is imperative that we continue to boost the competitiveness of aviation and aerospace companies doing business in Oklahoma. ISSUE 2014 Passenger Flow Number of Nonstop Airports Serviced Tulsa International Airport 2,742,000 18 Will Rogers World Airport 3,834,009 21 OKLAHOMA COMMERCIAL AIRPORT STATISTICS 32
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WATER Source: Oklahoma Water Resources Board Oklahoma’s Infrastructure Water is a critical resource for Oklahoma’s people and businesses. Without proper permitting procedures, water conservation and reuse efforts, and water quality and quantity monitoring, beneficial use of Oklahoma’s water resources will be severely limited. ISSUE WATER SOURCES GROUNDWATER SURFACE WATER WATER PERMITS The approximate number of stream water permits on file with OWRB is 2,600. The approximate total allocated stream water use in Oklahoma is 2.6 million acre-feet/year. OWRB forecasted that there will be insufficient surface water permit availability in 22 basins to meet projected surface water demands in 2060. The approximate number of groundwater permits on file with OWRB is 10,000. The approximate total allocated groundwater use in Oklahoma is 3.2 million acre-feet/year. Oklahoma has 22 major groundwater basins containing approximately 390 million acre-feet of water in storage, though only one-half of that amount may be recoverable. Oklahoma has approximately 55,646 miles of shoreline along lakes and ponds. Oklahoma contains approximately 1,401 square miles of water area in its lakes and ponds, which is larger than the state of Rhode Island. Oklahoma’s longest river is the Beaver/ North Canadian River (752 miles). The Red River is the second longest (570 miles). Oklahoma’s largest lakes in conservation storage: • Texoma = 2.6 million acre-feet of water • Eufaula = 2.3 million acre-feet of water The Ogallala Aquifer in western Oklahoma is the state’s largest groundwater basin, and it contains 90 million acre-feet of supply, which is enough to cover the entire state two feet deep. 33
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WATER Source: Oklahoma Energy Resources Board; Oklahoma Water Resources Board Oklahoma’s Infrastructure WATER USE Public Use 41% Irrigation 32% Livestock and Agriculture 12% Other 13% Oil & Natural Gas Industry 2% OKLAHOMA WATER USE 41% 32% 12% 13% 2% In 2007, 1,814,762 acre-feet of water was withdrawn for all uses. • 56% from surface water sources • 44% from groundwater sources While significant growth is anticipated in the state’s oil and natural gas industry, it is only projected to account for 5% of Oklahoma’s total water demand in 2060. Surface water accounts for 54% of public water supply. Each year, approximately 10.5 million acre-feet of water flows into Oklahoma through its two major river basins, the Red and Arkansas. An average of almost 36 million acre-feet flows out of the state each year. 34
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WATER Source: American Society of Civil Engineers; Oklahoma Water Resources Board Oklahoma’s Infrastructure WATER INFRASTRUCTURE Water and wastewater infrastructure investment is critical to sustain and increase Oklahoma’s economic growth and quality of life. In their 2013 Report Card for Oklahoma’s Infrastructure, the American Society of Civil Engineers gave Oklahoma a D+ in the Water and Wastewater infrastructure category primarily due to a lack of access to adequate funding to meet the infrastructure needs. As of 2007, approximately 50% of Oklahoma’s water treatment plants were 30 years or older. Approximately one-third of drinkable water is lost due to aging water infrastructure. OVER THE NEXT 50 YEARS, THE NEED FOR WATER INFRASTRUCTURE WILL BE SIGNIFICANT. $44 BILLION Wastewater Infrastructure $38 BILLION Drinking Water Infrastructure 35
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Source: Oklahoma Energy Resources Board; U.S. Energy Information Administration, Rankings: Natural Gas Marketed Production, 2014 OIL & NATURAL GAS Infrastructure Energy The ongoing transformation of Oklahoma’s oil and natural gas industry has important implications for our state’s economy, and we must work to positively influence growth in the industry going forward. • Oklahoma ranks 5th in the nation in crude oil production. • In 2013, Oklahoma oil production accounted for more than 4% of U.S. onshore production. Only Texas, North Dakota, California, and Alaska produced more. • Oklahoma has five petroleum refineries with a combined capacity of more than 200,000 barrels per day, which is roughly 3% of the total U.S. capacity. In 2013, 7% of America’s natural gas production occurred in Oklahoma. Oklahoma ranks 3rd in the nation in natural gas marketed production. Approximately three-fifths of Oklahoma households use natural gas as their primary energy source for home heating. 7% 3RD NATURAL GAS BY THE NUMBERS OIL FACTS ECONOMIC IMPACT 1 in 5 jobs in Oklahoma are directly or indirectly supported by the oil and natural gas industry. That is 465,616 workers. The average Oklahoma oil and natural gas worker makes more than $133,000 a year. Since 2010, Oklahoma’s oil and natural gas industry has added nearly 15,000 jobs. Annual operations from Oklahoma’s oil and natural gas industry generate $65 billion in goods and services. That is one out of every $3 in gross state product. Oklahoma’s oil and natural gas producers paid $325 million to local school districts in 2013, in addition to nearly $150 million to student aid, higher education capital and common education technology funds. Oklahoma’s oil and natural gas producers have given more than $1.75 million in OERB Petroleum Scholarships, which supports hundreds of Oklahoma college students majoring in petroleum- related fields. OBJECTIVE 36
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Source: American Wind Energy Association; Oklahoma Renewable Energy Council; State Chamber of Oklahoma Research Foundation, Wind Energy Industry Impacts in Oklahoma WIND POWER Infrastructure Energy While the wind industry plays a vital role in the development of our state, we must continue to make strides in developing Oklahoma’s wind power potential. Oklahoma’s wind power is capable of meeting more than thirty times the state’s current electricity needs. Oklahoma has the wind power resource potential to serve almost 10% of the nation’s electricity needs. In 2014, wind energy provided 16.87% of all in-state electricity production, which is equivalent to powering 1.1 million homes. 10% 30x WIND BY THE NUMBERS 1.1 MILLION Homes • Generating wind power creates no emissions and uses virtually no water. • Annual state water consumption savings: 3.5 billion gallons • Equivalent number of water bottles saved: 26.6 billion • Annual state carbon dioxide (CO2) emissions avoided: 6.9 million metric tons • Equivalent cars worth of emissions avoided: 1.5 million ENVIRONMENTAL BENEFITS $1.2 BILLION Wind power saved electricity customers $1.2 billion in 2013. 4,001 to 5,000 2014 direct and indirect jobs supported by the wind industry SEVEN There are seven active manufacturing facilities in Oklahoma that produce products for the wind industry. ECONOMIC IMPACT WIND PROJECTS 5,184 MW Oklahoma ranks 4th for installed wind capacity. 2,790 TURBINES Oklahoma ranks 4th for number of wind turbines. 695 MW Wind capacity under construction in Oklahoma. OBJECTIVE 37
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Chapter 4 EDUCATION & WORKFORCE DEVELOPMENT Oklahoma’s education system continues to underperform. We fall behind most states in terms of national test scores, remediation rates, and education spending. Our state also fares poorly in terms of four year college graduation rates. This section delves into many aspects of education and workforce development in Okla homa. Some of the topics include testing, college readiness, postsecondary education, and education finance. 38
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Source: Education Week Research Center; Oklahoma State Department of Education SCHOOLS Education & Workforce Development Oklahoma’s K-12 education system is considered one of the worst in the nation. It is imperative that we improve our schools and give more students a chance to succeed. A-F REPORT CARDS • Overall, Oklahoma’s public schools earned lower grades in 2014-15 than they did in 2013-14. • The number of schools earning an A+ dropped from 89 to 68, and the number of schools with F’s also dropped. A B C D F 2013-2014 (%) 16.1% 26.4% 28.1% 16.7% 11.1% 2014-2015 (%) 11.9% 27.6% 30.0% 18.6% 10.2% Difference -4.2% 1.2% 1.9% 1.9% -0.9% OKLAHOMA PUBLIC SCHOOL A-F GRADES Note: Percentages may not add up to 100 due to schools that were given a grade of N/A being excluded from this chart. STATEWIDE REPORT CARD Education Week publishes an annual Quality Counts report, which grades states based on K-12 achievement, school finance, and other education factors. In the Quality Counts 2016 report, Oklahoma was given the fifth lowest grade of 68.2 (D+). The U.S. average grade is 74.4 (C). Oklahoma’s highest score (72.6) was in the “Chance for Success” category, and our lowest score (66.0) was in the “School Finance” category. OBJECTIVE 39
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Source: National Center for Education Statistics, Digest of Education Statistics; Oklahoma State Department of Education; U.S. Census Bureau In 2012-13, Oklahoma had 520 school districts, which was the ninth most in the nation. Ten states have 500 school districts or more. Of those 10 states, eight of them are ranked in the top 11 in terms of state population. Oklahoma is the 28th most populous state. SCHOOL DISTRICTS Oklahoma had 32 school districts with fewer than 100 students and 290 school districts with fewer than 500 students in FY15. FACT: Oklahoma currently has 516 school districts. Number of School Districts by State CLASS SIZE FACT: Oklahoma’s average elementary and secondary class sizes are smaller than the national average. SCHOOLS Education & Workforce Development AVERAGE CLASS SIZE (2011-12) 20.7 23.7 21.2 26.8 Oklahoma U.S. Average Texas 1,029 Missouri 521 Kansas 309 Arkansas 238 Colorado 178 New Mexico 89 40
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Source: Oklahoma State Department of Education TESTING Education & Workforce Development Low national test scores show that Oklahoma’s student population is unprepared for postsecondary education and the workforce. ISSUE Grade Math Reading Science Geography Social Studies/ U.S. History Writing Grade 3 Fed/State Fed/State Grade 4 Fed/State Fed/State Grade 5 Fed/State Fed/State Fed/State State State Grade 6 Fed/State Fed/State Grade 7 Fed/State Fed/State State Grade 8 Fed/State Fed/State Fed/State State State OCCT GENERAL ASSESSMENTS FOR GRADES 3-8 TESTING REQUIREMENTS (UNDER NO CHILD LEFT BEHIND ACT) ACE Algebra I ACE English II ACE Biology I ACE U.S. History ACE Algebra II ACE Geometry ACE English III Fed/State Fed/State Fed/State State State State State OCCT GENERAL ASSESSMENTS (END-OF-INSTRUCTION) READING SUFFICIENCY ACT Under the Reading Sufficiency ACT (RSA), third-grade students who score “Unsatisfactory” on the assessment and fail to meet an exemption are subject to retention for intensive remediation in reading. Students who score “Limited Knowledge” are not automatically held back, but must receive reading remediation in fourth grade. Only 85.4% of Oklahoma third- graders were promoted to the fourth grade after taking the 2015 OCCT reading test. Results of the test are as follows: • Unsatisfactory: 14.6% • Limited Knowledge: 15.9% • Proficient: 67.0% • Advanced: 2.5% The test results show that 15,292 Oklahoma 3rd graders are reading below grade level. 41
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Source: Oklahoma State Department of Education TESTING Education & Workforce Development Test Total Valid Test Scores Advanced Proficient Limited Knowledge Unsatisfactory ACE Algebra I 45,982 28% 48% 14% 10% ACE English II 42,919 22% 59% 13% 5% ACE Biology I 42,703 14% 33% 23% 30% ACE U.S. History 39,018 30% 42% 13% 15% ACE Geometry 38,514 33% 46% 16% 6% ACE Algebra II 30,718 23% 51% 15% 11% ACE English III 33,478 18% 69% 6% 7% EOI TEST RESULTS (2015 SPRING ADMINISTRATION) Test Total Valid Test Scores Advanced Proficient Limited Knowledge Unsatisfactory Grade 3 Reading 51,247 2% 67% 16% 15% Grade 3 Math 51,372 22% 40% 22% 16% Grade 4 Reading 46,578 4% 66% 15% 15% Grade 4 Math 46,704 27% 45% 18% 10% Grade 5 Science 48,502 19% 35% 24% 22% Grade 5 Social Studies 48,468 43% 30% 14% 13% Grade 8 Reading 47,130 16% 59% 12% 13% Grade 8 Math 36,911 11% 42% 26% 21% OCCT TEST RESULTS (2015 SPRING ADMINISTRATION) Two types of general assessments are given to Oklahoma students: Oklahoma Core Curriculum Tests (OCCT) are criterion referenced tests intended for Grades 3-8 in various subject areas. The seven End of Instruction (EOI) tests are offered at the secondary level. STATE TESTING 42
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Source: National Center for Education Statistics, The Nation’s Report Card; Oklahoma State Department of Education TESTING Education & Workforce Development One strong indicator of student progress is the internationally-benchmarked National Assessment of Educational Progress (NAEP) test. The NAEP is considered the gold standard of student assessments for comparisons across state lines and also presents a more rigorous assessment of student performance. More than twice as many students are labeled proficient on the Oklahoma state exam as meet the proficient standard on the National Assessment of Educational Progress. This discrepancy has been labeled the “honesty gap.” NAEP SCORES NAEP eighth grade math test results: • Oklahoma - 23% proficient • United States - 32% proficient NAEP fourth grade math test results: • Oklahoma - 37% proficient • United States - 39% proficient Difference in 2015 fourth grade reading test results: • NAEP - 33% proficient • OCCT - 70% proficient NAEP 4TH GRADE MATH (% PROFICIENT) NAEP 4TH GRADE READING (% PROFICIENT) NAEP 8TH GRADE MATH (% PROFICIENT) NAEP 8TH GRADE READING (% PROFICIENT) Oklahoma U.S. Average 2015 32% 23% 43
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Source: ACT, 2015 ACT National and State Scores; College Board, The 10th Annual AP Report to the Nation TESTING Education & Workforce Development AP TESTING In 2013, 11.0% of Oklahoma public high school graduates scored a 3 or higher on an AP Exam during high school. THAT’S COMPARED TO: Percentage of 2013 high school graduates that took an AP Exam during high school: • Oklahoma - 22.1% • United States - 33.2% Colorado 24.4% United States 20.1% Texas 18.5% Arkansas 16.0% New Mexico 12.0% Kansas 10.5% Missouri 9.5% The AP Honor Roll recognizes and honors those outstanding school districts that simultaneously increase access to Advanced Placement course work while increasing the percentage of students earning scores of 3 or higher on AP Exams. Oklahoma currently has ZERO AP Honor Roll districts. ACT In 2015, Oklahoma’s average ACT composite score of high school graduates tested was 20.7. Only 17 states had lower scores. The national average is 21.0. Percent of Graduates Tested Average Composite Score Average English Score Average Math Score Average Reading Score Average Science Score Oklahoma 80% 20.7 20.1 19.8 21.5 20.7 United States 59% 21.0 20.4 20.8 21.4 20.9 ACT TEST SCORES (2015) 33.2% 22.1% 44
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Source: Oklahoma Educated Workforce Initiative, Oklahoma’s Business Case for Education Reform; U.S. Department of Education HIGH SCHOOL Education & Workforce Development High school graduation is a key indicator on the road to success, and many Oklahoma students don’t meet it. We must make sure students in Oklahoma are graduating high school, and when they do are prepared to head to postsecondary education or into a career. HIGH SCHOOL GRADUATION OUR BROKEN PIPELINE Students starting high school in Oklahoma are less likely than their peers in four of the six bordering states to earn a high school degree. -U.S. Department of Education Only 8.6% of the students who entered kindergarten will have successfully graduated college in four years. Allowing a couple of extra years for graduation, only 16.5% of the students who entered kindergarten will have successfully graduated college in six years. Without a high school diploma, students will earn an average of $10,000 less per year than their better-educated peers. Oklahoma’s high school graduation rate in 2012-13 was 84.8%. Oklahoma high schools lose almost one-quarter of their students between 9th grade and graduation. OBJECTIVE 45
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Source: ACT, The Condition of College and Career Readiness 2015; Oklahoma Educated Workforce Initiative, Oklahoma’s Business Case for Education Reform; Oklahoma State Regents for Higher Education, Remediation Report, October 2015 COLLEGE READINESS Education & Workforce Development With a large percentage of Oklahoma high school students not academically ready for college, it is clear we must do more to give every student a shot at success. ISSUE COLLEGE READINESS Only 22% of Oklahoma students earned “college-ready” scores on all four sections of the ACT exam. REMEDIATION Students who score below 19 on any subject area of the ACT may need to take remedial courses for that subject. During the 2013-14 school year, 39.1% of fall, first-time freshmen direct from Oklahoma high schools were enrolled in at least one remedial class at Oklahoma public colleges and universities. Nationally, only 32% of college freshmen must take remedial coursework. The “cost of remediation” per student runs as much as $2,000 in community colleges and $2,500 in four-year universities. PERCENT OF 2015 ACT -TESTED HIGH SCHOOL GRADUATES MEETING ACT COLLEGE READINESS BENCHMARKS BY SUBJECT 64% 47% 64% 46% 42% 34% 33% 22% 38% 28% Oklahoma U.S. Average 19 46
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Source: Oklahoma State Regents for Higher Education HIGHER EDUCATION Education & Workforce Development Increasing the number of Oklahomans with a college degree is crucial for our state’s future economic prosperity. ISSUE FACT: Oklahoma residents pay an average of $1,640 less annually in tuition and mandatory fees for an undergraduate education than their peers in other states. ACCESS TO HIGHER EDUCATION FACT: The Oklahoma State System of Higher Education is comprised of 25 colleges and universities with 49 campuses, including two research universities, 10 regional universities, one public liberal arts university, and 12 community colleges. Oklahoma also has 14 independent colleges and universities. AFFORDABILITY FY15 UNDERGRADUATE RESIDENT TUITION AND MANDATORY FEES $10,448 $9,816 $9,608 $9,034 $8,700 $7,731 $7,695 $7,442 47
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Source: Oklahoma State Regents for Higher Education HIGHER EDUCATION Education & Workforce Development FACT: Enrollment at private colleges and universities increased by 15.7% between 2004-05 and 2013-14, while enrollment at public colleges and universities decreased 0.3% over the same time period. Overall, enrollment at Oklahoma institutions increased by 1.1% during that ten year span. FACT: 49.6% of 2013 Oklahoma public high school graduates entered an Oklahoma college or university in the fall following high school graduation. ENROLLMENT STUDENT RETENTION FACT: Fewer students make it past their first year of college than they did 10 years ago. STUDENT FLOW Tier 2004-05 2013-14 10 Year Difference Research Institutions 91.2% 89.1% -2.1% Regional Institutions 77.8% 75.3% -2.5% Community Colleges 66.8% 62.3% -4.5% FIRST YEAR PERSISTENCE RATES FOR FALL, FIRST-TIME, DEGREE-SEEKING FRESHMEN WITHIN THE STATE 48
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Source: Oklahoma State Regents for Higher Education; The Chronicle of Higher Education, College Completion; The Institute for College Access & Success, Project on Student Debt HIGHER EDUCATION Education & Workforce Development GRADUATION RATES FACT: Oklahoma places 33rd in the nation in terms of four-year graduation rates at four-year private colleges and 40th in terms of four-year graduation rates at four-year public colleges. State 4-Year Public Colleges 2-Year Public Colleges 4-Year Private Colleges 4-Year Graduation Rate 6-Year Graduation Rate 2-Year Graduation Rate 3-Year Graduation Rate 4-Year Graduation Rate 6-Year Graduation Rate Arkansas 20.6% 39.7% 13.1% 21.4% 39.4% 53.2% Colorado 30.3% 53.6% 14.2% 20.8% 56.2% 66.4% Kansas 27.6% 54.6% 22.8% 30.6% 34.8% 48.2% Missouri 32.3% 55.2% 8.5% 18.7% 46.1% 59.7% New Mexico 14.4% 41.7% 8.2% 13.0% 32.3% 41.9% Oklahoma 22.8% 46.2% 8.3% 16.5% 38.5% 52.2% Texas 27.6% 51.7% 6.3% 13.6% 44.1% 59.7% U.S. Average 33.3% 57.6% 19.4% -- 52.8% 65.4% COLLEGE GRADUATION RATE (FIRST TIME, FULL TIME DEGREE SEEKING STUDENTS), CLASS OF 2013 DEGREES CONFERRED STUDENT DEBT FACT: During 2013-14, Oklahoma public and private institutions granted 40,535 degrees. Of those, 11,342 were Associate degrees, and 19,932 were Bachelor’s degrees. Master’s and Doctoral degrees totaled 6,749. FACT: In 2014, the average debt of Oklahoma college graduates was $23,430, which was the 7th lowest in the nation. Fifty-five percent of those graduates had some amount of student debt. 49
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Source: Oklahoma Department of Career and Technology Education CAREER TECH Education & Workforce Development Many consider Oklahoma’s CareerTech system one of the best in the world. It is essential that we continue to support its operation and mission of providing our state’s citizens and industries with the training needed to achieve success in the workplace. BY THE NUMBERS The Oklahoma CareerTech system has 29 technology center districts located on 59 campuses. 72 of Oklahoma’s 77 counties are served by a career technology center. For FY16, technology centers are approved to offer 568 different career major offerings. • 390 of Oklahoma’s 516 comprehensive school districts offer CareerTech classes to their students. • 542 of Oklahoma’s 1,754 comprehensive school sites offer CareerTech classes to their students. • There were 1,583 CareerTech students who graduated from high school AND received one or more industry-given/industry-endorsed certifications during FY14. • 82,561 9th through 12th grade students were enrolled in CareerTech classes in FY15. PARTNERSHIP WITH K-12 SCHOOLS 14,318 industry credentials were earned by CareerTech students in FY14. THE TOP 8 CERTIFICATIONS ARE: 1. Long-Term Care Nurse Aide 2. Home Health Care Nurse Aide 3. Licensed Practical Nurse 4. Fundamentals of Technology 5. Oklahoma Welder Certification 6. Shielded Metal Arc Welder 7. Entry Level Child Care Training 8. Cosmetologist There were 194 different types of industry-recognized/industry- given certifications received during FY14. INDUSTRY CREDENTIALS 194 CERTIFICATIONS OBJECTIVE 50
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Source: Oklahoma Educated Workforce Initiative, Oklahoma’s Business Case for Education Reform; U.S. Census Bureau (American Community Survey 2009-2013) TOMORROW’S WORKFORCE Education & Workforce Development We will need dramatic improvements in the productivity of our educational system for the Oklahoma workforce to meet the demands of the 2020 job market. ISSUE Only 23.5% of Oklahoma’s adult population hold a Bachelor’s degree or better, which is the ninth lowest percentage in the nation. THAT’S COMPARED TO: Colorado 37.0% Kansas 30.3% United States 28.8% Texas 26.7% Missouri 26.2% New Mexico 25.8% Arkansas 20.1% Oklahoma ranks 32nd in the percentage of adults who have completed high school or an equivalent. WORKFORCE OF TOMORROW Occupation Number of New Jobs by 2020 2020 Job Growth Rate % New Jobs Needing Associate’s Degree or More % New Jobs Needing Bachelor’s Degree or More Social Sciences 1,280 23% 100% 100% Healthcare Support 9,550 23% 59% 6% Healthcare Technical and Professional 17,680 22% 94% 47% STEM 10,140 19% 86% 55% Food and Personal Services 49,610 19% 42% 9% Education 16,690 18% 93% 92% Managerial and Professional 52,910 18% 81% 49% From 2010 to 2020, U.S. job growth will be greatest in the occupations and fields requiring the greatest educational preparation. In Oklahoma, job growth will be highest in the following seven occupations: By 2020, 64% of Oklahoma jobs will require post-secondary education. According to 2011 Census data, however, only 33% of Oklahoma’s working-age adults hold such two- or four-year college degrees. TODAY’S WORKFORCE 86.0% 86.4% 51
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Source: Change the Equation, Vital Signs STEM Education & Workforce Development STEM (Science, Technology, Engineering & Mathematics) skills lead to opportunities in Oklahoma, but our education system is not preparing all young people to achieve in math and science. It is necessary that we give Oklahoma students access to better STEM learning opportunities. STEM EDUCATION Oklahoma elementary schools spend less time teaching science than elementary schools nationwide. In 2011-12, the average number of hours spent per week on science in grades 1-4 was: • Oklahoma - 2.2 hours • United States - 2.6 hours Only 7% of Oklahoma’s high school graduating class of 2013 took an AP math exam, and only 3% scored a 3 or higher. The same percentages apply to AP science exams. The news about STEM education in Oklahoma is not all bad. In 2012-13, 25.8% of certificates and degrees in Oklahoma were in STEM fields. The U.S. average was 23.9%. 23.9% 25.8% DIVERSITY NUMBER OF STEM DEGREES/CERTIFICATES IN OKLAHOMA (2013) Oklahoma’s women lag behind in STEM degrees. Closing the gender gap in STEM subjects could dramatically increase the available talent in those fields for Oklahoma employers. 1,102 1,437 260 377 Men Women OBJECTIVE 52
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Source: Change the Equation, Vital Signs STEM Education & Workforce Development STEM JOBS In Oklahoma, between 2014 and 2024, the number of STEM jobs will grow 15%. • 12% Computing • 14% Engineering • 20% Advanced Manufacturing All other jobs in Oklahoma will grow 10%. Unemployment is lower in STEM occupations in Oklahoma and the nation as a whole. The average STEM unemployment rate between 2011 and 2014 was 2.5% in Oklahoma and 3.1% in the United States. Oklahomans with STEM jobs also earn more money. • Median earnings in STEM jobs: $31.90/hour • Median earnings in all other jobs: $16.22/hour STEM AND NON-STEM UNEMPLOYMENT RATES (2011-2014) STEM Non-STEM 2.5% 3.1% 5.5% 7.4% 53
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Source: State of Oklahoma, Executive Budgets; U.S. Census Bureau, Public Education Finances: 2013 EDUCATION FINANCE Education & Workforce Development Oklahoma needs to prioritize education funding for programs and reforms designed to address current and future Oklahoma workforce needs. EDUCATION FUNDING Education & Workforce Development agencies received 50.31% of total FY16 state appropriations. The main recipients are: • Career & Technology Education - 1.85% • Department of Education - 34.71% • Regents for Higher Education - 13.37% In FY13, the distribution of Oklahoma’s public elementary- secondary school system revenue was the following: • Federal Sources - 12.2% • State Sources - 49.2% • Local Sources - 38.6% While 34.4% of the State Regents for Higher Education’s revenue came from appropriated funds, the largest percentage (48.2%) came from tuition and fees in FY16. EDUCATION & WORKFORCE DEVELOPMENT STATE APPROPRIATIONS (FY2005 - FY2016) OBJECTIVE 54
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Source: U.S. Census Bureau, Public Education Finances: 2013 EDUCATION FINANCE Education & Workforce Development OKLAHOMA PUBLIC SCHOOL SYSTEM EXPENDITURES In FY13, Oklahoma’s public elementary-secondary school system expenditures were $5,777,164,000. That was the 29th highest amount spent in the nation. Oklahoma spent $2,800,189,000 on instruction, which was 48.47% of the total amount spent. THAT’S COMPARED TO: United States 53.88% Kansas 52.86% Missouri 51.85% Colorado 49.62% Arkansas 49.06% New Mexico 48.42% Texas 47.97% Instruction 48.47% Operation & Maintenance of Plant 9.94% Pupil Support Services 6.16% Capital Outlay - Construction 5.59% School Administration 5.03% Instructional Staff Support Services 3.86% Pupil Transportation 3.17% General Administration 3.03% PUBLIC SCHOOL SYSTEM EXPENDITURES TOP RECIPIENTS 55
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Source: U.S. Census Bureau, Public Education Finances: 2013 EDUCATION FINANCE Education & Workforce Development In FY13, Oklahoma spent $7,672 overall per student. Only Arizona, Idaho, and Utah spent less per student. The U.S. average was $10,700. TOTAL PER PUPIL SPENDING (2000-2013) PER PUPIL SPENDING In FY13, Oklahoma spent $4,170 per student on instruction, which was the fourth lowest amount spent in the nation. THAT’S COMPARED TO: U.S. Average $6,480 Missouri $5,728 Arkansas $5,319 New Mexico $5,225 Colorado $5,036 Texas $4,947 Kansas $3,072 Oklahoma ranked 20th in administrative spending for FY13 with $261 spent per student. The U.S. average was $204. $204 $261 56
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Research Foundation Board of Directors President – FRED MORGAN Executive Director – MIKE SENEY BOARD: ROGER BEVERAGE – Oklahoma Bankers Association DAVID BOREN – University of Oklahoma BILL W. BURGESS, JR. – Vortex, Inc. DEBRA C. COOK – KPMG LLP BURNS HARGIS – Oklahoma State University TED HAYNES – Blue Cross Blue Shield of Oklahoma DANIEL G. KEATING – Summit Consolidated Group, Inc. PHIL KENNEDY – Comanche Home Center BRAD KRIEGER – Arvest Bank CHUCK MILLS – Mills Machine Company, Inc. J. LARRY NICHOLS – Devon Energy Corporation DAVID RAINBOLT – BancFirst Corporation STEVE TURNBO – Schnake Turnbo Frank|PR The State Chamber Research Foundation is a research organization working in partnership with state business leaders, economists and university researchers to advance and fund activities in public policy research that promote the future of Oklahoma. The State Chamber of Oklahoma has had an affiliated research foundation since 1981. Over the last 35 years, the foundation (and its predecessors, Oklahoma 2000 and Oklahoma 21st Century) has been a critical voice for improving Oklahoma’s business climate. 57
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WE MEAN BUSINESS PO Box 53217, Oklahoma City, Oklahoma 73152-3217 www.okstatechamber.com RESEARCH FOUNDATION