Following is an economic analysis submitted by Oklahoma Academy board member Craig Knutson.
Previously, I submitted an analysis of State Policy Reports (SPR) data entitled Index of State Economic Momentum. That index focused on three major indicators - employment, personal income, and population, which are considered mainstream measures of socio-economic performance.
SPR has also compiled another index for several decades. This index ? The Camelot Index ? is more of a quality of life index, looking at six macro measurement categories: health, crime, education, society, economy, and state government. Each of the categories is comprised of indicators/variables, which I have listed below:
Crime-Free State: violent crime rate and property crime rate.
Educated Population: pupil-teacher ratio, high school graduation rate, average in-state tuition and fees, composite ACT and SAT scores (based upon the most widely taken test), and performance on the 8th grade NAEP, math and reading scores.
Healthy Society: home ownership rate, participation rate among voting-age population, percentage of children in single parent families, and percentage of households reporting low or very low food security.
Economy: the percentage of people in poverty, employment growth (most current year-over-year data), population growth, per capita income growth, per capita federal tax liabilities, per capita taxable resources, and annual mean wage for retail salesperson.
Prudent State Government: state and local taxes as a percent of personal income, state solvency, pension funding levels, bond ratings, and state and local spending as a percentage of state gross domestic product.
As with any index, the devil is in the details. Could SPR have used different variables; should they be weighted; etc.? The founding editor and staff ?developed the index based on the assumption that the ultimate measures of state performance deal with what is important to citizens.? Value judgements aside, most Americans prefer good health over bad health, a strong economy over a weak economy, and less crime, not more crime. So a Camelot-like state ?would have a strong economy with high incomes and low poverty rates, healthy people, low crime rates, a well-educated population, high achieving public schools, affordable public colleges and universities, citizens who vote and raise children in stable homes, and a well-managed state government with strong bond ratings and low taxes.?They tried to utilize variables that captured that intent, while knowing each of the variables had to be collected by all fifty states to be comparable. Quibbling aside, here is a ten year look at Oklahoma, again analyzing the most current data for three distinct reporting years: 2006, 2011, and 2016.
(See Table 1)
The Camelot Index for Oklahoma showed a lot less volatility over this ten year period than we saw in the Index of State Economic Momentum; sadly though, there was virtually no change in the overall index rankings for the state (43rd in 2006; 42nd in 2016). While the index is generated annually, the annual rankings have consistently fallen in the high 30s to mid-40s, in case you think I have cherry-picked to make a statement.
Of the six measures, the two measures that the state has consistently performed the best in are ?Prudent Government? and ?Educated Population.? You might be saying to yourself, especially following this past couple of legislative sessions and the recent Quality Counts 2015 report on Oklahoma ( www.edweek.org ), how that can be? But if you look at the individual metrics for each of the measures, you can better understand why the performance is relatively stronger than mainstream views most might hold in these two categories.
While the state definitely suffers from both a budget and budget process problem, Oklahoma?s tax burden is low relative to most states, as is our bond indebtedness. And while Quality Counts 2015 issued Oklahoma an overall grade of D+, ranking us 48th from the top, the K-12 pupil-teacher ratios, HS graduation rates, and in-state tuition and fees at public post-secondary institutions are quite favorable relative to most states. It is in the ?Achievement? area where the state continues to struggle the most (e.g., a ranking of 45th in eighth grade mathematics).
Despite our egregiously high incarceration rates, our violent and property crime rates have been on the decline (for 2014, -6.2% in violent crimes and -8.8% in non-violent crime), hence the steady improvement in both score and ranking. If you look at the individual metrics under Healthy Society, the lack of improvement in this area over the past ten years should not be surprising. Our voter participation rates are among the lowest in the nation, while our children in single parent households as well as the level of food insecurity are among the highest.
The consistently low performance in ?Healthy People? should not be a surprise, with a number of national reports ranking us quite low in both personal and systems outcomes. And our economy over the past ten years has really tumbled. It is important to note that the most current data for the metrics used do NOT reflect the significant declines of 2015 and 2016, so our scores are not likely to improve. What may keep our ranking stable are declines being suffered by other resource-intensive states as well.
In conclusion, ?quality of life? is often a soft measurement because it can mean different things to different people. But if you can accept the metrics utilized by SPR as being a good reflection of what a Camelot-like state ought to possess, Oklahoma has some significant challenges ahead.
I have also prepared two comparative tables, including geographically proximate states as well as states with like population levels. Geographically, we get to consistently thank New Mexico and Arkansas for keeping us out of the cellar, while showing great awe and curiosity with the State of Colorado. Demographically, the south/southeastern states (seven of the eleven) continue their domination of poor performance in establishing a good quality of life for their citizens.
(See Table 2)
The ?quality? in quality of life suggests that root cause identification is critical. Our inability to focus on root causes increases both the complexity and costs of future problems. Or, put a less academic way, ?you can pay now, or MUCH MORE later.?