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National

Big Oil tax breaks hold back Oklahoma schools

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Opening sequence

National

Big Oil tax breaks hold back Oklahoma schools

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COMING UP:Big Oil tax breaks hold back Oklahoma schools

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Transcript

00:00:01
>> This poster hanging in the lobby of an oil company's headquarters in Oklahoma seems to speak to the industries support of education. But now the states public schools are in trouble, thanks in large part to tax breaks awarded to big energy. The incentives are some of the most generous in the US, but they took a major bite out of tax revenue even while oil profits were booming.
00:00:22
And since the breaks were extended during the recent market bust, the state's budget deficit has ballooned to $1.3 billion, further limiting Oklahoma's ability to fund its school systems. Reuters correspondent, Luke Cohen.>> I'm here on the campus of Newcastle Public Schools, which next year is expecting a budget cut of about $1 million.
00:00:41
To avoid having to lay off teachers, they've taken some drastic measures including cutting the school week. The superintendent, Tony O'Brien, tells me that will help them save on utility costs so they won't have to keep the lights on the extra day. And on transportation, they won't have to pay for school buses to shuttle kids back and forth.
00:00:59
>> To further save money, O'Brien is also considering forgoing new textbooks next year and charging fees to participate in school activities. And his is not the only district under pressure. Overall, the state's $3 billion annual education budget has been cut by $58 million, just since January, and more cuts are coming.
00:01:19
Part of the problem is the drop in oil prices, down almost 60% since mid-2014. But while that's impacted energy-focused economies across the country, Oklahoma's tax breaks are what make that state particularly vulnerable.>> Oklahoma didn't see as much revenue go to things like education during the boom years as states like North Dakota or Texas that also saw a substantial increase in oil and gas production.
00:01:46
So while even states like Texas, North Dakota are having to cut and are seeing budget short falls as a result of the fall on oil and gas prices. In Oklahoma, school budgets are being cut to levels not seen since before the plume even started.>> Economists estimate that Oklahoma's tax breaks cost the state hundreds of millions of dollars in revenue during the energy boom, and funding per student has fallen by a quarter since 2008, the largest drop in the country.
00:02:13
Meanwhile North Dakota, with oil production taxes that are 5 times higher, has seen per capita funding rise by 25% over the same period.