What Goes Around (Gwen Moritz Editor's Note)

by Gwen Moritz  on Monday, Jan. 22, 2001 12:00 am  

I was talking to a legislator the other day about the current problems he and his fellows face in paying for everything the state needs to pay for. We were specifically talking about higher teacher salaries and reasonable reimbursements for nursing homes that care for Medicaid patients, but the list also includes the state's colleges and universities, prisons and technological infrastructure.

He suggested I ask folks what they had done with the income tax cut they got in 1997. I wasn't living in Arkansas during those years — I was in Tennessee, a state where the Republican governor has made himself mighty unpopular by trying to impose a state income tax for the first time — but an informal survey suggests this legislator is right. Most people don't realize they got a tax cut and, even if they vaguely remember it, don't seem to feel it made a difference in their standard of living.

But it cost the state plenty — above $80 million a year, not to mention an additional $20 million or so in tax exemptions generously bestowed two sessions ago.

I haven't actually talked to anyone who benefited from the General Assembly's further beneficence in 1999, when it cut the capital gains tax, so I don't know how appreciative those people are. That tax cut cost the state an estimated $12.4 million last year and will cost an estimated $13.3 million this year. And now, with the help of the '99 Legislature's panic over radical property tax opponents, the voters have gone and voted themselves a $300-a- year property tax cut, which the Ledge in special session replaced with a regressive half-cent sales tax.

I like a tax cut as much as the next person — which apparently isn't too much — but Arkansas has always had one of the lowest tax burdens in the nation. And we sure get our money's worth. If the state had "huge" surpluses in the mid-'90s, as news reports at the time described them, I'm disinclined to think it's because we ran plumb out of long-neglected things to spend the money on. Like teachers and sick, old people.

***

I haven't noticed anyone introducing a bill to raise the income tax back up now that those huge surpluses are history. Yes, I know it would take a nigh-impossible three-quarter super-majority of both houses to pass it, but a fair number of bills are introduced each session just for show. It would be nice if one legislator, maybe one who is "termed out" and has nothing to lose, would make this gesture.

***

Legislators, bless 'em, sometimes seem to have multiple personalities, like some kind of Rep. Jekyll and Sen. Hyde.

Doyle Webb, the Republican senator from Benton, is a good example. The same guy who proposed good, sound limits on the relationship between lawmakers and lobbyists was also the chief sponsor of that horrible, and clearly unconstitutional, Check Cashers Act of 1999.

This year, Bill Gwatney is sponsoring a bill that would force the Arkansas Economic Development Commission to be accountable for how it spends millions of dollars each year. That's good government. But he has also introduced a bill that would make it harder for Arkansans to propose constitutional amendments, and that's not good. As worrisome as Oscar Stilley and his ilk may be, and as cynical and offensive as the Arkansas Casino Corp.'s self-serving gambling amendment certainly was, it is already a difficult and expensive proposition to bring a referendum to a vote.

***

Walter Hussman, owner of the Arkansas Democrat-Gazette, objected — properly — to one point in my last column titled "Wal-Mart Tattler." I said the D-G's "alliance" with the Walton-owned Community Publishers Inc. newspapers in northwest Arkansas allowed the two companies "to avoid the Justice Department scrutiny that would have accompanied either an out-and-out acquisition or a traditional joint operating agreement."

In fact, Hussman's Wehco Media Inc. and CPI did submit their plan to the Justice Department before entering into their peculiar arrangement. The Justice Department declined to take any action.

I remain convinced that an acquisition or a joint operating agreement would have received more than a rubber stamp, but it is incorrect to imply that the CPI-Wehco contract completely escaped the Justice Department's eye.

(Gwen Moritz is editor of Arkansas Business. E-mail her at gmoritz@abpg.com.)

 

 

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