Arkansas Business' 25 Legislative Actions (25th Anniversary)


How has Arkansas' legislative climate evolved over the past 25 years? Take a look at the following developments, in chronological order. 

1. Creeping Sales Taxes(1983-2004)
Starting with a 1 percent increase at a special legislative session in the fall of 1983 and collected in 1984, the Legislature has doubled the state sales tax in the past 25 years, raising the rate five times – four for public education (1983, 1991, 1999 and 2003) and once for conservation by way of a 1998 constitutional amendment raising the tax one-eighth of a cent for parks, tourism and the Game & Fish Commission. In 2004, the General Assembly expanded the definition of a taxable transaction by including 14 consumer services ranging from body piercing to car towing – criticized as "the tax on industries without lobbyists."

2. Teacher Testing (1984)
Needing conservative votes to pass his sales tax at a special legislative session in the fall of 1983, Gov. Bill Clinton proposed requiring all teachers and administrators to pass a basic-skills test to retain their teaching certificates. It was an idea first broached by his wife, Hillary, who chaired an education reform committee. The bill passed despite the opposition of the Arkansas Education Association, and it brought over enough votes to pass the sales tax. The test was first administered in 1984.


3. Four-year Terms (1984)
A constitutional amendment proposed by the Legislature and ratified by voters extended the terms of the seven state constitutional officers from two to four years, ending what had effectively become a perpetual campaign season.

4. Clinton Economic Program (1985)
Clinton offered a large package to stimulate economic development, and almost all of it passed: changes in banking laws, start-up money for technology businesses and large tax incentives for Arkansas industries that expanded production and jobs. Arkansas was one of the most successful states in terms of job creation in the next six years.

5. Revenue Bonds (1986)
The Arkansas Supreme Court shocked government and business leaders by interpreting a 1934 constitutional amendment requiring popular votes for all bonded indebtedness to mean what it said, which effectively outlawed traditional revenue bonds. An amendment exempting from the election requirement all bonds that did not pledge tax revenues was quickly drafted and ratified by voters.

6. Tech Colleges (1991)
Legislation crafted by state Sen. Nick Wilson, D-Pocahontas, converted a number of vocational-technical schools to technical colleges. To pay for the new "work force" program, the corporate income tax was raised to a flat 6.5 percent on incomes greater than $100,000. Formerly, the tax was graduated up to 6 percent.

7. Term Limits (1992)
Voters approved an initiated amendment limiting state constitutional officers to two terms, state senators to two terms, state representatives to three terms, members of the U.S. House of Representatives to three terms and U.S. senators to two terms. The federal courts invalidated the congressional limits because they violated the U.S. Constitution.

8. Workers' Comp Reform (1993)
Responding to rising workers' compensation insurance costs, the Legislature passed a sweeping overhaul of the law, shrinking the definition of "compensable injury" to require that it be caused by a specific incident at a certain time and place and making it nearly impossible to win claims for carpal-tunnel syndrome, hearing loss and the like.

9. Any Willing Provider (1995)
The Legislature, egged on by state Sen. Bill "Gwatzilla" Gwatney, D-Jacksonville, enacted a law prohibiting insurers from excluding from health-coverage plans any doctor or hospital willing to accept its payment terms. Arkansas Blue Cross & Blue Shield won a court injunction against its implementation, but a U.S. Supreme Court decision in 2004 upheld a similar Kentucky law, leading finally to the implementation of the Arkansas law 10 years after its enactment.

10. The Tucker Constitution (1995)
At a special election, voters rejected by a whopping 4 to 1 a wholesale revision of the Arkansas Constitution written by legislators and citizen delegates under the tight direction of Gov. Jim Guy Tucker. Confusion and anger over the process rather than opposition to the document accounted for the staggering defeat of the fourth effort in the century to rewrite the Constitution. The next year voters defeated Tucker's $3.5 billion highway bond issue by a similar margin.

11. ARKids First (1997)
Taking a cue from the liberal Arkansas Advocates for Children & Families, Gov. Mike Huckabee supported a major expansion of the Medicaid children's health program, making children in families earning up to 200 percent of the federal poverty line eligible for coverage. He would count it his greatest achievement as governor. State Sen. Mike Beebe, D-Searcy, sponsored the legislation.

12. Streamlined Car Tags (1997)
Gov. Huckabee's most popular initiative was streamlining the renewal of vehicle registration. Vehicle safety inspections were dropped, and people could assess and renew their licenses easily online or by mail.

13. Check Cashers Act (1999)
The Arkansas Check Cashers Act gave the payday lending industry legal cover to operate in Arkansas, and they flourished for nearly 10 years despite the efforts of reformers like Hank Klein (above). In a series of decisions in 2008, the Arkansas Supreme Court invalidated the law, ruling that loans against future paychecks that accumulated interest of more than 300 percent were subject to the state's rigid usury law.

14. Highway Bonds (1999)
The Legislature and Gov. Huckabee raised motor fuel taxes 4 cents a gallon, and the voters at a special election approved a $575 million bond issue to rehabilitate the worst sections of the Interstate highway system. The program resurfaced about 350 miles of Interstate.

15. Tort Reform (2003)
The Civil Justice Reform Act reduced the prospects and size of personal injury and property damage claims in Arkansas courts. It tightened the standard of proof and limited awards for punitive damages, narrowed responsibility for injury and damages by eliminating the theory of joint and several liability and made it procedurally harder to file medical liability claims.

16. Wet Restaurants (2003)
Act 1813, introduced by Rep. Betty Pickett, D-Conway, was supposed to promote tourism and industry by making it possible for restaurants in dry counties to obtain private club permits and sell alcohol. The practice spread from Faulkner County to other cities in dry counties, including Jonesboro (above), Batesville and Benton.

17. Lakeview Reforms(2003-07)
The Arkansas Supreme Court in 2002 and in a supplemental order in 2004 ordered the state to comply with a constitutional requirement that every child be given a suitable and substantially equal educational opportunity. In a succession of sessions, the Legislature raised $350 million in new taxes, altered the formula for distributing state school aid, assigned schools first priority on future revenues, consolidated 57 districts with fewer than 350 students and set aside $455 million for school construction and repairs.

18. Bed Tax (2001)
Responding to complaints about the quality of care in nursing homes and the homes' grievance about low reimbursement rates for the care of patients dependent on Medicaid, Gov. Huckabee signed a tax of 6 percent of the gross receipts of nursing homes. The tax, which initially raised about $55 million a year, was ultimately paid by private-pay patients. The nursing homes, meanwhile, reaped the benefits of a 3-to-1 federal match of the tax receipts.

19. Super Projects (2004)
Amendment 82 to the state Constitution, ratified by the voters, authorized large bond issues to pay for capital improvements and other costs to entice a large industry to the state. A bond issue could total 5 percent of the state's general revenues, which currently would mean about $250 million. It has never been used, but a 2007 law that gave Gov. Beebe a discretionary $50 million "quick-action closing fund" for the same purpose has been successful.

20. Electronic Gambling (2005)
The Legislature passed legislation allowing thinly disguised casino gambling at the racetracks at Hot Springs and West Memphis, and Gov. Huckabee – who said he opposed gambling – let it become law without his signature. It legalized electronic games that the gambling industry describes as "games of skill." Voters in both cities ratified the expanded wagering, and both Oaklawn Park and Southland Greyhound Park are enjoying the new revenue streams.

21. Agriculture Department (2005)
Act 1978 created Arkansas' first Agriculture Department, which was supposed to make Arkansas farming and forestry competitive in world markets. It put the Forestry Commission, Livestock & Poultry Commission and the State Plant Board under the new umbrella agency.

22. Grocery Tax Cut (2007)
Fulfilling a campaign promise to eliminate sales taxes on groceries in stages, Gov. Beebe proposed halving the state sales tax to 3 percent, and the Legislature obliged. He is trying to carve away another penny in the current session.

23. Gas Severance Tax (2008)
A threat by former gas executive Sheffield Nelson to put a 7 percent severance tax on the general election ballot by initiative gave Gov. Beebe enough leverage to force a 5 percent tax (with liberal exemptions) through the Legislature, the first significant tax on gas production in the state's history. The proceeds go mostly to highways.

24. State Lottery (2008)
Lt. Gov. Bill Halter led an initiative campaign to amend the state Constitution to authorize the Legislature to conduct a lottery with the net proceeds supporting an expanded college scholarship program. Voters approved it by a wide margin, and the Legislature is now wrestling with the devilish details.

25. Tobacco Taxes (2009)
A coalition of health groups sought an increase in tobacco excise taxes to pay for some 20 health projects, the largest being a comprehensive emergency medical system. Gov. Beebe embraced it, fixed the tax increase at 56 cents a pack, and the Democratic leaders of the Senate and House of Representatives rounded up enough Republican votes to reach the three-fourths threshold for passing the tax.


(Click here to see all the stories in our anniversary edition. Or click here to flip through each page of the edition in this special free electronic version.)