Much of Governor Asa Hutchinson’s tax legislation is devoted to changing the name of the state’s Long Term Reserve Fund to the Catastrophic Reserve Fund. The Senate version of the bill SB1 is sponsored by Senator Jonathan Dismang. Senator Dismang said the purpose of the name change is so future legislatures will know the fund is for emergency purposes only.[i]
But Senator Dismang KNOWS the name of a fund means nothing. If you want to send a strong message that the fund is only for emergencies you MUST make it harder to spend the money.
Why do we say Senator Dismang KNOWS a name by itself means NOTHING? Take for instance the Property Tax Relief Trust Fund. You would think the name tells you what it is to be used for – property tax relief. But, since the fund doesn’t have real restrictions, the legislature keeps raiding it for other things and Senator Dismang voted to do just that.
Senator Dismang voted for Act 808 of 2019 (SB447) which grabbed over $8 million from the Property Tax Relief Trust Fund to spend on county voting machines and then set a mechanism for the future years to automatically transfer part of the fund to the Long Term Reserve Fund (which is to be renamed the Catastrophic Reserve Fund). [ii] So he knows very well the name of a fund means nothing without real teeth.
Changing the names of funds and programs without making real change is what Governor Hutchinson has done over and over. Senator Dismang needs to tell the Governor “Not this time. We will impose restrictions to match the name.”
Whether you call the fund “long term” or “catastrophic” it currently only takes one committee, by a two-thirds vote, to approve the Governor raiding the fund. It can be approved by either the Legislative Council or the Joint Budget Committee.
If the legislature really wants to send a signal to future legislatures, the only way to do that is to make it harder to spend the money. The bill needs to be changed so that expenditures can only be made by the full legislature through an appropriation bill.
Tell Senator Dismang and your state Senator and Representative to amend the bill to match the stronger name with a stronger restriction on how the money is spent.