Will Arkansas government continue to be a red state with blue results? To find the answer you only need to watch how the governor and legislature handles the next state budget this fall.
It’s all about the budget. Arkansans pay more for state government than people in many states. If Arkansas politicians get a grip on the Arkansas budget:
- There will be more money in taxpayers’ pockets;
- Less money wasted on political cronies; and
- Less money for left leaning programs seeking to indoctrinate Arkansans.
The top priority of the next legislature should be budget reform – setting controls to reduce wasteful spending and doing their job by scrutinizing state spending.
Here are ten things about Arkansas spending and taxes you need to be aware of:
- INCREASED SPENDING. The Arkansas budget keeps increasing and outpacing inflation. Unfortunately, Arkansas does not budget based on how effective and necessary a program is shown to be. Instead, agency budgets are based on how much the agency spent in the previous fiscal year and then a COLA is added to increase the budget.
- GIVE AND TAKE AWAY. During the past several years the governor and legislature have continually bragged on legislation cutting some taxes but fail to mention over the past several years they have increased numerous other taxes which acts to take back the money they claim to be giving you.[i]
- BILLION DOLLAR BABY. And speaking of taxes, it is estimated the surplus of general revenues will far exceed a billion dollars this year. Reminder: Arkansas has high taxes compared to most states!
- BYPASSING SPENDING CONTROLS. Politicians keep finding ways to avoid the constitution’s spending control. The main control over spending is the requirement that spending from the State Treasury be approved by an appropriation bill adopted by 3/4th of the members of the Senate and House of Representatives. But they easily bypass this requirement by either transferring revenue to a surplus fund at the end of a fiscal year or by directing taxes go straight into special funds where no appropriation is needed for spending. Millions of dollars of “surplus revenue” have been spent just on the request of the Governor and the approval of merely one legislative committee which is primarily made up of long-term legislators who are more inclined to spend your money. Overall spending will remain high as long as it remains easy to spend your money.
- ECONOMIC DEVELOPMENT FEED TROUGH. The state spends vast sums of your money on “economic development” which is grants to big corporations and tax credits to big corporations. Some economic development programs such as the Quick Action Closing Fund have been heavily criticized by academics as a waste of taxpayer money because they find these give aways aren’t a deciding factor in a corporation’s decision whether to locate in Arkansas.[ii] The give aways put small business at a disadvantage for sales and for employees because they compete with taxpayer subsidized corporations. Today’s economic development programs no longer resemble the programs developed over fifty years ago by Governor Winthrop Rockefeller. Today it has become a behemoth and it is past time to take a hard look at what should be trimmed.
- EVILS OF BLOATED SPENDING. Bloated spending makes it easier for political cronies to get a place at the government feed trough and makes it easier for left wing bureaucrats and school officials who seek to siphon off state spending for ridiculous left-wing programs to indoctrinate students and citizens.
- SPECIAL SESSION RELIEF/ MORE SPENDING. Governor Hutchinson is talking about a special session to give some tax relief to Arkansas taxpayers BUT the proposed special session is an EXCUSE to spend millions of so-called surplus funds.[iii]
- HOW TO FUND GOOD CAUSES? There are many good causes that could benefit by receiving more funds BUT increasing state spending when spending is already high is not the answer. The answer is hard – cut less important spending and prioritize spending.
- A FAKE CUT IN STATE GOVERNMENT. What about the state government transformation legislation passed a few years ago? Politicians will tell you it reduced the size of state government, but in reality, the transformation law kept every state agency, board, and commission, didn’t cut any employees, and didn’t cut the salaries of any bureaucrats. Instead, it added another layer of high paid commissioners to oversee several agencies. Any savings has not been because of the legislation but to individual efforts of state employees to justify their high paid jobs. The legislation was about giving the governor more control over boards and commissions and not about reducing government.
- IGNORING AUDITS. When audits find wasteful spending, agencies are not punished. When former Senator Bryan King was chair of the Legislative Audit Committee, he audited the state’s Obamacare Medicaid Expansion The audit found the cost of the program was much higher on Arkansas taxpayers than in other states having the program. So, what did the legislature do? Nothing other than rename the program and make sure Bryan King would not be the chair of Legislative Audit so he wouldn’t embarrass the governor with inconvenient truth.
In another example an audit showed an agency head claimed unjustified spending from travel. So, did the legislature cut his travel budget? No, they increased it.[iv]
Unless the next legislature imposes real budget controls such as stopping discretionary spending approved by merely one committee and utilizing budgeting based on need and performance, there will not be progress on reducing high spending and taxpayers will have to pay more and more.
It appears the members of the next legislature will be more conservative so there is a chance at reform. But, powerful lobbyists are already working on them to keep the government feed trough full.
Will you leave Arkansas’ spending in the hands of lobbyists or will you make your voice heard loud and clear – No more budget games. We need budget reform.
[iii] Hutchinson: Favor action on tax relief, Arkansas Democrat Gazette, 6/03/2022