UPDATE: I was wrong. The bill was passed over again.
The bill has been amended several times. Initially, it arbitrarily used 3 percent as a cap, or in hard times, if the three-year average rate of change of GDP was lower, that number. Now, it's based on the rate of change of personal disposable income (here's what that looks like over the last couple of years). I haven't run the numbers to see what it would look like this year, but Westerman said on "Arkansas Week," if we used this year's numbers it would mean a 3.8 percent growth cap.
Host Steve Barnes pressed Westerman on the need of such a bill, when the legislature already controls spending through appropriations and the Revenue Stabilization Act.
"We've got two methods right now," Westerman said. "I'm proposing a third method which allows more control and more input from the General Assembly on what the growth in revenue spending is."
Of course, what the bill actually does is offer small-government lawmakers an out from spending money on programs that need funding. Sure there's an emergency clause, but the measure is obviously designed to slow the growth of government and build up massive surpluses, in order to keep the tax cuts coming.
Arkansas Advocates for Children and Families has nicely encapsulated the damage it could do:
"Because of the recession we are investing less in education, transportation and other services — like child protection and prisons — than we have in prior years. Under HB 1041 future recessions will be even worse. By forcing the state budget to grow by a fixed amount, Arkansans will have fewer options the next time they are out of work or in need of health coverage. Economic downturns require the government to stabilize the economy when private entities decide to hoard their money and stop spending. HB 1041 prevents the state from providing for the general well-being of all Arkansans. Capping state spending now will make it impossible for us to regain the ground lost during recessions like the one we just experienced."
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