Friday, July 1, 2016

The day of the unicorn: Arkansas free-lunch budgeting continues

Posted By on Fri, Jul 1, 2016 at 7:14 AM

click to enlarge WITCH DOCTOR: Asa Hutchinson's everything-for-noting government finance outlook is reminiscent of George Bush's "voodoo economics" line.
  • WITCH DOCTOR: Asa Hutchinson's everything-for-noting government finance outlook is reminiscent of George Bush's "voodoo economics" line.
The morning paper contains a wealth of evidence of Arkansas voodoo economics — or call it Brownback economics — in the Asa Hutchinson administration.

* FREE ROADS: The governor told the lobby for highway contractors that he wants more money for highway construction but no tax increases. 

The governor noted that he's building more highways for free now, by using budgeted state surpluses. Where do budgeted state surpluses come from? Cutting other state needs. See: Zero pay increases for state employees. Slap-dash environmental regulation (though this is about philosophy as well as money.) Etc. And if more general revenue is tapped for highways, he said, we can just "offset" it with other state budget cuts.

* FREE PRISONS: A consultant says the Arkansas prison population will continue to rise (an almost 30 percent growth over 10 years, which means tens of millions in costs) because of tough parole policies. But, remember, no tax increases for prison construction, more parole officers or any other punishment costs will be allowed. And the governor said education must be protected. So if highways, education and prisons can't be cut, what's left? The state Apiary Board?

* FREE HEALTH CARE: Thanks to Obamacare, the federal money for Medicaid expansion is going to keep pouring into Arkansas. But, a footnote: An analysis says the Obamacare Medicaid expansion is going to cost about $300 million more than anticipated over five years, about a fourth of that increase the state's responsibility. (That's not as bad as it sounds in a $9 billion budget, about a 3 percent increase.) No problem. I assume Hutchinson believes we can cover that with "conservative budgeting," too. Since education, highways, prisons and health care can't be touched, nor may taxes be raised, where now will the offsets be found?

Higher education: Bend over.

* FREE MONEY: Not only do we get all these services without any additional cost, the governor is still talking about yet another income tax cut in 2017. (It will likely again not be extended to the working poor, same as 2015, because their high numbers in the population provide too much tax base to give up and still give the rich more comfort.)

In short: Arkansas needs more money for highways, prisons and medical care, not to mention sufficient growth money to preserve existing education sufficiency funding.

How to pay for it? Tax cuts, of course.

And legislators said we didn't need Common Core arithmetic standards.

PS: I can't help but add that we are flush enough to have Insurance Commissioner Allen Kerr planning a new palatial building for himself in the shadow of the Capitol dome (perhaps with a dome of his own, according to one account of his building dreams.)

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