
Ernie Dumas' column this week says both parties are guilty of posturing in calling the roll on tax and spending measures with no chance of passage. Even those like Sen. Mark Pryor, who held himself above the fray in opposing a tax increase for millionaires, are just engaged in a different form of posturing.
But, Dumas notes, there is a bottom line. Republicans would give still more tax breaks to the wealthy — perhaps along withnew minimum taxes on the poor — and explode the deficit as the failed trickle-down plans always have done. Democrats would close the budget gap a little by making millionaires pay a little more than they do currently. Tax rates for business and individuals are lower than they've been in decades and, well, you know the results.
The full column:
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The chamber of commerce's full frontal attack on the severance tax increase — not yet qualified for the ballot — continues. The Conway Chamber of Commerce today trotted out U.S. Reps. Mike Ross and Tim Griffin to announce their thoroughly unsurprising opposition. When the corporate lobby says jump, the toads leap.
The stealth campaign continues, with some good effect according to recent polling. The cry that the gas tax will deter job creation is a lie, judging by experience in states with higher severance taxes where production continues unabated (except to the extent depressed prices have had an impact). The congressmen probably would even cheer old Aubrey McClendon, the Chesapeake Energy boss who dreamed up a scheme to make himself unfathomably rich by cutting himself into a profit into every hole punched in the ground of Arkansas and other states. He doesn't want to make gas producers pay for the damage they cause to roads or environment either. Mike Ross and Tim Griffin respect millionaires, if not the roads of Arkansas.
I referred to a stealth campaign. I mean, for example, the guys handing out flyers at my house, the flyers themselves, the people running the social media accounts, the people orchestrating propaganda events like today's in Conway and all the other ways the Arkansas State Chamber of Commerce is laundering money through campaign consultants to beat the severance tax without being accountable for how the money provided by gas companies is being spent. It's the same secrecy template used by the Little Rock Regional Chamber of Commerce when it passed corporate money through the Markham Group to avoid disclosure of specific spending on a city sales tax campaign. I don't know why they haven't thought of laundering the contributions themselves through the consultants too. It would make reporting very simple. Hypothetically:
ARKANSANS FOR LOW TAXES FOR RICH, SALES TAXES FOR POOR
Receipts: Markham Group, $1 million.
Expenditures: Markham Group, $1 million.
What else, really, does the public need to know?
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Stephens Media today reports that it can't find any prominent politicians in support of the proposal to raise the gas severance tax in Arkansas. Surprise. It's an election year. The money flows from the corporate interests, beginning with gas companies but including the Arkansas State Chamber of Commerce. They are fighting a tax sufficient to pay for the damage exploration is doing to state roads and environment.
Noted: The committee opposing the tax has already raised more than $813,000 (mostly from gas drillers, but including some token contributions from the royalty owners who've hit a goldmine with the Fayetteville shale play and apparently can't afford to pay a minuscule increase from their no-cost windfall to the state for loss of the resource) and spent more than $600,000. The Stephens empire and Southwestern energy have put in $400,000 each.
How have they spent the $600,000?
Thanks for asking.
It's another one of those campaigns in which the corporate lobbyists spit on public accountability. Their reports show they don't believe they have to follow spending disclosure practices that apply to political candidates. Here's the most recent report
You'll see the campaign accounted for more than $200,000 in spending in essentially five checks — nearly all for two things — an "education campaign" and "campaign management." The latter was a check to the Markham Group, which was the washing machine through which the Little Rock Regional Chamber of Commerce laundered its spending on the Little Rock sales tax campaign and thus avoided disclosing how any of the money was spent specifically. The Ethics Commission signed off reluctantly on this practice in response to my complaint. The staff found an ethics violation, but the commission itself said its hands were tied by poor drafting of the statute and members said they hoped to correct it in 2013. Meanwhile, you'll see no do-right behavior from the fat cats with voluntary specific disclosure. They love their secrecy.
The Markham Group laughably said during the Ethics Commission's hearing that its spending on radio stations, mailers and other nuts and bolts of campaign spending amounted to "proprietary information." Be sure that the same fat cats in charge of this campaign will fight tooth and nail to preserve secret political campaigns in the 2012 legislature.
Rep. Dorothy Jane English, a Republican, has said she'd fix this little charade if elected to the Senate. I wonder, given the tactic's use in the corporate and politically popular severance tax fight, if she'll stick with that promise?
PS — In case you missed it, here's Ernest Dumas' column about how Sheffield Nelson is right in pushing for the tax increase and the corporate lobbyists aren't telling you the truth.
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The Fayetteville School District has won a lawsuit challenging the city of Fayetteville's effort to capture some of the money from a voter-approved tax increase to build a new high school and give it to the misbegotten downtown tax increment finance (TIF) district. The judge ruled that because the millage was pledged to debt, taxes collected within the TIF district under that new millage could not be diverted to the district's use.
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The Postal Service announced today that, for the first time, it won't keep a window open until midnight on income tax filing deadline day so that tax returns filed at the very last minute can still be postmarked before midnight.
No window hours will be extended.
The latest window hour and collection time is 8 p.m. at the Little Rock Processing and Distribution Center at 4700 E. McCain, North Little Rock.
Constructively, then, the tax deadline is 8 p.m. unless you file on-line. A postal service spokesman notes that the usual tax deadline of April 15, which falls on Sunday, has been extended not one, but two days this year.
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Times columnist Ernest Dumas, who draws on nearly a half-century of coverage of Arkansas politics, including the essential role gas exploration and taxation have played in politics, examines today former gas executive Sheffield Nelson's somewhat surprising role as a severance tax champion and his past leadership of the very business organizations fighting him today.
Conclusion:
1) Nelson is right. A higher tax won't discourage production.
[Gov. Mike] Beebe avoided the chamber’s argument that the tax would chase producers out of Arkansas because he knows better. History just doesn’t support the theory. Back when Arkansas, alone among the major producing states, left gas virtually untaxed, exploration companies were drilling like mad in states that levied severance taxes hundreds of times greater than Arkansas’s. States like Texas, Oklahoma, Kansas, Louisiana, Alaska, Wyoming and West Virginia get so much revenue from severance taxes that they have low or nonexistent income taxes. Thanks partly to Sarah Palin, Alaska taxes gas production at 22.5 percent of the market value, three times Nelson’s plan. Where’s the tea party?...But Beebe said he is inclined now to vote against Nelson’s tax because it might discourage companies that are exploring for oil in the Haynesville formation along the Arkansas, Louisiana and Texas borders from drilling in Arkansas because any gas that might be produced from the wells would be taxed more in Arkansas. Weak argument. Louisiana is taxing gas production now slightly more than Arkansas would be collecting if it had Nelson’s 7 percent rate. Louisiana exempts shale gas from taxes until the producer recovers its exploration costs, but shale wells produce so much gas in the early months that it doesn’t take long.
2) In a fair fight — though it likely won't be, given the money to be spent against Nelson — he should win.
But if the campaigns for and against the tax are waged at rational level, which is not likely, it ought to favor Nelson. He is the one person with nothing to gain, as far as anyone can tell. He is spending from his modest fortune to produce some gain for the public from the exploitation of a vanishing mineral.You might expect that the corporations that mine the gas for profit and the surface landowners who reap a small part of it would be happy to tithe a small part of their gain from a resource that was bequeathed to them from prehistoric life across hundreds of millions of years and that will not be there for the next few thousand generations. But that takes no account of greed.
The full column follows. (You can go here to find out about circulating petitions for the tax increase to pay for roads trashed by gas drillers.)
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Max, while "vacationing" this week, sent these questions to Mayor Stodola about the millage extension that the mayor proposed Tuesday:
1. What date are you pointing toward? 2. Will the city be specific about how it plans to spend money in first years? 3. Will the tax be used to support a bond issue? 4. If there is a bond issue, will there be an RFP process for bond counsel and unnderwriters? 5. Will any of the money be used for the technology park?
6. Will any of the money be used for a fund to provide taxpayer support for construction related to private business?
7. If the answer is you don't know, will you pledge NOT to use the money for the tech park or private business assistance? 8. Will the Chamber again run the sales tax campaign? 9. Will the Markham group again be the hired consultant to run the campaign? 10. Will you insist that whoever runs the campaign to operate by what the state Ethics Commission has said was was the intent — if not the technical letter — of campaign finance laws? That is, will you insist on disclosure of campaign spending commensurate with transparency in campaigns by individual candidates?
The mayor's response:
Hi Max——-3:25 am??? I hope I am not keeping you awake at night. Welcome back.
I don’t have answers to several of your questions as the issue has just arisen. I can tell you that the election, if called, will be before November when then County passes the ordinance setting the millage rates to be assessed for the upcoming year. Bruce and I had hoped to call this in 2013, but legal counsel insists that it has to be this year.
It would be a bond issue that is estimated at the reduced millage rate of 3 mills instead of 3.3 mills, to generate $105 million dollars over the length of the bond which may be issued in a series.
As far as I know staff has always gone through an RFQ process for the selection of bond counsel and underwriters and will do the same in this instance.
I have already publicly stated to Leslie that I believe the money should be used for streets, roads, and drainage, citing the $700 million dollars in needs that have been identified as problems. Those problems do not include the Tech Park and I don’t believe the money should be used there. That is absolutely not the intent. Money has already been allocated through the sales tax revenues for the Tech Park.
In 2004 when this millage was renewed there were 9 questions on the ballot. The BOD will ultimately determine the specific uses, but you now have my recommendation on this. This election is to continue a millage for capital improvements that has been in existence since 1958 with a reduction, not unlike Bobby Robertson’s [sic — he means Roberts'] library millage reduction election.
I know you dispute this, but the chamber did not “run” the sales tax election. Several in the business community supported the tax as part of a broad based coalition and contributions came from several sources, not just the business community. The chamber will not run the millage election and I have not had conversations with Jay, Dickson Flake or anyone else you perceive to be in the business community about the millage election. Also, I have no details on your other issues nor any idea who is going to run the campaign.
Other matters:
Thank you.
Mark
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It was jaw-dropping, the account of the House Republican's budget reported this morning (New York Times story here, Dem-Gaz here, both with nauseating photographs of a hee-hawing Rep. Paul Ryan) that would cut student loans, Medicare, food stamps AND lower the tax rate on the wealthy.
Do the American people really want to cut Medicaid by a third? Is giving the rich a tax break really a deficit reducer? Who do these Republicans in Congress, including the Arkansas trio that voted for the bill, represent?
I'm sputtering; the New York Times editorial page does a better job.
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I half-jokingly concocted a Republican agenda for incoming caucus leader Bruce Westerman. You'll see in an interview he gave Stephens Media that I wasn't far off.
Cut taxes. Cut spending. Cut regulations (except those that limit medical freedom and unpopular freedoms of other sorts.). Give truckers a handout they don't deserve. The only acceptable reworking of Medicaid is slashing of services. He mischaracterizes an income tax cut as a boon to those on fixed income. The poor are already protected. His approach will almost certainly produce a Kansas-style Brownback plan that will be a windfall for the wealthy. And that is no joke.
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But here's another thing. A fair and thorough study — and I think Carter will do one — is going to reach the same conclusion that experts have found about the federal tax code. Teabaggers may think we cosset the welfare class with government programs. But when you put the pencil to all the numbers, you find that corporate giveaways are far, far more costly than the hated welfare spending. We have too many federal tax breaks, as this thoughtful column illustrates.
Same thing in Arkansas. Every gaping exemption in our tax code is the product of an interest group. Take the sales tax exemption on advertising, for example. You'd need War Memorial Stadium to hold the radio, TV, newspaper, ad agency and other moguls who'd line up to fight removal of THIS exemption. (I've never opposed ending the exemption, by the way.)
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The social media is already buzzing with aggrieved howls from teabaggers and other Republicans.
Politico got the scoop on Crawford's big rollout this morning of a plan to make him look more like a man of the Delta than a tool of the fat cats.
Crawford will propose the additional tax— expected to be north of 2.5 percent — on individual income over $1 million as part of a broader fiscal responsibility package.“He’s watched the Gangs of Six and 100 and deficit commissions, as well as leadership’s budget and tax plan, and he feels there will never be a deal that will pass the Senate without a revenue component,” a Crawford aide said, describing the legislation without attribution because it has not yet been officially announced.
The rollout will be on KAIT-TV in Jonesboro, the most influential media outlet in the sprawling 1st Congressional District, where Crawford will face the winner of a three-way Democratic primary in the fall. His poll numbers have consistently reflected vulnerability, enhanced by his votes with Republican agenda bills punitive to the poor and elderly in his district.
Crawford will catch hell from Grover Norquist and other party controllers undoubtedly. But, whatever the motivation here, let's say it: He's right as Robert Bartlett and other sane conservatives have been saying. Federal finances can't be fixed solely by spending cuts. Taxes, at their lowest point in years, must be raised, too.
According to a source close to the Arkansan, the lawmaker “feels that if were going to make any progress in addressing the deficit and the debt eventually, then we need to find compromise.”
A fellow Republican, Sen. Johnny Key, Twittered this morning that Crawford would tie his tax to a constitutional balanced budget amendment. I don't think that will be sufficient sop to the millionaires, particularly since it would be a long and uncertain road to a budget amendment, while a tax increase would presumably be now.
Here's more on Crawford's plan, which will go nowhere, most likely, though it could have some popular appeal. The millionaire tax — 5 percent on income above $1 million — would go away in 5 years if the balanced budget amendment didn't pass.
PS: Potential Democratic opponent Clark Hall rolls out the embarrassing record Crawford compiled before becoming a born-again tax increaser:
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As expected, the final tally for the Little Rock library tax vote was overwhelmingly supportive — 4,548 to 699. That put the percentages at 86.7 to 13.3.
Not much to mine from precinct results on that outcome. But, believe it or not, every single precinct did not vote for the tax. I also was interested in the most tax-friendly among the city's precincts.
I was happy to see that the Free State of Hillcrest was again the most tax-friendly.
My precinct, 109 at Pulaski Heights Presbyterian, did what you'd expect from a precinct that supports every tax, Barack Obama, Joyce Elliott, abortion rights and gay adoption rights. We went 314-11, or 96.6 percent for the tax. That was exceeded by neighboring 112, which delves down into Capitol View and also votes at Pulaski Heights Presbyterian, with a 41-1 vote (who was that sorehead?). Best of all was Precinct 98, at Second Baptist Church downtown, which went 18-0 for the tax.
Two precincts actually voted against the tax, 130 in College Station, where the vote was 1-4, and 83 at Iglesia Bautista on Col. Glenn, which went 4-9 against the tax.
Get all your precincts here. (The two precincts that vote at the Fire Station in the Heights, another reliable good government outpost, went, together, 329-26, for the tax.
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Dumas notes that the mythology made an appearance in Republican Rep. Terry Rice's factually challenged pitch last week to be elected speaker of the Arkansas House.
Back in Little Rock, the resurgent Republicans in the legislature push for more and more tax cuts but also more services — protect Medicaid and forests, more road money for their districts and towns, tough sentencing. When timber tax receipts fell and forest-protection workers were being laid off, they demanded that the governor do something to save the jobs. They succeeded in last week’s legislative session in giving the trucking industry a tax cut on their big rig purchases even though the truckers said they didn’t want it and it means more than $4 million less money for roads and streets in their districts.Then the Republican candidate for speaker of the House, Rep. Terry Rice, made this pitch last week for his election—next year if his party wins enough House races: He and his party will see to it that the state income tax is cut so that the “depopulation of Arkansas” will end and the state can start to grow.
Depopulation? The state has been gaining population for 50 years and grew by 9.1 percent over the past decade. He said people were fleeing across the border to Texas and Tennessee to live to escape Arkansas’s income tax (and to live in communities with higher property and excise taxes). Texas does not have a personal income tax and Tennessee’s only applies to investment income. Arkansas lost population back in the days when its state and local taxes were the lowest in the United States.
That tax-and-growth record under Reagan and Bush? It was like that in Arkansas, too. When the current income tax rates were set, in 1971, and other taxes raised as well, the state set records for job growth the next three years. When Bill Clinton raised taxes in 1983 and 1987, we led the nation in manufacturing job growth. When Mike Huckabee cut capital gains taxes, the economy and the treasury fell into a slump and he had to raise income taxes for two years to keep from cutting health benefits and other services. When he set records for tax increases in 2003-05, the state grew modestly.
Mike Huckabee might have been the last Republican to understand and demonstrate how fiscal policy actually works, though he might be the last to acknowledge it today.
The full column follows:
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Net available revenues were down last month 11.2 percent below last year and 10.6 below forecast, according to the monthly Arkansas revenue report. Revenues were hurt by higher than expected individual income tax refunds.
See the full report here.
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The Arkansas Senate today didn't vote to allow consideration of a measure to repeal a sales tax break for truck rigs set to take effect July 1. That may mean the death of the measure for this session, which would likely mean death for eternity.
By a simple majority vote, the Senate could still suspend the rules to consider the legislation, though a two-thirds vote still would be necessary on a resolution to clear the way for a vote on the bill. Pasage requires only a simple majority. It takes three days for approval of legislation and the session is currently scheduled to close Friday, so time has grown very short. The biggest problem is that the Republican caucus has firmly decided now to oppose the repeal. A handful had been willing to consider the repeal, but refusal of the House to take up a parole bill sponsored by Sen. Jonathan Dismang and the loss of efforts to modify the state budget bill with some small cuts apparently soured those few Republicans. I'd take it to those lavishing money on the behemoths that tear up the roads and demand a roll call, but I don't have to run for election against a GOP message machine ready to lie about tax increases for those who cast what would be only a symbolic vote.
The truck lobby is crying crocodile tears after what looks more and more like a bait and switch.
As I wrote this morning, the 2011 legislature authorized an election on a diesel tax increase and also passed a sales tax break that was supposed to take effect only if the diesel tax was approved. Truck lobby later said it saw no point in working for the diesel tax because polls said it wouldn't pass. They said they'd like the sales tax break anyway, though they ultimately wrote a belated grudging letter saying half-heartedly that the tax break should be repealed because that was the deal.
A financially strapped state is now set to take a $4 million lick for a gift to truckers who tear up roads faster than we can repair them. Was this the plan all along? Easy to think so.
The weird series of little amendments to budget bills lately leaves a tiny bit of a possibility that a deal could still be worked out, such as a swap for that parole stiffening bill some senators want for sex offenders. The House has voted, with Republican support, to repeal the unearned truckers cash bonus.
PS — Not to worry about a loss to the state's general services from this tax break. The law provides that the Highway Department must transfer the lost sales tax revenue from its highway money to general revenue. They're rolling in it, right? They act like it. No highway commissioners pitched in on the fight to repeal the unearned truckers windfall.
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