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Funny money 

I tend to trust Richard Weiss. But that doesn’t mean the head of the state Finance and Administration Department is not a politician as well as a bureaucrat. You don’t work for Bill Clinton, Jim Guy Tucker and Mike Huckabee without survival skills. I’ll give Weiss the benefit of the doubt on his state revenue forecast for next year. But I have to note how very small numbers made a big difference, maybe even to the future of our state. This discussion begins with the special session of 2003, when the legislature enacted a 3 percent income tax surcharge. If your state income tax bill is $1,000, the surcharge costs you $30. The surcharge produces most of its income from the wealthiest taxpayers, a rare progressive measure in a state that keeps raising taxes on poor people’s groceries. The tax surcharge had a sunset provision. If state revenues were forecast by DFA to grow by more than $156 million in the year beginning July 1, 2005, the surcharge would expire. That put the survival of the surtax solely in the hands of Richard Weiss. (Legal question: Is it constitutional for the legislature to delegate to an executive branch employee the decision to end or extend a tax?) It was close, but Weiss delivered the call that his boss, Gov. Mike Huckabee, yearned for. Weiss said that the $3.629 billion “available for distribution” this year would rise by 4.4 percent next year to $3.789 billion, or by $160 million. That’s only $4 million more than the increase required for the tax to die. Had he forecast revenue growth a mere tenth of a percent lower, at 4.3, the tax would not sunset. To put it in layman’s terms, that’s a $20 difference in the price of a $20,000 automobile. Maybe Weiss didn’t stretch to cut it that fine. The Legislative Council has a similar forecast. But there’s another bit of math manipulation in Weiss’ forecast. The law says the increase is supposed to be calculated by comparing the forecast against revenue “available for distribution” this year. Weiss insists that money “available for distribution” does not include this year’s unappropriated surplus of more than $100 million. Others, including lawyer/legislator Jodie Mahony, see it differently. It’s a critical distinction. Had Weiss included the surplus — which indeed was part of state revenues this year and thus available for distribution if the legislature chose to distribute it — his forecasted increase in revenue would have been insufficient to sunset the tax. Forget arithmetic. Arkansas needs the surcharge and can’t easily bring it back once dead. Huckabee’s budget included no money for school construction required by the state Supreme Court in the Lake View decision. It included none of the additional money promised to expand pre-K education. All agree reaching kids in early childhood is one of the best things we can do to equalize learning opportunities. The governor’s budget coldly omitted these things, rather than admit the clear need for the surcharge. One thing seems clear. And it’s not measured in decimal points. Arkansas leaders are crawfishing from the court order to improve schools. They seem content as ever to limp along with half-measures until a court inevitably rules again that we’ve failed our children. Then it’ll be time to raise the tax on rice and beans again.
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