Arkansas Blog

D-G ARTICLE, MAY 6, 2003

Pass taxes, budget, Huckabee exhorts
How revenue raised not as important as keeping services, he tells
legislators

BY MICHAEL ROWETT ARKANSAS DEMOCRAT-GAZETTE

Gov. Mike Huckabee urged lawmakers at the opening Monday of a special legislative session to set aside their differences and pass the budget bills and tax increases necessary to ensure that no Arkansan goes without vital services.

Legislators quickly positioned two tax bills for action today. One in the Senate calls for an additional tax on tobacco products, and one in the House would increase the state income tax. The governor said he would accept any of the increases that lawmakers have proposed, including higher tobacco taxes, raising the state sales tax,and adding an income tax surcharge. How revenue is raised isn’t important as long as the state meets its pressing needs, he said.

He said not raising more revenue would result in more damage than weekend tornadoes caused in Arkansas. "Our failure to provide adequate revenue for the budget that I trust we will enact would be far more devastating to far more people in our state," Huckabee said. "Literally ... hundreds of thousands of Arkansans will be dramatically affected by the failure of both the budget and revenue stream that is adequate to meet that budget."

Huckabee said $90 million to $100 million, beyond the $120 million estimated as normal growth, is needed annually to preserve state services. The governor, who spoke for 15 minutes before a joint session of the House of Representatives and the Senate in the House chamber, said some Arkansans believe that state officials can just "cut out the fat and the excess," but they are mistaken. The state has cut the current fiscal budget more than $380 million,precluding further cuts, he said.

"We’re no longer talking about merely shaving some excess. We’re talking about amputating valuable and vital limbs, if we don’t come up with necessary funding to meet the needs of those who depend on it," Huckabee said. He said the needs include mental-health services, nursing-home care for the elderly, human-development centers for developmentally disabled Arkansans, and ARKids First, which provides health care for children from low-income families.Also important is having enough money to open more prison space, Huckabee said.

He said lawmakers should be able to complete their business "this very week and not extending it longer" so state officials can, among other things, "tell the residents in our nursing homes - 75 percent of whom are Medicaid recipients -that they can sleep easy and rest well, that we’re not going to tell them theirbeds are no longer available."

Senate President Pro Tempore Jim Hill, D-Nashville, said he’s "not optimistic"that the Legislature will complete its work by week’s end."We are just trudging along," Hill said. "We get these curves thrown at us allthe time, and I am wondering when the next curve shows up."

The three times that Huckabee has called the Legislature into special session during his administration, the sessions adjourned the same week. An April 2000 session to set a spending plan for the state’s tobacco settlement money adjourned after five days because an impasse developed between the House and Senate over how to spend the money. A December 2000 session to re-enact a constitutionally suspect voter-approved sales tax increase lasted three days. The most recent special session, called in June 2002 to plug a $56 million budget shortfall, also took three days.

SPEECH REACTION

House Speaker Herschel Cleveland, D-Paris, who has criticized Huckabee for supporting an end to the regular session April 16 without a state budget plan in place, praised the governor’s speech.

"I thought it was right on, and I thought he dealt with the issues that need to be dealt with, and the reason we’re here," Cleveland said. "I hope that it goes like the governor laid it out."

Rep. Jeremy Hutchinson, RLittle Rock, one of 34 House members who blocked extension of the regular session, said of Huckabee’s speech, "I don’t like any speech that asks for tax increases. "It’s no fault of the governor, but it’s not one of the more enjoyable speeches I’ve listened to. It’s one of necessity, and I thought he outlined what’s at stake. I would have rather listened to the president talk about tax cuts."

President Bush was in Little Rock touting his federal tax-cut plan. Unlike the federal government, Arkansas by law isn’t allowed to spend more than it collects in tax revenue. The federal government is allowed to run massive  deficits but
the state government isn’t.

A bloc of 27 Republicans, including Hutchinson, and seven Democrats on the last day of the regular session blocked House consideration of a tobacco-tax increaseand budget bills. Several said it wasn’t fair to increase taxes when some
lawmakers weren’t willing to forgo state money for local-level capital-improvement projects in their districts. Hutchinson said Monday that it would be "a lot easier" for him and other House conservatives to vote for tax increases in the special session if
lawmakers don’t expand the General Improvement Fund spending that was included in  the governor’s special session proclamation.

"If that gets expanded to include everything under the sun, you’re going to have some heartburn from conservatives," Hutchinson said. "There’s going to be a lot of additional concern out there about are we as legislators sacrificing any, or are we just going out and taxing our citizens?"

Senate Democratic Leader Percy Malone of Arkadelphia said he and other lawmakersstill plan to seek funding for local projects. Malone said the appropriations bills for those projects -such as for a program that helps developmentally disabled children in Malone’s districts - passed during the regular session. He said he doubted any of the House Republicans who oppose such projects couldstop them because the funding bill for the General Improvement Fund only takes asimple majority to pass. In the Joint Budget Committee on Monday, several appropriations bill thatweren’t passed during the regular session were recommended, including the Public School Fund.

The Revenue Stabilization Act - which determines the distribution of revenue for the 2004 and 2005 fiscal years for state agencies - will be acted on in the committee today. The budget committee today also is to consider a bill to fund General Improvement Fund projects. Sen. Denny Altes, R-Fort Smith, said Huckabee’s address was "a good, short,sweet speech" but probably won’t get Altes to vote to raise any taxes. "If we raise cigarette taxes, we’re already losing a lot of business
across theborder, so we are going to get hit even harder," he said.A 1 percent increase in the sales tax would make Arkansans in his district even more inclined to "buy big-ticket items" in Oklahoma, Altes said.

HUCKABEE STATEMENT NOV. 14

 Little Rock, AR – Chip Saltsman, Huckabee for President Campaign Manager, issued the following statement in response to a YouTube video being circulated on the Internet. The video is from an anonymous source and contains excerpts taken out of context from a speech when then-Governor Mike Huckabee was opening a special legislative session in 2003.
 
“The governor called a special session. Several proposals had been made by legislators for raising the revenue to address a budget shortfall for necessary services. In the end, a state income tax surcharge was passed with the provision that it would be a temporary tax. Most temporary taxes become permanent. The governor made sure the legislature kept its promise to keep the tax temporary.
 
“More than 90% of the state budget pays for prisons, education, and Medicaid. None of those would have been funded without that budget. The governor acted responsibly to protect Arkansans who are the most vulnerable but the least connected politically.
 
“The fact is that Mike Huckabee cut taxes 94 times – including the first broad-based tax cut in the history of the state of Arkansas.  While governor, he balanced the budget and returned almost $400 million to Arkansas taxpayers, and left office with almost a $1 billion surplus. The ‘Huckabee Surplus’ enabled his successor to follow Huckabee’s lead to begin the elimination of the state sales tax on food.
 
“Despite what some Washington insiders who don’t understand the fundamentals of governing or leadership will have you believe, when you discern the facts, the reality is that Mike Huckabee is a true fiscal conservative.”