Revenue raid -- UPDATE II | Arkansas Blog

Monday, March 26, 2007

Revenue raid -- UPDATE II

Posted By on Mon, Mar 26, 2007 at 8:30 AM

A reader reminds me again today of something I meant to mention earlier. Legislators continue to covet the real estate transfer tax fund that was enhanced a few years ago with a solemn commitment to use the money for parks, historic preservation, museums and other cultural and heritage programs. A couple of proposed raids are lurking, including one said to be for a legislator's "pet project." Isn't that the definition of most legislation? In any case, we're going to try to check. One bill is supposed to come up in Joint Budget today. (Rep. Wilhelmina Lewellen's HB 2496, to create a homeless assistance fund, is one proposal that would tap the real estate transfer tax. It's a worthy idea, as are many. But why must good Peters be robbed to pay good Pauls?)

Readers with some insight are invited to write me at max@arktimes.com if you can't post to the Blog. And, please, live commentary is welcome from the expected euthanasia of animal cruelty legislation in committee today.

UPDATE: Reader says the Lewellen bill transfers ALL of the money once devoted to cultural programs to general revenues, to be split up in the shadowy revenue stabilization process. That's how we'll pay for more corporate welfare. That's how the governor will build a little insurance for two years from now, when the orgy of spending and tax cutting will come due against a likely flat economy. Come to think of it, the use of surplus for one-time spending; the failure to make permanent some of the education increases; a new beer tax; a capture of real estate tax, it could start to build a mosaic, don't you think?

UPDATE II: I'm now getting a different report. That there's a deal, to be sure. And it will take about $9 million of reserves from the real estate transfer tax trust fund (out of about $18 million currently), at a rate of $4.5 million each of the next two years, and move it to some agreed-on purposes. But the tax will continue to flow to the trust fund, rather than being permanently re-directed. So there's somewhat less moaning about it than in 2005. The old beneficiaries, in other words, think the outcome could have been worse, had the idea of some other House members carried the day. So many of them will allow this deal, which has Gov. Beebe's backing, to go forward. Beebe reportedly killed a more damaging proposal from an East Ark. legislator.

A PS: Given the wise old government agency heads who help distribute this money, you have to wonder what they've learned. We thought all bureaucrats knew that you ALWAYS spent up every dime at the end of the budget period, lest some legislator come along and covet that money for another purpose. The mistake, in other words, was letting a reserve accumulate rather than passing the money out quickly for projects. Or at least that's how one long-time beneficiary of the fund sees it.

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