McDaniel cleans up after himself | Arkansas Blog

Tuesday, July 13, 2010

McDaniel cleans up after himself

Posted By on Tue, Jul 13, 2010 at 5:43 AM

So I see Attorney General Dustin McDaniel has taken the only sensible path remaining on the free car imbroglio. In addition to giving up his, he'll reimburse the state for past personal use by estimate. He's also apologized for singling out Lt. Gov. Bill Halter for criticism. Halter has taken the car, but declared it as income. McDaniel let his personal feelings about Halter color his overreaction to this issue and the result has been a tsunami of bad publicity for the one public official, McDaniel, who at least gave up a perk.

OK. Now can we get back to the real issue. Do free personal vehicles amount to a salary supplement to state constitutional officers, prohibited by the state constitution? I STILL think they do. Somebody could sue for a declaratory judgment. Or, state employees could cause me to fall away in a dead faint by not trying to cadge any freebie available at taxpayer expense (two of them if you are Land Commissioner Mark Wilcox.)

McDaniel still thinks his original position, that taking the car was a non-taxable event, was correct, but says he now thinks the best position going forward legally and ethically is to pay up and pay for his own car. Hard to see how that can be criticized, but there's a feeding frenzy on at the moment.

And I repeat my call for a thorough audit of city, county and state governments for adherence to proper tax reporting of taxpayer provided cars for public employees.

ON THE JUMP: McDaniel's full remarks yesterday.

I’m reminded of what President Clinton told me when I first became AG. He said, “You know Dustin, being attorney general is the best job in state government. You don’t have to appoint anybody and so therefore you don’t have to disappoint anybody and if anything goes bad you just blame it on the constitution.” There have been a lot of times where we have thought back to that advice.
Nobody expects their public officials to be perfect. Let me be clear, I am not perfect. Nonetheless, I try to be very thoughtful and careful in my words and my deeds. Last week, however, I must admit I wasn’t very thoughtful about how I handled some questions from the press about our constitutional officers and state cars.
Questions in years past have always been about how much gas we used and how many miles we drove, etc., but last week the questions were different. They were about how we treat personal mileage. I have to admit I never really thought of it much before last week. Most of us just did what our accountants said to do, which is to assume that we’re on duty all the time wherever we are. I was advised just not to worry about my personal mileage.
In my gut I should have known better. Bill Halter and Mike Beebe did know better than that and they thought they needed to do something about it rather than just not worry about it. I applaud them both for having the foresight to recognize this as an issue. So they did what anyone in private business would do, which is estimate their personal mileage, treat it as income and pay the taxes on that income.
When I was asked about it, my comments were unfairly critical of the lieutenant governor and I regret that. That certainly wasn’t my intent. I wasn’t trying to be critical of anyone. I was trying to analyze my way through some of the issues.
I said some things that weren’t just less than thoughtful. They were just dumb. I sincerely apologize for any offense I may have caused.
Still, the legal questions are not dumb. The legal questions are multifaceted.
So let me be clear, I have never criticized anyone for paying taxes on their income. The problem in this case is that I believe the constitution prohibits us from accepting personal mileage on vehicles as extra income in the first place. That led me to the question: If you can’t accept personal miles as extra income and you shouldn’t just ignore them, what should I do?
So on Wednesday of last week, I did the only thing I knew to do, which is, I went out and bought a pickup truck and I turned in the keys to the state’s SUV.
That still left some lingering questions about how to handle the last 3 1/2 years. I started doing some research, and on Thursday I found a statute. Arkansas Code Annotated 19-4-901, in my opinion, addresses the matter. It says state employees who drive a state vehicle for any personal mileage should reimburse the state at a rate of 15 cents per mile. To me that’s the best option.
You’re not ignoring personal miles. You don’t accept personal miles as income, because even if you do pay taxes on it you’ve created a constitutional issue. Rather, you’re simply reimbursing the state for use of the vehicle for anything other than strictly official business. I believe that this is one reasonable course. The statute specifically exempts constitutional officers, which I guess is why it hadn’t come to my attention any sooner. Nonetheless, I think it’s the best way for me legally and ethically to resolve the issues going forward.
I determined on Friday that in 3 ½ years I put 96,773 miles on two SUVs. A generous estimate of personal use would be about 20 percent. That’s 19,354 miles. At 15 cents a mile, that’s $2,903.19. And if I wasn’t here with you in Eureka Springs, I would have written that check to the state this morning, otherwise I’ll write it this evening and deliver it to the office tomorrow morning.
This accounting question, which is what this is, never should have become political, and I am sorry that it did.

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