Surprise! Right-wing think tank criticizes Arkansas taxing and spending | Arkansas Blog

Tuesday, August 8, 2017

Surprise! Right-wing think tank criticizes Arkansas taxing and spending

Posted By on Tue, Aug 8, 2017 at 10:18 AM

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The Mercatus Center, a unit of George Mason University, the go-to university for right-wing thinking on law and economics, is touting a report by Arkansas academics that says Arkansas government has it all wrong — too much spending.

The study comes from our own leading right-wing economists, Jeremy Horpedahl and Jacon Bundrick of UCA, who work in an ideologically oriented research unit built on Koch contributions and other financiers that then-University President Tom Courtway refused to identify. They are reliable cheerleaders of the notion that government is too expensive and taxes too burdensome

In defense: They are purer free enterprisers than some on that end of the spectrum, with critiques of Arkansas's love of corporate welfare handouts to private business. This spending topped $200 million in 2013, they note, and likely will go higher with 2016 legislation that allows the state to give even more tax money away to private businesses.

Their latest effort says Arkansas has higher spending per capita than border states.

Their premise is that government has grown without providing more services. Example cited in news release:

Education transfers have increased dramatically and constitute a relatively large portion of the budget. Arkansas’s education expenditures jumped from $1,206 per capita in 1992 to $1,807 per capita in 2007.
Well, yes, A little ol' thing called the Lakeview decision (mentioned in the authors' article) in 1992 forced the state to meet its long-ignored constitutional duty to provide an equal and adequate public education. So spending jumped. But you need to consider the growth in spending against the inflation rate — 71 52  percent over the same time. That means the Arkansas legislature is actually creeping ever farther behind the standard set by the Arkansas Supreme Court in Lakeview. CLARIFICATION: The authors say the spending growth is in dollars adjusted for inflation, so it is an increase on top of the inflationary increase. It is nonetheless true that in recent years the spending increase has regularly been less than the amount determined to maintain the mandated adequacy levels, about a percentage point below in the most recent year.  Percentages also mislead when the base is so small, as was the case in Arkansas, long a laggard in education spending. Here's another comparison, for example, from the notorious liberals up at the UA school reform outfit: They show an increase in total school spending from $6,945 in 2000-01 to $11,598 in 2013-14, a 40 percent rise against a 42 percent change in the value of a dollar.

Other high points of their paper:

* Public pensions are underfunded by actuarial standards and getting more expensive. True. And if legislators and the public jobs they all try to snare after legislative service didn't have public pensions themselves, I'd have expected a movement by now to wreck the defined benefit pension system in Arkansas, just as the Kochs, ALEC and others think is proper. It has been done throughout private industry and many other public agencies. Good for business. Not so good for Jane Six-pack.

* Public safety expenses have grown more than 100 percent, triple the rate across the 50 states. Yep. We love to lock people up and the legislature recently applied pressure to make the prison population even bigger.

* "Welfare spending" is the largest and fastest-growing component of state spending. What they call welfare I call health coverage for the working poor, thanks to the Medicaid expansion. The right-wingers tend to overlook the enormous economic and health benefits of this expansion, along with its influence on leveling medical costs.The social Darwinists think you are entitled only to what you can afford to buy with your own money. Does the constitutional preamble of "general welfare" include health coverage as well as roads and police? Here, I guess, we'll just have to agree to disagree.

Solutions? They have a few for government strangling. Rewrite budget law to rebate money when tax revenues exceed projected growth. Encourage more charter schools. End corporate welfare. On that last, I'll give them an amen.

UPDATE: Ernest Dumas coincidentally has written a column this week about how the back and forth in Congress over Obamacare has been reduced to its essence — should government help people with health coverage or not. It follows.


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