Arkansas rarely gets to show the rest of the country its dust, especially in economic performance, but it happens when the country falls into recession. Employment and consumer spending tend not to decline as steeply or as quickly in Arkansas as in the industrial states, partly because Arkansas has about the puniest manufacturing base in the country and little to lose when the demand for consumer products subsides. Except for food and fiber, we don’t make many of those products in Arkansas.
But the difference between Arkansas and the country as a whole has never been so distinct as in the current downturn. Most state governments are cutting services sharply and pleading with the federal government for assistance while Arkansas continues to experience healthy state revenues month after month. One reason is that Governor Beebe budgeted so frugally in 2007 and again in the executive budget he has filed for 2009-12. So can’t we feel self-satisfied and maybe even a little superior as the new administration ponders how the national government can help states like California, New York and Ohio?
Or, though less needy at the moment, should we demand Arkansas’ per-capita share of the stimulus/bailout money that is being readied for the new Congress on Jan. 20? If the package is in the range of $700 billion, which is likely, Arkansas’ contingent share would be about $7 billion, which is roughly the size of the whole state budget for a year.
Arkansas could build a lot of roads, bridges, schools and prisons and provide a lot of medical care for $7 billion. That would provide quite a jolt to employment and spending.
Don’t get your hopes up. Arkansas will not get that much help — not even close — and maybe it should not. Unemployment runs considerably below the national average, and the pain from this yearlong recession is not nearly as evident as it is in Ohio and Michigan, where unemployment early in 2009 may hit double digits, though there is evidence that the trough lies ahead for Arkansas, perhaps by early spring.
But Governor Beebe and our congressional delegation can make a persuasive case that the needs actually are greater in this still poor state. Arkansas has been in a recession for far longer than most of the nation. Indeed, it has never been out of a recession since 1837. Arkansas is doing all right only in relation to Arkansas in 2007, or 2000, or 1984. The unemployment rate measures only the people actively looking for work and not finding it, not those who have long since abandoned the job market or accepted part-time and piecemeal labor. Arkansas is not slashing public services like California only because it never provided many of the human services that are taken for granted in more prosperous regions.
Its school buildings are more dilapidated, its highways rougher and more dangerous, its health services stingier, its incarceration rate higher and its prisons more crowded, its college-going and graduation rates lower, its family income levels lower than most of the states except those immediately to our south. Nowhere in America is there greater need for an economic stimulus.
The governor and our delegates need to make that case, though Arkansas’ voice is likely to be faint in the cacophony in Washington, and not merely because the economic signals in Arkansas appear superficially to be so strong. Nearly alone among the states, Arkansas went defiantly against the Democratic trend in the 2008 election, giving the Democratic candidate an even weaker vote than in the previous two presidential cycles. That should not count in the reckoning of needs and perhaps it won’t. The new president seems unusually averse to punishing his critics and those who simply disagree.
The legislature, which assembles a week before the inauguration, should get Arkansas’ house in order by clearing away the obstacles to federal assistance to infrastructure improvements, including public school buildings. Communities all over the state that have been unable to produce the matching funds for state school construction grants should be able to move instantly to claim federal assistance for their match. The state Highway Commission says it has a raft of highway and bridge projects ready for contract.
President-elect Obama is supposed to be considering liberalizing the matching formula for Medicaid to help states with rising caseloads and declining tax receipts. Because it has such a high population of poor, Arkansas already has one of the most favorable matching rates in the country — nearly 75 percent federal — but within 18 months it will find itself needy. Senator Blanche Lincoln, who is on the Senate Finance Committee and its health subcommittee, may be particularly helpful in seeing that any formula relief does not skip Arkansas and other states with high federal matching rates.
Now is the time that we miss an experienced and powerful congressional delegation. Let us hope that Lincoln, Mark Pryor and our lusterless House delegation can rise to the occasion.
