Governor Beebe took office two years ago with a reputation for wizardry in the legislative process developed over two decades in the state Senate. Nothing has happened to sully the reputation, the governor having gotten every last thing from the legislators that he asked for, including a big tax cut and an even bigger tax increase, the first serious tax on natural gas production in the state’s history.
But those were good times. Let’s see his legerdemain when the economy is in the ditch, revenues are shrinking and the demand for government help is going in the opposite direction. How will he get wary lawmakers to broaden the opportunities for Arkansas people in such a climate? We all tend to be summer soldiers in such times.
Beebe’s state-of-the-state address, delivered yesterday on the General Assembly’s second day, sounded like the expansive programs that Dale Bumpers and Bill Clinton used to outline, and largely achieve, 25 and 35 years ago. He proposes to give the public schools another shot to propel them toward the adequate and equal education that the Constitution mandates and that the legislature and the governor were forced by the courts to recognize. He wants to sharply increase the availability of college scholarships to the needy and the patently gifted. He wants to mend the health-care safety net in half-a-dozen ways, all costly and all worthy. He wants another $50 million to bribe industries into locating in Arkansas instead of another state with a slush fund. And he wants to cut the sales tax on groceries still another penny on the dollar, which will trim the revenues available for all those programs by another $40 million a year or so. A few practical lawmakers don’t think you should or can do both, but Beebe says he promised the tax cut in 2006 so he’s going to see it done. We will put our money on his doing it.
Anyone who can’t pass a tax cut is toothless indeed.
All of that sounds more insurmountable than it is. The increased school aid is relatively small and the state’s conservative budgeting will permit it. The lottery, which the voters approved in November and which the legislature will implement, will provide $25 million to $60 million a year starting in 2010 to enlarge college aid (the lottery sponsors insist that it will be at least $100 million and probably more, but we’re dubious).
The ambitious health program is the rub. Current taxes are not apt to support any of the expansion unless President-elect Obama performs a miracle with the American economy. Beebe wants to establish a statewide trauma-care system. Arkansas is nearly alone among the states in not providing a reliable 24-hour network of emergency medical treatment, and hundreds of Arkansans die needlessly every year as a result. He also would expand the ArKids First medical care program for uninsured children, a program that he authored as a state senator in 1997, by raising the income eligibility of families 200 percent to 250 percent of the federal poverty line. He would intensify cancer research, expand community mental health centers and begin a residency program for medical students in northwest Arkansas.
To pay for all those services he proposes raising the excise tax on cigarettes by 56 cents, which would almost double the state levy on a pack of smokes, and also raise the impost on smokeless tobacco. Raising those taxes will test the governor’s celebrated abilities to corral lawmakers behind his program because the taxes will require a three-fourths vote in each house.
As few as nine legislators out of 100 can block the legislation, if they all happen to be in the Senate. The tobacco lobby, always potent, is gearing up to fight the taxes. A few border-state legislators, particularly those near Missouri and Tennessee, will find the taxes hard to vote for because their merchants will claim that the tax will chase customers across the state line. A sizable contingent of lawmakers, mostly Republican, ran on no-tax pledges.
That tax may prove beyond the governor’s abilities, which would be too bad. As part of our encyclopedic services, we offer a solution. Rather than an excise tax on the volume of cigarettes, like 56 cents a package, convert it to a sales tax, which is a percentage of the retail value. That way, it triggers a different constitutional threshold. A simple majority would pass the bill. A leader of lesser ability than Beebe could do that.
The governor lamentably did not mention another great need that we hope he embraces. Arkansas is one of the few states without a trust fund to create affordable housing for low-income families, and no state needs one more. That could be done with a small increase in the fee on real-estate transfers. Perhaps that will be his encore if he achieves the health-care programs.
