Category Archives: State government

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

The last gravel stretch of highway in Arkansas, part of Highway 220 in Crawford County, will not be paved for a while, providing the latest example of how uncertainty about the federal government affects so much of everything these days.

Highway Department officials decided not to move forward with that project, along with two others, at its next bid letting Jan. 27 because they can’t count on the feds. The process works like this: The state builds highways, bills the federal government, and then is reimbursed for part of the cost. Federal funding pays for about 70 percent of highway construction in Arkansas.

Highways traditionally have been funded mostly from state and federal motor fuels taxes, which have the advantage of being a user fee. Unlike so much of the government, the person benefitting from the government service at least indirectly pays for it. In Arkansas, the combined taxes are 40.2 cents per gallon of gasoline and 47.2 cents for diesel. At the end of each fill up, drivers can calculate how much they paid the government for their highways without needing an accountant and without fear of the IRS.

But the federal portion of the motor fuels tax (18.4 cents per gallon of gasoline and 24.4 cents for diesel) hasn’t been raised since 1993. Since then, highways have become more expensive to build and maintain, while cars have become more fuel-efficient, which means drivers are buying less fuel and paying less in fuel taxes.

As a result, the federal Highway Trust Fund, which pays for highways, almost dropped to zero in 2014. At the last minute, Congress, as it so often does, patched it with a quick fix funded largely by gimmicks that borrowed from the future and will only provide enough money until the middle of 2015. After that, money will come in and out, but it won’t cover everything, and there will be nothing in the bank. That situation makes it hard for highway departments to plan projects that cost millions of dollars and require years of work.

The quickest solution is to raise the gas tax, but that’s unlikely to happen because voters don’t want to pay more at the pump. So in recent years, money has been shifted to highways from the rest of the federal budget, adding to the national debt. Congress is looking for other solutions, some of which are responsible and some that are, ahem, more creative. Will it decide to do anything, and if so, what will that be? No one knows.

If this were simply about one stretch of gravel road in Crawford County, it wouldn’t be a big deal. Unfortunately, uncertainty about Congress and the federal government pervades the economy – which, it should be pointed out, is doing well right now. Maybe we’re all getting used to it, but these fiscal cliffs and government shutdowns still take a toll.

In December, Congress did pass a $1.1 trillion bill that will fund a big part of the government through the rest of the fiscal year, so there shouldn’t be too big of a crisis for a while. But Congress also kept some of the waters muddied by extending 55 tax deductions retroactive to the beginning of 2014 but not for 2015. The purpose of a deduction is to encourage behavior, but for that to happen effectively, people have to know what the rules will be moving forward. Beneficiaries of those deductions might assume Congress again will extend them retroactively, but they don’t know that with certainty, and that affects how they will plan and invest.

The big national argument is always about the size of the government, and rightfully so. But the truth is that people are resourceful, and if they know the rules, the economy can thrive even when the government is bigger than it should be. Like a tree growing on a rocky mountain, job creators of all sizes will take root and grow in less than ideal conditions.

But that tree only grows because the rules are clear – keep digging to find the nutrients, and reach toward the sun. This can be done even in inhospitable rocky terrain.

It’s much harder to do it in shifting sands.

K through job education

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

The elected official in the state Capitol making the biggest impact next year will be Gov.-elect Asa Hutchinson. The second most impactful elected official may be a 74-year-old grandmother with an agenda.

That would be Sen. Jane English, R-North Little Rock.

English spent her career in economic development and will use her chairmanship of the Senate Education Committee to try to change how Arkansas educates and develops its workers. She says the education system is composed of too many disconnected silos – K-12 public schools over here, colleges and universities over there, career education in a third spot, etc. – that don’t always prepare students for the workforce.

“We typically think of education as K through 12, but for me, education is K through job,” she said after selecting the chairmanship.

She wants to reform a system that did not serve the state well enough during her career in economic development. There’s also this motivation: “I have a 17-year-old granddaughter, straight A student, takes AP (Advanced Placement) courses,” she said in an interview Dec. 12. “She’s going to play softball with the Lady Razorbacks. Well, she’s fine with this whole pattern. But then I have a grandson, that may not work for him. I had a grandson, and it didn’t work for him at all. He was not an AP person. He was never going to college, but he has a good career now.”

English is not the first or the only one making this point. Lt. Gov. Win Rockefeller would say the education system is like a string of water pipes laid end to end but not fastened together. Hutchinson talked a lot about workforce development in the gubernatorial campaign. In September, the State Chamber of Commerce hosted a summit highlighting the need for Arkansas’ education system to be more responsive to the job market.

Changes already are occurring, particularly at the local level, to make the system more connected and responsive. Many high schools offer students opportunities to earn significant college credit. Bearden High School students are bussed to Southern Arkansas University Tech each day for academic and career classes. At Maumelle High, students basically select a major and take classes that are tailored to their interests and that prepare them for a job. Colleges and universities are becoming more responsive to workforce needs. The University of Arkansas – Fort Smith, for example, created a robotics program after surveying local industries and discovering a surprising number needed training in that area.

Despite these individual successes, Arkansas needs a more comprehensive overall strategy, a reallocation of resources, and a different mindset. And that’s where English has become a pivotal figure. In February, she switched her vote on the private option – until then, one vote short of passage in the Senate – from no to yes in exchange for a commitment from Gov. Mike Beebe to focus on the issue. As a result, for much of the year she chaired weekly meetings each Monday with various state education and economic development officials. Shane Broadway, director of the Department of Higher Education, says one of his staff members jokingly referred to the meetings as “English class.”

English said the meetings have produced no concrete proposals, though she has some ideas. She said many of the needed changes don’t require legislation.

Whatever the Legislature passes will be the result of collaboration and compromise. English’s main role will be to continue doing what she has already done: serve as a catalyst. Broadway said state agency heads were already discussing the need for changes, but English’s switched vote was the spark. As she explained it, “Sometimes you have to have something wild that starts things in motion and gets people to start talking. Otherwise, you’re just churning around forever and ever.”

The private option, prisons, and other issues will get the most attention this session. But, quietly, significant workforce development changes could occur. The facts are clear, the need is obvious, and the agreement is broad. Too many students aren’t being prepared for actual jobs, while too many jobs are unfilled because workers with the right skills aren’t available.

Now the Senate Education Committee is headed by someone whose top priority is doing something about it. We’ll see if the other legislators speak English’s language.

Should legislators get a raise?

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

Let’s start by emphasizing that I was the one who brought up the subject with Rep.-elect Ron McNair, R-Alpena. He did not approach me to complain in print.

The subject is pay for state legislators.

McNair owns an auto shop in Alpena in north Arkansas. He is his only employee. He’s been an unpaid school board member almost 30 years. He narrowly won the Republican primary in May and didn’t face a Democratic opponent, so he’s been driving back and forth to Little Rock at his own expense to get his feet wet before his term actually starts. He will close his shop’s doors at least three months next year while the Legislature is in session. He says he has loyal customers, and he’s worked out arrangements, but that can’t be good for business. He did not know what his legislative salary would be before the election, and he’s still not sure.

That’s because the pay varies member to member. The base pay for House members is $15,869, but legislators also can take advantage of up to $14,000 per year for office expenses they are required to itemize. Some pay themselves rent or pay family members a salary. They also are reimbursed for per diem expenses (lodging and meals) each day they are in Little Rock – $150 per day if they live 50 miles outside the Capitol and $61 if they are closer. They also are reimbursed 56 cents per mile driven. They can be vested in the state’s retirement system if they serve long enough, and they can purchase health insurance like other state employees.

Sounds like a good deal, right? Well, being a legislator is a pretty demanding part-time job involving regular sessions, fiscal sessions, special sessions, interim committee meetings, constituent phone calls and interrupted grocery trips. Many legislators actually do have legitimate office expenses, such as phones. Mileage reimbursements feel like an extra paycheck until you have to replace your worn out tires. Legislators also must stay somewhere when they are in Little Rock. Some pay about $400 a month for rent at the Capitol Hill apartments beside the Capitol.

Sen. Jon Woods, R-Springdale, isn’t sure how much money he makes, either, and he’s been in the Legislature since 2007. During a phone interview, he figured up that his actual take-home pay after expenses is roughly $1,900 a month, but that was kind of a back-of-the-envelope estimate. Being a legislator is his only job; he decided couldn’t serve an employer effectively while also driving back and forth to Little Rock.

Legislators likely are about to get a raise thanks to Amendment 3, passed by voters in November, which included a number of ethics-related provisions. In the past, legislators were responsible for voting for their own pay raises, so they didn’t do it very often. That duty now falls to a citizens commission appointed by legislators, the governor, and the chief justice of the Supreme Court. It will be easier for the commission to raise salaries than it was for the legislators to do so.

Woods, one of Amendment 3’s sponsors, says the current salary structure creates an unnecessary strain on legislators and encourages bad behavior. One behavior, having individual legislators’ meals bought by lobbyists, has been ended by another provision of Amendment 3. Now that legislators are buying their own meals – and they eat out a lot – they’ve effectively received a pay cut.

If legislators were getting rich, there’d be a lot more candidates for office. If they were going broke, they wouldn’t run for re-election. We have in Arkansas a citizen Legislature composed of people who have to pay the bills. It would be best if the salary commission raised base pay while reducing the perks that make it hard to tell who’s making how much. And yeah, legislators should make more money than they do now.

There is the argument that they should be paid nothing, that serving in the Legislature should be just that – a service.

That argument makes sense if all we want in the Legislature are the independently wealthy, the retired, and the dishonest. Which would mean no more laws would be passed by people who own small businesses and fix cars for a living.

Water, water everywhere, but not enough below

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

It makes up about 71 percent of the earth’s surface and about 60 percent of the adult human body. All our lives, it’s been available in abundance, particularly in Arkansas, and it still is, but we’ll have to change the way we obtain it. And it won’t be cheap to make that change.

I’m talking, of course, about water. Arkansas consumes about 11 billion gallons a day – enough, over a year’s time, to cover every inch of the state 4.2 inches deep.

Eighty percent of that amount is used for agricultural irrigation, according to a draft of the Arkansas Water Plan 2014 Update. Updates are completed every couple of decades by the Arkansas Natural Resources Commission.

The report ranks thermoelectric power second in water use, at 11 percent. Drinking water makes up only 3.5 percent. According to Ed Swaim, the commission’s water resources division manager, almost as much water is used for flooding fields for duck hunting (a yearly average of 259.2 million gallons a day) as is used in all manufacturing (291 million gallons a day, and dropping).

About 71 percent of Arkansas’ water comes from underground, and that’s a problem, because we’re using up groundwater far faster than the water cycle can replenish it. Currently, about 8.7 million acre-feet per year are being pumped, but the water can only be replenished at a rate of 1.9 million acre-feet a year, Swaim says.

That means water tables are falling, fast, and have been for a long time. Farmers are drilling their wells deeper and deeper to get the same water.

Unlike some states, Arkansas can solve this problem fairly easily. Conservation measures will help some. More importantly, the state is covered with rivers, lakes and streams. We have so much surface water that, according to the Water Plan, the state can meet its needs by simply diverting surface water for crop irrigation. The Water Plan says we have enough to do this without detracting from water-bound transportation or harming fish and wildlife – an assertion with which not everyone will agree. Arkansas can meet its needs without even touching the mighty Mississippi River, which would be a headache because that river borders other states.

The Water Plan estimates it would cost between $3.4 billion and $7.8 billion to do this, which would come from a variety of government funding sources and user fees. In other words, the farmers would pay for part of it, and then pass on the costs to consumers. Arkansas’ annual agricultural production is valued at $9.7 billion, according to the plan. Without water, it would be a lot less.

In his book “The Seven Lamps of Architecture,” the English critic John Ruskin wrote, “Therefore, when we build, let us think that we build for ever. Let it not be for present delight, nor for present use alone; let it be such work as our descendants will thank us for, and let us think, as we lay stone on stone, that a time is to come when those stones will be held sacred because our hands have touched them, and that men will say as they look upon the labor and wrought substance of them, ‘See! this our fathers did for us.’”

The quote is displayed on a placard on the second floor of the Arkansas State Capitol – a building still as sturdy as when it was completed a century ago.

Not to be too negative here, but we don’t talk much about building for forever these days. Today’s thinking is more about making the monthly payment on the 15-year and 30-year bank note. On a larger scale, problems aren’t solved so much as patched temporarily. Much of our political system, and indeed our economy, is based on buying time – until the next election or the next harvest or the next quarterly report.

In this case, Arkansas has a growing threat to its economy and way of life – current and especially future. For a while, farmers can keep just drilling deeper. But at some point, the wells will go dry.

So we’ve got a problem, and we’ve got a solution – an expensive one. But what choice is there? There’s plenty of water around us, and not enough beneath us.

Prisons are full. Now what?

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

When critical needs aren’t being met, solutions come as a result of two activities: making hard choices and thinking creatively. With prisons, Arkansas has reached the point where it needs to do both.

The state’s prison system is now so full that about 2,500 state convicts are being housed at county jails that were never built for that purpose. The state reimburses counties $28 a day per inmate, the same rate as in 2001, despite counties’ average cost rising to $49 a day. Adding insult to injury, the state doesn’t reimburse counties until the inmate is discharged from jail or moved to the penitentiary. As a result of all this, counties are owed $7.7 million.

County governments, needless to say, are not happy about this. Testifying before four legislative committees Tuesday, Jackson County Sheriff David Lucas, president of the Arkansas Sheriffs Association, said his jail is so full that he’s had to obtain a court order ensuring only violent offenders are locked up. Because of this, nonviolent offenders are no longer paying their fines, and why should they? They know there’s no room in the jail. County voters have approved a tax increase to enlarge the facility, but construction has not begun.

Aware that this can’t continue, the Department of Correction is requesting a new 1,000-bed prison costing in the neighborhood of $100 million. That’s about the same size as the income tax decrease Gov.-elect Asa Hutchinson pledged to enact during the campaign.

Sounds like it’s time for some of those hard choices mentioned in the first paragraph, doesn’t it? Should Arkansas build the prison and forego the tax cut? Should it do both, and cut somewhere else?

Another option – both a hard choice and the result of creative thinking – is to stop sending so many people to prison. Maybe there are better options for offenders who aren’t really threats to society. If the state stopped sending some of these struggling but save-able people to several years of “criminal school” in prison, maybe they wouldn’t become hardened criminals.

Here’s another case of creative thinking. Officials with LaSalle Corrections, a private prison provider based in Louisiana, told legislators Tuesday that they have room right now for 1,000 inmates near the Arkansas border. The cost would be about $28 a day – about what the state is paying as it underfunds counties. They can take them as fast as we can get them there.

It was a compelling case. The state Board of Corrections voted the next day to check into something like that.

Here’s the thing about using the private sector to perform traditional government operations: The private sector really is more efficient in many areas, but it tends to focus on picking low-hanging fruit and leaving the harder cases to the government. LaSalle Corrections does have medical staff at its facilities, but the $28 doesn’t cover big medical costs such as expensive drugs – and some inmates’ needs can be very expensive.

There’s also a philosophical question about the incentives created when imprisoning people becomes a commodity. What happens when corporations backed by lobbyists make more money by imprisoning more people as cheaply as possible? You might get more prisoners than you ought to have, and their needs might not be met – and yes, prisoners have needs. The officials with LaSalle seemed admirably sincere in their desire to help their inmates create better lives, but the state a few years ago tried using a private prison provider – Wackenhut Corrections Corp. – and it did not go well.

Is it worth a second try? It may have to be. Private prisons may be one necessary creative solution. But, as is usually the case when critical needs aren’t being met, hard choices still will have to be made.