Column: Don’t put too much faith in Revenue Stabilization

My column this week is about my increasing concerns that Arkansas is going to go the way of the federal government and other states and make running deficits a habit.

We’ve heard a lot about the state’s “balanced budget” in the past couple of years, but the truth is that Arkansas is in debt $330 million to the federal government for money paid out in unemployment benefits.

Now some legislators seem heck-bent on cutting taxes before really cutting spending, and, of course, they’ll get around to paying the debt later. Sounds like Washington, D.C.

A recurring rationale from the cut-taxes-first crowd is that doing so will result in state government cutting spending because the Revenue Stabilization Act will force it to do so.

But the Revenue Stabilization Act hasn’t resulted in balanced budgets lately, has it?

Here’s the column.

To cut spending, you cut spending

Sen. Gilbert Baker (R-Conway) appeared on KARN’s “Dave Elswick Show” yesterday in the wake of the House Revenue and Taxation Committee tabling his proposal to cut the used car sales tax. He’s frustrated, so we should all cut him some slack, but he made this comment:

“I do support cutting the spending of this state and there is only one way you do it. You don’t talk about it. You don’t sponsor it away. You cut taxes.”

With all due respect, there is only one way to cut spending – by cutting spending. And then you cut taxes. In that order. Otherwise, Arkansas goes the way of Washington, D.C.

Jason Tolbert has a lot more.

Column: In defense of payday lenders

My Arkansas News Bureau column this week is about two bills before the state Legislature that would open the door to the return of small loan providers – payday lenders, basically.

The lenders, which provide small, short term loans mostly to poor people, shut down and left the state after Attorney General Dustin McDaniel threatened to sue them in 2008. They couldn’t justify their expenses and risks charging what the state would allow.

Everyone celebrated their departure as if they had done some noble deed – and then did nothing about the underlying problem, which is that poor people sometimes need $300 by Friday or their lights will be shut off.

Banks don’t loan that kind of money to anybody. Banks don’t loan money to poor people. But nobody proposed doing anything about that. And lest you think there are churches and agencies out there ready to help – there aren’t, at least not nearly enough of them.

So basically we left poor people with one less option to keep their lights on until a paycheck comes in or until they can figure out what to do. In fact, it was the best option. Now all they can do is go to a pawn shop, beg or steal.

Poor people sometimes need $300 to keep the lights on, and there’s no one out there willing to loan it to them. For those who oppose these bills – and, of course, that includes McDaniel – I have one question: What is your solution to the real problem?

What is your solution?

Here is the column.

What I was talking about

My Arkansas News Bureau column this week took state legislators to task for cutting taxes without first cutting spending. My point: With the state already owing the federal government $330 million for unemployment benefits, the responsible path would be to cut spending, pay down the state debt, and then cut taxes – in that order. You never know when unexpected expenses may occur.

Such as the $23.5 million legislators learned about yesterday that the state will have to pay in state employee salaries because the calendar squeezes in an extra pay period this year. It happens every 10 years, and of course, the calendar we use today was invented more than 400 years ago, so this shouldn’t have come as a surprise.

But it did, which is why responsible adults leave extra leeway when they think about reducing their revenues.

Read more about the $23.5 million shortfall here.

And if you’re interested, here is my column from Wednesday.

Column: Washington DOES come to Little Rock

My column this week is about the state Legislature’s zeal for cutting taxes coupled with its seeming disinterest in cutting spending. It seems that Washington-style fiscal irresponsibility is making its way to Little Rock.

I submitted the column on deadline Monday morning after the House passed three tax cuts last week. Then yesterday the Senate passed three cuts of its own. By contrast, the biggest spending cut being discussed so far this session is Gov. Beebe’s proposed reforms of the state prison system, but those savings are long-term. In fact, in the short term, Beebe’s reforms will actually cost more money.

Still looming is Arkansas’ $330 million debt to the federal government for unemployment benefits.

Are the legislators all crazy, or is it just me? Seems like the most responsible path would be to cut spending first – and I mean really cut it – pay down Arkansas’ state debt, and then cut taxes.

Here’s the column.