Arkansas Policy Foundation

A MIDDLE CLASS TAX CUT

Summary: Gov. Mike Beebe's proposed grocery tax cut would benefit more middle class Arkansans than a competing state earned income tax credit proposal.

ROAD MAP FOR ARKANSAS PROSPERITY
Policy Recommendations for the New Administration

(December 2006) Governor-Elect Mike Beebe inherits an Arkansas economy characterized, in the last 10 years, by an abysmal income rank and sub-par employment growth. Many public policies enacted in the last decade have not altered one sobering fact: Arkansas has ranked second or third worst in the nation in per capita personal income for nearly the entire postwar era (U.S. Bureau of Economic Analysis). In 2005, Arkansas ranked 48th, ahead of hurricane-ravaged Louisiana and Mississippi. Arkansas income actually fell as a percentage of the U.S. in the last decade. Job creation has also lagged since 1996. Arkansas employment grew at a 1.0 percent annual rate versus a 1.3 percent rate for the nation (U.S. Bureau of Labor Statistics).

FISCAL RECOMMENDATIONS

EDUCATION RECOMMENDATIONS

PRESIDENT BILL CLINTON ON CHARTER SCHOOLS

A Charter school is a K-12 public school created and operated by a group of teachers, parents, or other qualified individuals that is largely free from that regulation

Mr. Clinton championed charter schools during his two terms (1993-2001) in the White House. His presidential papers show he spoke in favor of charter schools on many occasions during his presidency

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ARKIDS FIRST "B" PROGRAM SPENDING EXCEEDS INFLATION, INCOME GROWTH

Second in a series of APF memos on the ARKids First program

(November 2006) The ARKids First "B" program promoted by Republican Gov. Mike Huckabee provides government health insurance to minors in families earning up to 200 percent of the federal poverty level. It is also draining down a record volume of tax dollars from the state budget, which is funded by taxpayers.

GAO: SPOT PRICES DETERMINE
GASOLINE PRICES AT THE PUMP

(October 2006) Gasoline prices at the pump have declined in recent weeks, reversing price increases earlier this year that led some Arkansas politicians to search for a scapegoat. They should review a report from the U.S. Government Accountability Office (GAO), which found "crude oil prices are the major determinant of gasoline prices."

DIVISION OVERSEEING ARKIDS FIRST
SPENDS MORE ON ADMINISTRATION THAN PROGRAMS

First in a series on the ARKids First program.

(September 2006) The Division of County Operations, which oversees the ARKids First program within the Arkansas Department of Health and Human Services, has spent more on administrative costs than on programs serving the needy, public records show.

ALTHEIMER RESTRUCTURED INTO DOLLARWAY

(July 2006) Administrators in the Altheimer School District will be restructured into the Dollarway district, the sixty-sixth restructuring to occur since the Murphy Commission, a Policy Foundation project, recommended eliminating K-12 administrators to save tax dollars in 1998.

ARKANSAS PER CAPITA INCOME GROWTH
ANEMIC SINCE 1971 INCOME TAX HIKE

(June 2006) Democratic Gov. Dale Bumpers and the General Assembly raised Arkansas' top income tax rate to "broaden the tax base" in 1971(1). Yet Arkansas' per capita income, expressed as a percentage of the U.S. total, has barely improved, moving from 71 (1971) to 77.7 percent (2005) over the 34-year period, according to data from the U.S. Bureau of Economic Analysis.

MEMO TO JODIE MAHONEY
Arkansas Government Employment Is Still Expanding

(May 2006) Nine years ago then state Sen. Jodie Mahoney, D-EI Dorado, challenged a finding by the Murphy Commission, a Policy Foundation project, that found total Arkansas government employment had expanded in recent decades. In a statement shortly before Christmas 1997, Mahoney challenged the Policy Foundation's use of part- and full-time government employees to calculate total Arkansas government employment. (Associated Press, Saturday Dec. 20, 1997, El Dorado News-Times).

(February 2006) The Policy Foundation issued grades to each Arkansas achool district based on data (ninth grade) from a national standardized test, the Iowa Test of Basic Skills. The grades were issued using a modified standard normal distribution, and a standard normal distribution versus the determined national mean. - Read More

(January 2006) Once upon a time many economists did not accept the idea that tax rates matter. Today, the opposite is true. Three sources of information widely recognized as credible among economists have devoted considerable attention to the idea. These sources are the Federal Reserve System; the National Bureau of Economic Research in Cambridge, Massachusetts; and research in leading peer-reviewed economic journals. Some economists still dispute the idea tax rates matter, but they no longer dominate the policy debate.