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).

Tax increase advocates continue to defend this economic record. They have built a road to poverty, not prosperity. It's time they were called on their record, and the Policy Foundation intends to.

The people of Arkansas, for decades, have been promised good-paying jobs and an income level (100 percent) equal to the U.S. But too many public officials have been long on rhetoric and short on details. The worst have eaten the seed, and enacted policies that have done real damage to the Arkansas economy. Arkansas, as a result, competes with Mississippi, not states in the region that have improved in income rank.

The long-suffering people of Arkansas deserve better. They deserve policies that create a vast, stable and prosperous middle class, not ideas that create more poverty. They deserve the opportunity to achieve the American dream through good-paying private sector jobs that provide upward mobility. Their children deserve the opportunity to learn in safe and functional educational environments. This generation and future generations deserve good government that is accountable to citizens and transparent.

Policy Victories

The Policy Foundation has a long-standing interest in expanding prosperity in Arkansas. Since our 1995 founding we have made fiscal and education reform recommendations including some later enacted by policymakers. We have also filed two amicus curiae briefs with the state Supreme Court in the Lake View school finance case, and have advanced our ideas by taking them directly to the people of Arkansas in the court of public opinion.

Some public officials have engaged in a sincere dialogue to enact policies that will expand prosperity in Arkansas. Thanks to their efforts, the following recommendations were enacted:

Reduction in the capital gains tax rate;

Performance-based budgeting, later discontinued;

Charter school expansion;

Administrative restructuring in more than 60 school districts;

A uniform, statewide K-12 system of accounting.

These policy victories occurred because policymakers kept an open mind when considering the hard work of more than 100 volunteers involved with the Policy Foundation, a nonprofit, nonpartisan organization.

Only a market-based system-and reasoned public policies-can birth the sustained prosperity capable of creating, and expanding, a vast, stable and prosperous Arkansas middle class. This roadmap to prosperity provides directions to encourage that process.