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."

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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.

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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.

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ARKANSAS PER CAPITA INCOME GROWTH ANEMIC SINCE 1971 INCOME TAX HIKE

Democratic Gov. Dale Bumpers and the General Assembly raised Arkansas' top income tax rate to "broaden the tax base" in 1971. 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. Arkansans would have to wait until the final decade of the 21st Century (2090-2100) to enjoy per capita income on a par with the U.S. average if growth continues at its current anemic rate.

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RESTRUCTURING TO OCCUR IN LOCKESBURG SCHOOL DISTRICT; ALTHEIMER COULD FOLLOW

(June 2006) Administrators in the Lockesburg School District in Sevier County will be restructured into the DeQueen district, a recommendation first advanced in 1998 by the Murphy Commission, a Policy Foundation project, as part of a proposal to save tax dollars by eliminating K-12 administrators.

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POLICE OFFICER TO ADDRESS POLICY FOUNDATION LUNCHEON

(February 2006) Sgt. Terry Hastings, a 30-year veteran of the Little Rock Police Department, will discuss crime in Little Rock at a Feb. 22 Policy Foundation luncheon.

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UALR LAW PROFESSOR TO SPEAK ON FREEDOM OF INFORMATION ACT AT DEC. 15 LUNCHEON

(December 2005) Richard J. Peltz, Associate Professor of Law at the Univ. of Arkansas at Little Rock Bowen Law School, will discuss ideas for expanding the public's right to know at a Dec. 15 Policy Foundation luncheon in Little Rock. Professor Peltz is an advisor to the Arkansas Press Association. The luncheon will start at 11:45 a.m. at the Cheers on Broadway restaurant in the Lyon Building, adjacent to the Metropolitan Bank Tower (Capitol and Broadway).

Peltz earned his law degree from Duke University, and is co-author of the treatise, The Arkansas Freedom of Information Act.

Admission to the Dec. 15 luncheon is free, but attendees are responsible for the cost of their meal. Please RSVP prior to Dec. 13 so the Policy Foundation can arrange parking validation for its guests in the structure beneath the Bank Tower.

IOWA TEST OF BASIC SKILL SCORES

(December 2005) Twenty Arkansas school districts receive ‘A’ grades in a forthcoming Policy Foundation study based on the 2004 Iowa Test of Basic Skill Scores (verbal skills and mathematics).

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"The General Assembly should enact legislation which re-structures, effective school year 1999-2000, Arkansas' existing 311 school districts into not more than 134 "administrative units" where an administrative unit is defined as "one superintendent and an associated superintendent's staff." (Murphy Commission, "Streamlining and Cost-Saving Opportunities in Arkansas' K-12 Public Education System," September 1998)

UCA PROFESSOR TO SPEAK ON EMINENT DOMAIN AND PROPERTY RIGHTS AT POLICY FOUNDATION LUNCHEON

(October 2005) Univ. of Central Arkansas Business Law Professor Roy Whitehead, Jr., author of a recent journal article on eminent domain and property rights, will discuss the issue at a Nov. 3 Policy Foundation luncheon in Little Rock. The luncheon will start at 11:45 a.m. at the Cheers on Broadway restaurant in the Lyon Building, adjacent to the Metropolitan Bank Tower (Capitol and Brodway), north of the Interstate-630 exit.

ARKANSAS K-12 SCHOOL DISTRICTS NEED FEWER ADMINISTRATORS
“The General Assembly should enact legislation which re-structures, effective school year 1999-2000, Arkansas' existing 311 school districts into not more than 134 "administrative units" where an administrative unit is defined as "one superintendent and an associated superintendent's staff.”(Murphy Commission, “Streamlining and Cost-Saving Opportunities in Arkansas’K-12 Public Education System,”September 1998)

(October 2005) An old adage cautions, ‘Be careful what you ask for.’ Some Arkansas school superintendents may end up wishing they had not challenged the General Assembly’s action on K-12 public education in the 2005 regular session. Several legislators, following this month’s report from Special Masters Bradley Jesson and David Newbern, suggested that a measure to make superintendents state employees.is overdue.

ARKANSAS K-12 UNIFORM ACCOUNTING SYSTEM NEEDS IMPROVEMENT
The Department of Education should implement the statewide use of a finance analysis model add-on on a "phase in" basis.”(Murphy Commission recommendation, “Streamlining and Cost-Saving Opportunities in Arkansas’K-12 Public Education System,”September 1998)

(October 2005) Special Masters Bradley D. Jesson and David Newbern, in their report to the Arkansas Supreme Court released earlier this week, note the state “argued a lack of data”in the Lake View school finance case. The state’s uniform accounting system, which allows citizens to analyze categorical expenditures by district within the K-12 system, is a vast improvement over the information available seven years ago when the Murphy Commission recommended transparency. The case’s long history, however, underscores the need for improvements to the system.

REORGANIZE THE PARKIN SCHOOL DISTRICT
The Murphy Commission recommended administrative restructuring of the Parkin School District in 1998. It’s time to enact that recommendation.

(September 2005) The Murphy Commission, a Policy Foundation project, recommended the administrative restructuring of Arkansas’311 K-12 districts in 1998 “into not more than 134 administrative units,”defined as “one superintendent and an associated superintendent’s staff.”The recommendation, ignored at the time, was partially implemented in 2004 when 59 districts the Policy Foundation had identified were finally reorganized under PA 60.

THE POLICY FOUNDATION WELCOMES DR. JAY GREENE TO ARKANSAS
(August 2005) The Policy Foundation welcomes Dr. Jay P. Greene to his new position as head of the Department of Education Reform at the Univ. of Arkansas in Fayetteville. Dr. Greene earned his doctorate at Harvard University in Cambridge, Massachusetts, and was a senior fellow with the Manhattan Institute for Policy Research prior to his appointment.

ARKANSAS STILL RANKS 49TH DESPITE TAX INCREASES LINKED TO INCOME GROWTH
(August 2005) Arkansas ranks 49th in per capita personal income according to 2004 preliminary data released by the U.S. Bureau of Economic Analysis (BEA). Arkansas has not improved its second-to-last place rank, ahead of only Mississippi, despite record tax increases linked by proponents to income and economic growth.

NEW TRANSPARENCY TOOL FOR PARENTS
(April 2005) The Murphy Commission, a Policy Foundation project, recommended increased transparency in 1998 after concluding a multi-year study of Arkansas’ K-12 public school system. Transparency describes the process of making information about government available to citizens in easily accessible formats. One panel recommendation meant to advance transparency proposed a financial analysis model that reported expenditures.1 Transparency leads to accountability, i.e., rewards and penalties based on school performance.

‘FISCALLY DISTRESSED’ DESIGNATION COULD LEAD TO MORE ADMINISTRATIVE RESTRUCTURING
(March 15, 2005) Nine Arkansas K-12 school districts that the Policy Foundation (APF) recommended for administrative restructuring in 1998 have been designated as “fiscally distressed” by the state Department of Education. The nine districts are Altheimer Unified, Dierks, Dollarway, Eudora, Flippin, Lead Hill, Midland, Waldo and Western Yell County

RACE TO THE BOTTOM, PART TWO(1)
(March 2005) Arkansas advocates of increased spending for K-12 public education claimed in 1983 that tax increases would lead to income growth. In 1983, Arkansas ranked 49th in the U.S. in per capita personal income(2).

SPEAK UP, ARKANSAS! ON TAXES (NOV. 4)
(Oct. 29, 2004) The Policy Foundation will participate in a live call-in program, Speak Up, Arkansas! On Taxes, that will air on the Arkansas Educational Television Network (AETN). The program will air Thursday, Nov. 4, from 8 p.m. to 10 p.m., and viewer participation is encouraged.

THE DAWN OF ADMINISTRATIVE RESTRUCTURING
Arkansas' existing 311 school districts should be restructured into not more than 134 "administrative units", where an administrative unit is defined as "one superintendent and an associated superintendent's staff. (Murphy Commission, ‘Streamlining and Cost-Saving Opportunities in Arkansas’ K-12 Public Education System’ (1998)

ARKANSAS SUPREME COURT ENDS LAKE VIEW JURISDICTION
“APF would also commend the Supreme Court in its careful respect for the separation of powers doctrine, in looking to the Legislature to make the curative enactments necessary to bring the school system into constitutional compliance.” (Arkansas Policy Foundation, amicus curiae brief, Lake View School District No. 25 v Mike Huckabee)

THE LAKE VIEW SPECIAL MASTERS ON ACCOUNTABILITY
“APF concedes PA 35 (the Arkansas Student Assessment and Educational Accountability Act of 2004) provides for accountability and testing measures. Our objection is that the effective date of the testing system does not occur in all areas prior to the 2009-10 school year. These tests are readily available now. APF would ask: Why should the State wait until 2009 since testing is a key element of the entire program?” (Amicus Curie Brief of Arkansas Policy Foundation, Lake View School District No. 25 v. Mike Huckabee, Governor of the State of Arkansas, et al.)

TRANSPARENCY & TAXES
Five years ago the Policy Foundation, a nonpartisan, nonprofit economic research organization, proposed standardized accounting for Arkansas’ K-12 public school system.1 The proposal followed interviews with school board members who told our researchers: “Because of our accounting system, our district is data rich, but information poor … We cannot manage successfully what we cannot measure.” We noted that accounting can provide important data on spending in areas such as administration, classroom instruction and maintenance.

RAZORBACK PRODUCTION ZONES
Little Rock (Dec. 22) A state fiscal structure that features lower overall tax rates is preferable to Arkansas' system, which is riddled with special exemptions. In 1998, the Policy Foundation recommended creation and empowerment of a "sales tax exemption and exclusion taskforce" to eliminate exemptions. The recommendation was part of a proposal to create a fiscal structure with lower rates on capital investment.

RACE TO THE BOTTOM
(Nov 18, 2003) Arkansas still ranks 49th in per capita personal income two decades after officials linked a sales tax increase for K-12 public education to economic and income growth. Between 1983 and 2002, West Virginia (48th), Arkansas (49th) and Mississippi (50th) did not improve in rank while other states in the 12-state Southeast region jumped in rank.

TAX RATES AND JOBS CREATION
Arkansas advocates of raising taxes claim tax rates are not a key factor considered by businesses and entrepreneurs that create jobs, hire workers and provide incomes. Even a cursory review of U.S. Securities and Exchange Commission

CONVERGENCE
Arkansas total government employment, at some point this decade, will surpass the number of workers in the Manufacturing private industry sector, a first in the state once known as the Land of Opportunity. Government has not surpassed Manufacturing in employment since economists first started collecting data seven decades ago in the 1930s.

THOU SHALT NOT COVET
Arkansas advocates of raising taxes were dealt a decisive defeat last Tuesday when Alabama voters rejected a proposed $1.2 billion tax increase, the largest in the state’s history. Arkansas advocates want to raise our taxes, and hoped Alabama voters would give them momentum.

LOSING THE GAME
Arkansans would rightfully question the judgment of a football coach who opted to kick into the wind after winning the coin toss. Or grounding the team’s All-American passing quarterback in favor of running the ball against the state’s best ground defense. Common sense suggests the coach making these questionable decisions is likely to lose the game.

YEAR TWO: MORE DOUBLE-DIGIT INCREASES ON NATIONAL NORM-REFERENCED TESTS AT MAUMELLE CHARTER SCHOOL
Arkansas' charter school movement faces significant obstacles, including restrictions on the number of schools, restrictive chartering authority and onerous rules and regulations that do not exist in other states

NBER DECLARES END TO U.S. RECESSION
(July 17, 2003) The National Bureau of Economic Research (NBER), the official arbiter of cyclical turning points in the U.S. economy, declared today the recession ended nearly two years ago (20 months) in November 2001. The finding concludes debate about whether the economy was experiencing a so-called "double-dip recession." The Policy Foundation declared in March 2002¹ the recession ended in January 2002 based on various government data series.

PRESIDENT BUSH'S 'NEW EUROPE' AND ARKANSAS
(Nowa Huta, Poland) Critics consistently underestimated Republican President Ronald Reagan, and underestimate George W. Bush today. In their repeated attempts to marginalize conservatives these critics are confronted with the collapse of socialism in the former Soviet bloc--one of Mr. Reagan's greatest triumphs--and the emergence, a decade later, of Mr. Bush's 'New Europe,' a trade bloc with important ties to Arkansas.

ARKANSAS' 3RD LARGEST TRADING PARTNER
(Berlin, Germany) The 15-nation European Union (EU), measured as a trade bloc, is Arkansas' third largest trading partner, importing $367 million in goods in 2002 (1). Themes at an international trade and monetary policy conference underway here are the need for further economic integration and high standards in educating the global economy's next generation of workers.

TRADE BENEFITS ARKANSAS
The economics profession is sometimes held up to ridicule or satirized because some of its practitioners have fooled themselves into believing they are scientists. One example is Arkansas' ongoing fiscal crisis, now in its third year, which has led to five downward revisions in state revenue forecasts. Huckabee administration officials have blamed entrepreneurs and corporations, creating scapegoats when a reappraisal of their false faith in "economics as science" is warranted. Entrepreneurs--not government economists who claim to use "scientific methods"--are the real forecasters in a market-based economic system. These job creators will continue to seek opportunity, and avoid calamity.

INDEPENDENT AUDITS WOULD SAVE TAX DOLLARS
Little Rock-The 84th session of the Arkansas legislature is ending with a whimper, not a bang. Legislators are preparing to leave Little Rock without resolving key fiscal issues. Other matters like school finance are being postponed until fall. State government reorganization, once considered likely to win legislative approval, could be dead. The state Senate passed a reorganization plan in February1 but the House decided to appropriate $400,000 in tax dollars to "study the issue"--five years after the Policy Foundation made extensive recommendations that would have saved millions.

ADMINISTRATIVE RESTRUCTURING: RURAL DISTRICTS CAN KEEP THEIR MASCOTS AND TEAMS
Critics of Gov. Mike Huckabee's K-12 school consolidation proposal contend it would lead to the loss of sports teams, mascots and local identity in rural Arkansas. The governor proposed consolidation in his Jan. 14 State of the State address to the Arkansas legislature, which is likely to consider the issue later in 2003, perhaps in a special session.

ADMINISTRATIVE RESTRUCTURING OF DISTRICTS
A 1998 Policy Foundation report found administrative restructuring of Arkansas K-12 school districts could exceed $174 million over a 10-year period.

MEASURING HIGH-TECHNOLOGY EMPLOYMENT IN ARKANSAS
A group of entrepreneurs, government officials and academics is working to increase the perception that Arkansas' economy includes a high-technology "knowledge-based" private industry sector. One simple way to document any such trend is to have the Arkansas Department of Employment Security (ADES) include high-technology industries in its monthly establishment survey of non-farm payroll employment.

ARE MORE TAXDOLLARS THE ANSWER?
Students in Arkansas school districts that spend the most per pupil score above the state average on standardized tests less than one-third of the time (1999-2002). But performance in two districts (Ozark in Johnson County and Alread in Van Buren County) was exceptional. Are the methods these districts use of greater importance than more taxdollars?

PER CAPITA PERSONAL INCOME, U.S. RANKING BY SOUTHEAST STATE
Arkansas proponents of increased spending for K-12 public education, in 1971 and 1991, claimed tax increases would lead to income growth. In 1971, Arkansas ranked 49th in the U.S. in per capita personal income. Today, Arkansas barely ranks 48th.

STATES WITH NO INCOME TAX CREATED PRIVATE SECTOR JOBS AT GREATER RATE IN THE 1991-2001 EXPANSION
Little Rock--States with no income tax created new private sector jobs at a greater rate than the U.S. in the record 10-year economic expansion (March 1991-March 2001) (1), according to a Policy Foundation analysis of employment data compiled by the U.S. Bureau of Labor Statistics.

AN INTRODUCTORY SURVEY OF JOURNAL ARTICLES ON THE ISSUE OF TAX RATES
Critics of the idea that tax rates are a factor affecting economic development frequently allege there is little or no supporting research for such a claim.

ARKANSAS' HIGH TAX RATES ON CAPITAL INVESTMENT
(April 29)--The Policy Foundation believes Arkansas would benefit from comprehensive, pro-growth tax reform. We base this statement on our belief that Arkansans are not under-taxed and taxes and rates do matter to entrepreneurs. They should be lowered to attract capital investment.

THE FLUOR GLS STUDY AND ARKANSAS' HUNT FOR A MANUFACTURING SUPERPROJECT
Me dia reports that German automaker Daimler-Chrysler is considering three southern states (Georgia, Florida and North Carolina), not Arkansas, for a new manufacturing superproject underscore the weaknesses of the state's existing tax structure on capital investment.

Little Rock - (April 4, 2002) Northwest Arkansas is the economic engine driving the state’s economy.

POLICY FOUNDATION FILES AMICUS BRIEF IN LAKEVIEW CASE
The Arkansas Policy Foundation filed an amicus brief with the state Supreme Court on Jan. 31 in the pending Lake View school finance case.

LRSD MANAGEMENT CONSULTANTS RECOMMENDED ACCOUNTING SYSTEM IN 1999
Management consultants to the Little Rock School District recommended using an activity-based accounting system nearly three years ago in March 1999

INDUSTRIAL PRODUCTION EXPANDS
Policy Foundation Sees Recession End In January 2002
Numerous Arkansas Policy Foundation research memos have noted the importance of industrial production data maintained by the Federal Reserve System.

2002 ECONOMIC FORECAST
Recession To Recovery
The yield curve is showing the most positive indication of recovery. Employment data has been positive of late, and will provide more evidence of recovery if the four-week moving average continues to fall. Conclusive evidence the recession has ended will occur when industrial production, which has contracted 15 of the last 16 months, expands again. This data is released mid-month for the preceding month.

ROLLING DEFLATION
The Arkansas Policy Foundation does not see the widely followed Consumer Price Index (CPI) turning negative in 2002 but "rolling deflation" in the Producer Price Index (PPI) bears watching. The PPI has been negative three of the last five years, a rare occurrence in the postwar era. Lack of pricing power is apparent in Arkansas' manufacturing and agricultural sectors, and has led to forced consolidation or capital flight due to high state tax rates.

THIS WEEK'S EMPLOYMENT DATA
This week's national employment data offers further proof of the positive trend noted in APF's 2002 economic forecast.

TODAY’S INDUSTRIAL PRODUCTION DATA
The most frequent economic questions asked of the Policy Foundation are, 'When will the recession end?' and 'What evidence is there that this recession continues?'

SPECIAL REPORT FROM THE WHITE HOUSE THE BUSH FISCAL STIMULUS PLAN
WASHINGTON, D.C.—Supporters of President George W. Bush’s fiscal stimulus plan have drawn comparisons to a fiscal plan advanced by Democrat John F. Kennedy nearly 40 years ago. They overlook one important difference: a Democratic Congress approved the Kennedy plan in 1964 while the U.S. economy was expanding.

INTROSPECTION AT THE FED
The Federal Reserve, at least twice in its 78-year history, has committed monumental policy errors that appeared initially to policymakers as puzzles. The first was the Great Depression of the 1930s; the second was the 'stagflation' (double-digit inflation and unemployment) of the late 1970s.

NBER DECLARES U.S. RECESSION
The National Bureau of Economic Research declared Nov. 26 the U.S. economy officially entered recession eight months ago in March 2001.

The NBER is a private, nonprofit economic research organization based in Cambridge, Mass. Six academic economists serve on the NBER Business Cycle Dating Committee, which serves as the final arbiter ("umpire" or "referee" if you are a sports fan) of when recessions begin and end.

DOING BETTER NEXT TIME
Gov. Mike Huckabee is correct that tax increases are not the proper response to Arkansas' unfolding fiscal crisis (Democrat-Gazette, Nov. 15). Yet the executive branch continues to ignore forecasting tools that would make Arkansas a leader among states in the region when analyzing economic conditions.

THE HIGHEST INCOME TAX RATES IN THE SOUTH
Arkansas would have the highest income tax rates in the South if either of two scenarios examined by the Bureau of Legislative Research to fund K-12 public education were approved by the Assembly and Gov. Mike Huckabee.

POLICY FOUNDATION ACTS IN LAKE VIEW CASE
The Arkansas Policy Foundation today announced its intention to seek the State Supreme Court’s permission to file an amicus curiae brief in the pending case, Lake View School District No. 25 v Huckabee et al. Amicus curiae is a Latin term meaning “friend of the court.” It is the name for a brief filed with the Court by someone who is not a party to the case.

ECONOMIC RECOVERY, LIKE RECESSION, IS INEVITABLE
The U.S. economy, even before the recent terrorist attacks, was exhibiting signs of serious weakness.

JUDGE KILGORE'S RULING & THE MURPHY COMMISSION
Does a legal ruling by Pulaski County Chancery Court Judge Collins Kilgore mandate tax increases to fund Arkansas public education as some media observers suggest? Or was Judge Kilgore's ruling the latest finding that Arkansas public schools would benefit from better accounting methods?

THOUGHTS ON DEFLATION
Arkansas Democrat-Gazette, Aug. 11, 2001,  By: Greg Kaza
Federal Reserve Chairman Alan Greenspan referred recently to a topic rarely discussed anymore in Arkansas: asset-price deflation. His remarks, touching on the business cycle, are worthy of serious reflection.