LITTLE ROCK — State Rep. Clark Hall has illegally claimed two homestead tax credits since 2004 for properties that are in his wife’s name, the campaign of an opponent in the Democratic congressional primary said Monday.
Hall and Gary Latanich, a professor at Arkansas State University in Jonesboro, are two of the three Democrats vying for nomination in the 1st District congressional race. The other Democratic candidate, Scott Ellington of Jonesboro, is the prosecuting attorney for the 2nd Judicial District.
The seat is currently held by Rep. Rick Crawford, a Republican from Jonesboro.
Arkansas law allows a homeowner to claim a $350-a-year credit on his property tax for a “homestead,” which is defined as a taxpayer’s principal place of residence.
But Latanich alleged in a press release Monday that Hall is claiming the credit on two properties, one in Lonoke County and one in Phillips County.
Both of those are listed in assessors’ records as belonging to Hall’s wife, Rebecca Hall.
Hall’s campaign manager, Forest Boles, said that claiming the credit twice was “a mistake,” and that Hall was not aware of the situation until Monday.
“It’s an oversight that will be corrected soon,” he said.
Even if a husband and wife own two properties under different names, they can only claim the credit once, unless they can show proof that they do not live together, according to the Arkansas Assessment Coordination Department.
Arkansas Code Annotated 25-26-1119 states that if a county assessor determines that a property owner has claimed more than one credit in a year, “in addition to repayment of the homestead property tax credit, the designated preparer of the tax books shall extend a penalty of one hundred percent (100%) of the amount of the unlawfully claimed homestead property tax credit.”
Hall lives in Marvell. Assessors records show that a property at 302 Elm St. belongs to Rebecca G. Hall in Phillips County Assessor’s records.
An employee with the assessor’s office said the property has been listed as a homestead and claimed the credit since the tax credit became available in 2001.
Records of the Lonoke County assessor’s office show that Rebecca Hall also owns and claims as a homestead a property at 29 Sunset in Lonoke.
Therese O’Donnell, a deputy assessor in Lonoke County, said that Hall has claimed it as a homestead since purchasing the property in 2004.
Altogether, Hall claimed homestead credits worth $2,300 on the Lonoke property, not including the 2011 tax year, for which property-tax payments have not yet been made.
In a news release last week, Latanich accused Hall of using his position as a state representative to enrich himself, both by claiming reimbursements for services provided by companies he owns, and voting for increases in legislative pay.
Pete Grumbles, Latanich’s campaign manager, said Hall was a “terrible steward of taxpayer dollars and taxpayer trust.”
But Boles said that was a “gross mischaracterization” of Hall’s record in public office.
Lawmakers are paid a set salary but also are eligible for mileage, per-diem and various expense reimbursements. Almost all of the 100 members of the House and of the 35 in the Senate take such payments.
In 2011, Hall collected $45,010.76 in per diem, mileage and expense reimbursements from the House of Representatives, the Bureau of Legislative Research and the Division of Legislative Audit, according to their records. That’s less than what 19 other representatives collected that year.
Latanich pointed to contracts submitted to the House that show that in recent years Hall has had agreements with two companies.
Under the most recent contract, dated Jan. 1, Kimberly Hall LLC was to provide services for $1,500 a month. Before that agreements were with Russell Hall LLC, for $1,500 a month in 2011; Kimberly Hall LLC in 2009 for $1,350 a month; Kimberly Hall LLC for $1,200 a month in 2007; and Russell Hall LLC for $800 a month in 2007.
Hall said he owns both of those companies, which are named for his children. On his most recent Statement of Financial Interest form filed with the secretary of state’s office, he claimed to have earned more than $12,500 worth of income from each of them.
In its guidelines for legislative reimbursements, the House allows members to make agreements with regular businesses, employers or third parties to provide certain legislative services.
Under the guidelines, a member who is self-employed or a farmer can contract for services with his regular trade or business and reimburse that business for services provided.
“It reimbursed my expenses to work in the district which I represent: to go places, meet with people, attend functions, do what I need to do to provide services that my constituents want me to do,” he said. “I have a salary for doing the job, but I have reimbursements for my trips, expenses, going to the places they expect me to be at.”
Some lawmakers have service agreements with companies owned by family members, but critics of the practice have alleged that members who claim these reimbursements are skirting a constitutional prohibition on earning income other than their salaries for their services as lawmakers.
Some House members - including John Edwards, D-Little Rock, and Tim Summers, R-Bentonville - last year stopped accepting payments aimed at reimbursing their companies or their spouses’ companies for office expenses.
Hall said he did not stop accepting reimbursements to his own companies because he incurred lots of expenses while performing services for constituents. He noted that the practice is allowed under the law and said he played no role in determining whether that should be so.
“The reality is, if it’s right or wrong - you need to take that up with Speaker [Robert S.] Moore,” he said.
Grumbles said he knew the practice was “commonplace,” but said Hall’s reimbursement payments were part of a larger trend.
In his release last Tuesday, Latanich also cited Hall’s votes in 2007 and 2009 to increase pay for state representatives.
Information for this article was contributed by Michael R. Wickline of the Arkansas Democrat-Gazette.
Arkansas, Pages 7 on 03/27/2012