As a candidate for governor this time, Asa Hutchinson got asked in a debate to name the first thing he'd do in office if elected.
Celebrate--that might have been the most honest answer. Or maybe: "Heck, I don't know. Not much work ever gets done the first day."
But Asa came up with a perfectly appropriate response. It was that, on Day One, he would call five business executives and encourage them to create new jobs in the state via new locations or expansions.
So on Thursday, the third day of his governorship, Hutchinson came over during the lunch hour to the Marriott Hotel in downtown Little Rock to speak to the Arkansas Municipal League convention. He told the throng of city officials that he had deemed Wednesday to be his real first day at work, considering that Tuesday was all about formality and celebration. He said that, in keeping his promise, he had called five executives on Wednesday.
One of those executives, he said, laid out five conditions for expanding his operation in Arkansas. One of them, Hutchinson said, was revising the state tax code.
I would wager a substantial sum that the executive wanted reductions in business-operating taxes or personal ones that affect him and his stockholders, meaning those in the capital gains area or the high-income bracket.
But Hutchinson parlayed his anecdote into leaving the impression that the businessman had wanted the state to do what the governor's first piece of legislation will do. That is cut the personal income-tax rate for persons with incomes between $20,000 and $31,000 from 6 percent to 5 percent, and to cut the rate for persons with incomes between $31,000 and $70,000 from 7 percent to 6 percent.
I have spoken with chamber of commerce officials and economic developers, and I can assure you that none of them has ever said job-recruitment efforts hinge on the personal income-tax rates paid by people who might get jobs from a successful recruitment.
Instead, I'm told that these prospective new employers want to know what kinds of business subsidies are available to their companies, since other states are offering, and about the quality of highways and schools and life in general.
If the key to economic growth is simply low taxes, then let's do away with state taxes altogether and get richer in the Delta than Silicon Valley.
I was kidding. Stop saying amen.
What Hutchinson proposes will pass expeditiously, of course. It's hard to lose by cutting taxes. And it will mean little to nothing to the state's economic development efforts.
Instead it will provide a helpful few hundred dollars in the pockets of the working people. It will, in fact, make the state's antiquated income-tax structure fairer in having the top bracket apply at $75,000, which is still too low, rather than $35,000.
It can in fact be afforded if we experience good economic growth, find some way to keep the bad guys in jail without an expensive new prison (about which I'm dubious) and renew the private-option form of Medicaid expansion that saves the state millions in what it otherwise would pay in matching funds for basic Medicaid.
Now we're getting to the real purpose of this tax cut: feel-good ingratiation.
It is for political ingratiation with voters, who like getting a few hundred dollars. And it is for philosophical ingratiation with conservative legislators who want to brandish their conservative revolution and can think of no better way than cutting taxes at the outset ... and filing an anti-abortion bill or two.
Whatever works. We need these conservatives to be happy and sassy. Pretty soon, you see, we're going to need for them to turn counter-intuitive and vote to renew this private option.
Hutchinson went to Washington last week to try to find out how vigorously the state could tie the private option to work requirements--thus give it prettier conservative packaging.
Obviously he wants to propose renewing it.
So let our new right-wing rulers party their hearts out early by cutting taxes. It'll be a first step toward a win-win-win-win.
One--Conservatives can be conservative.
Two--More progressive people can embrace the touch of new fairness in tax rates.
Three--The state government can probably afford it with minimal pain, absent a little more parolee crime than we'd like. But we're used to that, at least here in Paroleville, also known as Little Rock.
Four--Everyone could hold hands on toward March and vote to keep this private option, which is a godsend for our health care, our economy and state government's budget.
Just know that whatever economic boon we'll see will come from the modest demand-side stimulus of a few more purchasing dollars in the pockets of working people--up to $500 or so for maybe a half-million taxpayers--and, much more significantly, the public health-care spending of the private option.
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John Brummett's column appears regularly in the Arkansas Democrat-Gazette. Email him at jbrummett@arkansasonline.com. Read his blog at brummett.arkansasonline.com, or his @johnbrummett Twitter feed.
Editorial on 01/18/2015