Most Arkansans pay their state taxes on time but others, including some officials, have contributed to an accounts receivable backlog that experts say totals nearly $300 million. Transparency tools allow citizens to learn if officials are delinquent and their taxpayer-funded salaries.
Tax "assessment and collection processes have resulted in [a] significant backlog of taxes for the state," states a 2016 report from PricewaterhouseCoopers LLC, an international management consulting firm. The firm reported "$321 million has been deemed collectable by the state," though a 2017 state Department of Finance and Administration report estimated the amount was $304 million.
These outstanding receivables are not on appeal "under protest," a separate category that totaled $17 million, PricewaterhouseCoopers reported.
Rather, they are instances of non-payment of taxes. PricewaterhouseCoopers observed Arkansas' "tax burden is not being shared by all citizens, and those who are compliant taxpayers are suffering from a lack of service, as a result of lagged collection and payment activities."
To its credit, the Department of Finance and Administration launched an after-hours program that reduced receivables by $22.1 million through November. That leaves more than a quarter-billion dollars in collectable receivables, according to these reports. Other categories include "estimated assessments issued because taxpayer failed to file tax return," "not currently ready for collection activities," and "uncollectable."
The department takes multiple steps to collect receivables. These include a "Notice of Proposed Assessment" issued along with the Taxpayer Bill of Rights. "The taxpayer has 60 days to protest the assessment," another agency communication states. A "final notice is issued 45 days later," with a notification that "a lien will be filed for the unpaid tax." The liens are for any debt currently due the state for taxes, and are "filed with the appropriate county clerk's office."
A 2012 Arkansas Democrat-Gazette article described a lien as "a legal claim or hold on a piece of property as security for the payment of a debt. It has the same force as a judgment issued by a circuit court."
Records obtained in 2015 by the author under the Freedom of Information Act show the Department of Finance and Administration filed 70,525 liens in 2012-14.
Public records, some online in this digital age, show tax liens. Public salaries and other spending are also available online to citizens.
One example is OpenTheBooks.com, an Illinois nonprofit that promotes transparency in government at all levels. The group's mission is to report the following information to taxpayers: "Every Dime. Online. In Real Time." The group has captured nearly four billion public expenditures as part of "the world's largest private database of government spending." The database is available free of charge to citizens and other stakeholders.
OpenTheBooks.com also reports all Arkansas government employee salaries and checkbook spending including payments to vendors.
Public service is a privilege. Citizen-led efforts to increase efficiency and transparency can address Arkansas' receivables problem.
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Greg Kaza is executive director of the Arkansas Policy Foundation, a nonprofit think tank founded in 1995 in Little Rock. Arkansas Policy Foundation contracted PricewaterhouseCoopers to work with the Department of Finance and Administration on an efficiency project.
Editorial on 03/31/2018