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Northwest Arkansas issues await tax, budget decisions

Governor to put priority on implementing tax cuts by Doug Thompson | January 15, 2015 at 1:00 a.m.

The governor's decision to seek approval of his tax cut plan at the legislative session's start has pushed regional issues to the back, Northwest Arkansas delegation members said Wednesday.

"Our big issues in the Northwest are workforce education, public-private partnerships to develop infrastructure, higher education and economic development incentives to keep us competitive with other states," said Mike Malone, executive director of the Northwest Arkansas Council. The council is a group of business and community leaders who cooperate on regional goals.

Such regional issues normally would be discussed for weeks or even months during a session. They would find their way into a state budget that reflects consensus and give-and-take with other regions' priorities, Northwest delegation members said.

Gov. Asa Hutchinson's decision to prioritize his tax cut plan, which he announced in detail Wednesday, moved budget decisions from the end of the legislative session to the forefront. Previous governors have proposed tax cuts, but held off until later in the session before seeking approval.

"It's very unusual and fraught with some risk," said Sen. Uvalde Lindsey, D-Fayetteville. Settling the budget first limits the options for the rest of the session, he said. The tax cut plan will determine how much money the state has to spend, which will largely shape the budget. In the past, legislators left themselves greater flexibility by leaving budget commitments and tax cuts to the end of a session, he said.

Senate Majority Leader Jim Hendren, R-Gravette, said setting budget priorities at the beginning was an advantage.

"You should decide what revenue you have to spend first, then how much of it you have to spend. That's the way I do it in my business," said Hendren, owner of a plastics company. The issue of which approach to the budget to take was settled in the election, he said. Hutchinson won by a large majority and fiscally conservative Republicans now have large majorities in both the state House and the Senate.

"Usually the taxpayers are the last to get a seat at the table," Hendren said. "It's refreshing to see them served first this time."

Sen. Bart Hester, R-Cave Springs, agreed with Hendren. "The governor ran on the issue of an income tax reduction for two years and 58 percent of the voters of Arkansas say they wanted that."

The governor's approach has a lot of support in the House, said House Majority Whip Rep. Jim Dotson, R-Bentonville. As whip, it is Dotson's responsibility to help line up support for the Republican caucus' priorities. The caucus and the governor are in agreement so far, he said.

"Judging by the reception he's getting and the electricity in the air, I'd say we're ready to get started," Dotson said.

Democrats are down to 36 votes in the 100-member House and 11 votes in the 35-member Senate. That makes them less eager to settle budget issues because budgets require three-quarters approval in each chamber, Lindsey said. Early approval of a budget would take much of the minority party's leverage away, he said. Benton and Washington counties have three Democrats out of a delegation of five senators and 14 House members.

The priority on passing the tax package and a budget has also brought out businesses and other entities who want the exemptions they seek included in a final tax plan, said Rep. Dan Douglas, R-Bentonville. Douglas is chairman of the House Agriculture, Forestry and Economic Development Committee.

"Of course, the 800-pound gorilla in the room is what's going to happen to the private option," Douglas said. The "private option" health care plan uses federal taxpayer dollars to help pay for private insurance for lower-income Arkansans. The measure passed in the last regular session, but required several votes before gaining the required three-quarters majority for a spending measure. Hutchinson has said he will make his recommendation on the private option on Jan. 22.

Without the private option, the state would not only stop providing the subsidies for insurance, but would not receive about $100 million a year for earlier programs, since federal money for those earlier programs is tied to accepting some form of health coverage expansion.

"It's almost like our breath is being held," said Rep. Jana Della Rosa, R-Rogers, a freshman member of the delegation. "We're going to pursue our priorities for the region, but we're going to see these big issues settled first. We don't mind that because we Republicans, and Republicans like tax cuts."

NW News on 01/15/2015

Print Headline: Regional issues hinge on budget

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