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OPINION | JOHN BRUMMETT: Surplus of ideas

by John Brummett | June 15, 2022 at 3:46 a.m.


Last week's column on the questionable idea to use one-time state surplus money to begin a presumably ongoing upgrade of Arkansas teacher salaries engendered pushback both resentful and substantive.

Let's dispense first with the tired former.

There was the clichéd crankiness about teachers deserving no raise because they work only nine months a year and get sweet retirement for glorified baby-sitting. That's anti-education meanness and claptrap.

There was the fellow in Springdale who wrote to say schools are a local responsibility and everyone ought to do as the good folks of his booming town had done by voting local taxes on themselves for better teacher pay.

Indeed, boomtowns are swell. But the state Constitution says education is a state responsibility and the state Supreme Court has made that clearer.

It is an inconvenience, I understand, to be blessed in your rich town but burdened by state association with poor towns. You could always use your money for an initiative for a state constitutional amendment removing the words that make equitable education the responsibility of the state. You could make education a matter of local autonomy. Then you wouldn't have to worry about culturally disadvantaged children who erred by being birthed elsewhere.

Now, to the higher-quality pushback: I've been challenged on my concern about using one-time surplus cash for teacher raises passed along to future budget years. The counterpoint is that the accelerated income-tax rate reduction that the Legislature intends to approve in special session this summer amounts to the same use of one-time money for ongoing obligations.

For that matter, some legislators arguing against one-time money for teacher raises want to use the surplus to adopt federal depreciation schedules to help Arkansas small businesses and farmers imperiled by inflation's higher wages and prices.

I'm asked: Isn't it a choice as to what to use one-time money for? The answer is yes.

We need to review how we got here.

Mainly, it's that we have produced this massive surplus because the federal government sent us borrowed money to bail us out during the virus-slowed economy. Then we made tight budgets out of concern for the uncertainties of the economy as we came out of the virus. Then the post-virus economy exploded. Then all that got amplified by inflation, by higher wages producing more state withholding and higher tax collections on what those higher wages were buying.

So we're looking at a record $1.47 billion of "unencumbered revenue" on June 30 when the state fiscal year ends.

Traditionally, the conservative budgeting prudence of Arkansas was to use one-time overages for one-time capital improvements. It's how we built our buildings, paid bonuses and set aside emergency assistance funds.

This time, Gov. Asa Hutchinson asserted that gasoline prices had gone so high, and worked such a hardship of the pickup-motoring work culture of our rural state, that he wanted to tap some of the big surplus to send people relief. He floated the ideas from other states to suspend state gasoline taxes for a while or send relief checks to all taxpayers.

Legislators objected. They said other states' experiences showed that gasoline tax suspensions had been swallowed up rapidly by rising prices. They said the state lacked the tracking ability to get relief checks to the right people in an efficient way.

Always in love with cutting income taxes, Republican legislators proposed instead that we simply accelerate the schedule of income-tax rate reductions already approved. Hutchinson looked at $1.47 billion and said all right.

Then legislators suggested the depreciation tax cuts for small business. Then Hutchinson got the idea to upgrade teaching in Arkansas.

Then, after Uvalde, Hutchinson proposed spending $50 million on capital costs of making schools more secure against mass shootings. That's a traditional kind of use.

So, yes, it's a choice. Doing one of these untraditional things is risky. Doing two at once is faulty. Doing all three would be malfeasance.

So we ought to rank them. I'd go with teacher salaries. But there is no way Republican legislators will go for that over broad income-tax relief.

It's pretty clear tax reduction will be the top priority. Depreciation ought to be three. Teacher salaries will sustain the squeeze in the middle.

What I know for sure is that we should not dare do all three and then turn the state budget over to Sarah Sanders and her promise to "phase out," not "down," the income tax.

That's a good way to get yourself in a serious tight.

John Brummett, whose column appears regularly in the Arkansas Democrat-Gazette, is a member of the Arkansas Writers' Hall of Fame. Email him at jbrummett@arkansasonline.com. Read his @johnbrummett Twitter feed.



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