JOHN BRUMETT: Surplus of ideas
Last week’s column about the dubious idea of using the state’s one-time surplus money to begin a likely ongoing improvement in Arkansas teacher salaries has spawned a pushback that is both resentful and substantial. .
Let us first dispense with the tired old one.
There was the cliched grumpiness that teachers didn’t deserve a raise because they only worked nine months a year and enjoyed a sweet retirement for glorified babysitting. This is meanness and anti-education spiel.
There was the guy from Springdale who wrote to say that schools are a local responsibility and everyone should do like the good people of his boom town by voting local taxes on themselves for better pay for teachers.
Indeed, boomtowns are in vogue. But the state constitution says education is a state responsibility and the state supreme court has made that clear.
It’s a disadvantage, I understand, to be blessed in your rich town but burdened by the state’s association with poor towns. You can still use your money for a state constitutional amendment initiative removing the words that make equitable education a state responsibility. You could make education a matter of local autonomy. So, you would no longer have to worry about culturally disadvantaged children being mistakenly born somewhere else.
Now on to the higher quality pushback: I was challenged to use a one-time cash surplus for teacher increases passed on to future budget years. The counterpoint is that the accelerated reduction in the income tax rate that the Legislature intends to approve in special session this summer amounts to the same use of one-time money for outstanding obligations.
In fact, some lawmakers who oppose one-time money for teacher raises want to use the surplus to pass federal amortization schedules to help small businesses and farmers in Arkansas threatened by rising tuition. wages and inflation prices.
I am asked: is it not a choice as to the use of the single money? The answer is yes.
We need to review how we got here.
It is mainly because we produced this massive surplus because the federal government sent us borrowed money to bail us out during the downturn in the economy due to the virus. Then we made tight budgets out of concern for the uncertainties of the economy as it emerged from the virus. Then the post-virus economy exploded. Then all of this was amplified by inflation, by higher wages producing more state payroll deductions and higher tax collections on what those higher wages were buying.
So we’re looking at a record $1.47 billion in “unencumbered revenue” on June 30, the end of the state’s fiscal year.
Traditionally, conservative fiscal prudence in Arkansas has been to use one-time surpluses for one-time capital improvements. That’s how we built our buildings, paid out bonuses, and built up emergency relief funds.
This time, Governor Asa Hutchinson claimed gas prices were so high and had hurt our rural state’s pickup truck work culture so badly that he wanted to tap into some of the big surplus to send relief to people. He pitched the ideas of other states to suspend state gasoline taxes for a while or send relief checks to all taxpayers.
Lawmakers opposed it. They said experiences from other states show that gasoline tax suspensions were quickly eaten up by rising prices. They said the state lacked the tracking capacity to get the relief checks to the right people efficiently.
Still in love with cutting income taxes, Republican lawmakers have instead proposed that we simply accelerate the schedule of income tax rate cuts already approved. Hutchinson looked at $1.47 billion and said okay.
Then lawmakers proposed depreciation tax cuts for small businesses. Then Hutchinson came up with the idea of improving education in Arkansas.
Then, after Uvalde, Hutchinson proposed spending $50 million in capital expenditures to make schools safer from mass shootings. It is a traditional use.
So, yes, it’s a choice. Doing any of these non-traditional things is risky. Doing two at once is a mistake. To do all three would be malfeasance.
So we have to classify them. I would go with teacher salaries. But there’s no way Republican lawmakers would opt for that over general income tax relief.
It’s pretty clear that lowering taxes will be the top priority. Damping should be three. Teacher salaries will keep the pressure on the middle.
What I know for sure is that we shouldn’t dare to do all three and then hand over the state budget to Sarah Sanders and her promise to “phase out”, not “reduce”, the income tax.
It’s a good way to put yourself in a difficult situation.
John Brummett, whose column appears regularly in the Arkansas Democrat-Gazette, is a member of the Arkansas Writers Hall of Fame. Email him at [email protected] Read his Twitter feed @johnbrummett.