In politics, Arkansas had a watershed year that saw the departure of major candidates from immediate future races, while a traditional blue state turned red. Throw in marijuana, casinos, taxes and ethics and it was about what you’d expect – the unexpected.

Here are 5 political storylines that played out in 2012:

Republicans Make Historic Gains
The Arkansas GOP had a banner year in 2012.  The state’s Republicans picked up all four seats in Congress for the first time since the 19th century, and the GOP fought its way to the majority of both the Arkansas House and the Arkansas Senate.

The anchor of an unpopular Democratic President proved too big of a burden for the incumbent party to hold its long-time majorities and it now finds itself re-grouping to cope with the new reality of Arkansas being a bi-partisan state with a Republican tilt.

The new status for Republicans didn’t come without some pain. The GOP was branded with embarrassing candidates for political office, particularly three failed House candidates who offered up public statements chocked full of unapologetic racism, and it now faces a task it hasn’t had to contend with since the Huckabee administration: governing.

Immediately after the election, a riff appeared in the House as Republican Rep. Davy Carter of Cabot challenged expected Speaker of the House Rep. Terry Rice, a Republican from Waldron. Carter won, but there were hurt feelings and the GOP heads into the historic 89th General Assembly with a healing wound.

At the federal level, Arkansas voters comfortably re-elected three incumbent Congressmen – Reps. Crawford, Griffin and Womack – and they took the open seat of retiring Fourth District Cong. Mike Ross with first-time candidate Tom Cotton.

Cotton promises to be a rising star for years to come in Arkansas politics and with Sen. Mark Pryor the lone Democrat left in the Arkansas delegation, one can assume his re-election bid will be a big prize for Republicans to pursue in 2014.

Ballot Measures Pass, Fail and Fail To Qualify
There was an unusual burst of activity with citizens’ initiatives and referred ballot measures last fall.

The Arkansas legislature referred a $1.7 billion highway bond program supported by a 10-year temporary half-cent sales tax increase. Voters comfortably passed the tax hike despite their propensity to vote conservatively in so many other ways.

The surprise of the season was a medical marijuana proposal that was narrowly defeated. The measure would have allowed for marijuana dispensaries to be regulated for the purposes of distributing the drug for those with chronic diseases.  Compassion advocates nearly succeeded as the proposal received 49% of the vote. Law and order and conservative group opponents were able to hold off passage in 2012, but altering the wording of the proposal and more money to support the effort could tip public opinion in a future campaign.

For months, supporters of two casino proposals appeared poised to make the ballot, but legal challenges to signature collections eventually doomed their qualification for consideration.

Also, an ethics proposal brought forward by a bipartisan group of reformers failed to meet the signature requirements to gain ballot access, but they vowed to return in a more organized fashion in 2014.

Finally, long-time politico and businessman Sheffield Nelson took on the establishment with his push to raise the severance tax on natural gas.  Nelson, a former executive of a natural gas company, wanted to raise the tax to fund highway and local road construction.  In the end, his petition drive came up embarrassingly short and he withdrew his campaign.

Beebe Goes All In On Health Care
For a politician as popular as Gov. Mike Beebe and for an issue as unpopular as health care reform, Beebe has certainly waded in the conversation with little harm.  Beebe and his administration have aggressively pushed for health insurance exchanges, embraced Medicaid reforms through state and federal efforts, and stood by the U.S. Supreme Court ruling in June that the individual mandate was constitutional.

For Beebe, the issue is about tapping short-term money to plug health care needs for citizens and health care providers and finding potential longer-term solutions to what many view as an unsustainable growth curve in public and private health care expenses.

This year, the popular Governor embraced federal change efforts and publicly backed much of the reforms that were at the nucleus of legislative defeats in 2010 and 2012. It didn’t seem to stick to Beebe, who remains well above 60% in popularity and job approval with voters.

Republicans sensed an opportunity to ding Beebe’s teflon reputation and they called on him to restrain aggressive efforts for health care reform in the state.  Their worries?  Voters aren’t keen on big changes and the initiatives involve major budget ramifications for years to come.

In the end, all sides will be working toward a compromise in 2013 as the money would be helpful if the political cover can be provided.

Shoffner Subpoenaed For Office Practices
The controversy only erupted for about a month, but it will be back on the front-burner in 2013.  State Treasurer Martha Shoffner came under fire from legislative auditors and a number of legislative critics for business practices in her office.

Shoffner steered an extraordinary amount of investment business to St. Bernard Financial Services in Russellville and an audit report found “significant deficiencies” with how several large bond transactions were conducted.

In question are millions of dollars from bond transactions that appear to have been sold ahead of maturity. Debatably, the practice may have shortchanged the state millions of dollars.

Shoffner was subpoenaed to appear before lawmakers one Friday morning in September, but she was mysteriously missing all day. She later appeared the following week and in a stunning turn of events, one of her chief investment deputies asked about whistleblower protection. At year’s end, lawmakers and auditors had turned over their review for possible criminal investigation.

Political Jockeying For 2014 Begins
In 2012, there were a variety of unexpected turns that laid the groundwork for the 2014 campaigns, particularly the Governor’s race and a high-profile U.S. Senate seat.

Retired Rep. Mike Ross (D), whose step-down from Congress was expected to begin his run for Governor, announced he would not be a candidate for the office. Ross said after his departure from Congress he would join transmission coordinator Southwest Power Pool in a government affairs post.

That paved the way for presumptive Democratic front-runner Attorney General Dustin McDaniel, who filed articles of incorporation for his campaign and began raising money. His head start brought in more than $1 million in the first fundraising quarter, an impressive number out of the gate.

But an admission of an extramarital affair and his dodging of questions related to the dalliance threatened his front-runner status by year’s end. In short, McDaniel will be dealing with this issue in early 2013 and its full impact on his campaign is a wild card at this juncture.

Other candidates who are considering a Governor’s run in 2014 include Democrats Bill Halter, former Lt. Governor, and John Burkhalter, a businessman and highway commissioner, as well as Republicans Asa Hutchinson, a former Congressman and previous gubernatorial candidate, and perhaps Lt. Gov. Mark Darr (R).

Cong. Tim Griffin (R) was weighing a potential run for Governor or the Senate in 2014, but in late November he gained an influential seat on the powerful House Ways and Means Committee. Upon landing the prestigious appointment, Griffin said, “I’m not going to run for Senate and I’m not going to run for Governor. I’d like to put those rumors to rest.”

The Griffin domino had not fully played out by year’s end, but his absence from the race was good news for two-term incumbent Sen. Mark Pryor (D). Pryor, who unexpectedly announced a pending divorce with his wife of nearly two decades, is expected to field a strong GOP challenge.  Who that challenger may be remains to be seen.

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Talk Business Staff