Arkansas House budget leader ready to debate taxes

Rep. Kathy Webb, D-Little Rock, will be the House co-chair of the powerful Joint Budget Committee in the 2011 regular session.

Webb, a restaurateur and small business owner, says her eye will be focused on keeping a balanced budget, serving the needs of citizens dependent on state services, and entertaining a robust debate on tax reform in the session.

While some have suggested a review of corporate and capital gains tax cuts — which Webb supports debating — she also suggests other areas in the tax code should be examined.

"Last time, we didn’t have as much debate on some of those tax issues as I think we could’ve. There are all kinds of tax exemptions out there that I think we need to take a look at, like a lot of states do," said Webb. "A lot of states go back every few years and look at what the tax exemptions are."

Webb said she’s worried about the state’s debt to the federal government regarding the unemployment trust fund, which pays benefits to those who lose jobs. To date, Arkansas owes the feds between $300-$400 million. Interest payments on that liability are due beginning in January.

"There are about 35 states in the same boat that we’re in, so there’s a lot of uncertainty about that right now. There’s a feeling still that Congress could come back and do something to push that back," Webb said.

The unemployment insurance trust fund debt could be as high as $475 million by the end of 2012, Randy Zook, president and CEO of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, said recently during a Fort Smith presentation.

Zook has said the state chamber’s plan would raise taxes Arkansas businesses pay into the unemployment compensation fund. He acknowledged it will not be popular, but said if Arkansas businesses don’t come up with a plan, the federal government will.

Webb said Gov. Mike Beebe’s balanced budget appears conservative, but with looming Medicaid issues, prison overcrowding, and highway needs, a lot is subject to change between now and adjournment.

Webb recently appeared on Talk Business, a Little Rock television show, to discuss a myriad of budget issues for the 2011 regular session. Link here for more from Webb, including the video of her interview with Talk Business Owner Roby Brock.