Arkansas Legislative Preview: Taxes, redistricting and prisons

Editor’s note: The following is the first of three articles by Talk Business Editor Roby Brock, who is a content partner with The City Wire, about nine big issue areas most likely to dominate activity during the 88th Arkansas General Assembly. The Assembly convenes Jan. 10. The second article and third articles will post Wednesdy and Thursday, respectively.

With Arkansas lawmakers poised to commence the 88th General Assembly next Monday (Jan. 10), attention turns to the state capitol in Little Rock. The make-up of this year’s session will feature newcomers and near-even numbers of Democrats and Republicans in both chambers.

What issues will dominate this year’s session? Education, prisons and Medicaid eat up more than 90% of the total $4.6 billion budget and those three areas will certainly be important.

But there are a litany of other major issues that will compete for legislators’ time and attention. Here is the first installment of our three-part series profiling the major legislative arenas that will garner political headlines for the next few months.

TAX CUTS & THE BUDGET
While Gov. Mike Beebe would prefer these two areas of legislative activity be considered separately, it will be hard for them not to become intertwined.

Republicans — and some Democrats — can read the tea leaves of the last election and they know that Arkansans want to see a smaller, more efficient, less taxing government at all levels.

In layman’s terms, a language spoken by many state representatives and senators, that means finding something symbolic and reformatory in the state’s diversified tax code.  Beebe has proposed another half-cent reduction in the grocery tax and says nothing more can be cut without losing essential state services.

Lawmakers will buck the Governor on this issue and set up a late-session showdown. Capital gains taxes, personal and corporate income taxes, new and used car taxes, and a variety of exemptions will all be examined, re-examined and debated. Without the Governor leading the charge, it is unlikely that a massive overhaul or re-thinking of the state tax code will occur.

It is more likely that a change to the used car tax might give legislators that symbolic victory of "more" in the tax cut arena. They’ll certainly give Beebe the grocery tax cut. Watch for state revenues to see an uptick late in the session. That combined with a little nip-and-tuck in the state budget will produce the needed savings to do more than what the Governor wants at this juncture.

REDISTRICTING & PARTISAN REALITIES
Redrawing congressional district lines will be a huge undertaking in the 2011 session. So will getting state legislative boundaries prepared for reapportionment.

The General Assembly will vote on new boundaries for Arkansas’ four Congressional Districts thanks to new data from the decennial census. The First District is bound to get more Republican as will the Third. Scenarios abound for the Second and Fourth Districts — two areas Democrats would like to keep as Democratic as possible.

Unfortunately for them, the Democrats don’t have the supermajorities of the past to control the redrawing of these lines. Republican gains in 2010 have given the GOP newfound strength at the state legislature and this is an area where they may definitely flex their muscles. They have even numbers on the pivotal Senate State Agencies Committee, which will be charged with much of the oversight of redrawing those lines, and with 3 of the 4 Congressional seats in the GOP’s control, it will be difficult for Democrats to wrestle much advantage in this area.

While the session is taking place, another important redistricting process will quietly unfold. State lawmakers will look for ways to strengthen their political hands as the State Board of Apportionment reworks the 135 House and Senate seats.

Population shifts will give Republicans easy pick-ups, particularly in northwest Arkansas, where a new Senate seat is expected to be drawn. Be on the watch for a possible Latino-majority House seat in the region, too, as Hispanic population growth may finally have tipped the scales in Arkansas.

Though redistricting should be a visible area of partisanship, other issues may be more difficult to observe. Taxes are a logical topic of potential divide and ethics may be another arena, but don’t be surprised to see Democrats in agreement with Republicans on many of these issues. Suggestions of partisan derailment at the legislature may never truly materialize in 2011.

PRISONS
Arkansas has a prison crisis. It is not that we don’t want to or can’t keep bad guys in jail with tough laws. The problem is the state can’t afford to keep them behind bars.

The state’s prison woes are expected to cost an additional $1 billion during the next 10 years if trends continue. The Governor, legislators and prison officials know this kind of money doesn’t and won’t exist.

Arkansas will look at how other states are successfully addressing this burgeoning budget and social issue. States as big as Texas have made strides; so have comparable counterpart states like Kansas. Later today (Jan. 4), Beebe will join officials from the Pew Center to unveil the final results of a study that will seek to address prison problems.

Expect to see a plethora of initiatives aimed at reducing some sentences, shifting non-violent offenders to more community punishment-oriented work, thus freeing up beds for true threats to society.

A point of contention to watch: law enforcement officials, including Attorney General Dustin McDaniel, will be wary of changes to drug-related crimes. Murderers and rapists are easy targets to keep in jail, but other less-threatening offenders still pose big risks in the eyes of some. This debate has dangerous consequences.

TOMORROW: Health care, economic development and education.