Arkansas Senate Report: Prisons, highways and the UI trust fund

Editor’s note: Arkansas Sen. Jake Files, R-Fort Smith, provided the following commentary on the previous week of the 88th Arkansas General Assembly.

There is still a great deal to be accomplished in this Session, and our time is getting short.  Word on the street is April 1 may be the last day.

You will see a great deal of activity in the coming week, as Monday (Mar. 7) is the last day to file a bill. Committee agendas are becoming back-logged with new and old bills, and it will become more difficult to navigate an idea from a bill to a law simply because of time constraints.

Having said that, last week was particularly interesting, and I think it will continue to be with all the political gamesmanship being played (good and bad)!

BIG ISSUES LEFT
We have yet to deal with the prison reform issue, although a bill has been filed (SB750) that has now been agreed upon by all major stakeholders.

This last week, the Prosecutors and the Legislature and Governor found middle ground on a couple of their issues while maintaining the premise of the bill was kept intact.

As stated, this bill projects a saving of $875 Million in 10 years while maintaining that violent criminals stay in prison.

Highway Improvements are also on tap and a source of controversy — only in the form of who pays for them and how. There have been several ideas floated this Session from credible people, including an increase in the sales tax, special assessments on auto-related products, new bonds, and an increase in the diesel tax.

The Arkansas Truckers Association has pitched an idea to increase the tax on diesel by 5 cents per gallon and specify that all monies go to interstate construction and rehabilitation only, rather than on all state roads.

Do not fear, this will be referred to the voters and voted upon before passage.  Interesting point in that the truckers, by their admission, buy 90% of the diesel in the state and would therefore be mainly  taxing themselves.

Another elephant in the room is the payback of the Unemployment Trust Fund. Simply put, we owe the Federal Government about $330 Million dollars from a loan to cover the increase in payments to unemployed workers. Many states got the loans from the Feds (most probably thinking they would be forgiven), and it is coming time to pay them back … with interest.

An idea I believe has some merit is to refer a vote to the people (once again, the voters get their say in these issues) to fund a bond issue at a far better interest rate than we would get from the Feds and then dedicate future unemployment assessments from businesses to the pay down the bonds.

There will be some modifications in the unemployment laws as a result. A cap on weekly amounts, potential drug-testing, and education requirements being among some that have been filed.

Another thing I find/found interesting in this debate is that we “owe” the Feds this money, but we also still tout a balanced budget. Can both of those facts co-exist? I believe this should be reported on as a budget item so it shows a realistic view of what state government’s obligations are.

There certainly are other items (like redistricting) that will be brought up shortly as well.

ITEMS OF NOTE
The fireworks began in the tax cut debate last week as all the Senate-passed tax cuts made their way to a hearing in the House Revenue & Tax committee.

All of the bills were tabled as the House committee debated the long-term benefits of some of the taxes. I don’t disagree that there may be better cuts to be made. We need to index and cut personal income taxes. The problem with all that is the fact that we have bills that help manufacturers, businesses, and individuals ready for passage and they did not get a full hearing or vote.

I think the people sent us to Little Rock to responsibly cut taxes, not to argue over which taxes to cut. There is also a danger that if the Senate cuts one batch and the House cuts another, the Session will end and no taxes will be cut, which will be a negative to the people of Arkansas.

I am the lead sponsor on SB738 which deals with the transfer of responsibility of internet tax collection (link included). This has been misaligned by a few as a tax increase. Simply not true. There are tax laws already on the books that require taxes be paid on internet purchases by YOU the purchaser. Most people do not know this.

This law transfers that responsibility to the seller of the goods. Several important points on this:
1) This bill helps level the playing field to the Main Street Businesses in our town and others … those who employ, pay taxes, and invest in the community.
2) There is not a revenue increase projected by the Department of Finance. I am not a tax-and-spender. If I thought this was a tax increase, I would not be supportive and not be a sponsor.
3) This bill is business related, so only when a seller (out-of-state) sells $10,000 per year does this go into effect. It will not apply to your selling of golf clubs (or buying them) on ebay!

This bill should come up in committee this week, and there will be good evidence presented with my testimony.

REGIONAL RELEVANCE
During my campaign last year, I constantly heard that we needed to be relevant in Little Rock. I believe this Session we have made some real strides to that end, and we will continue to build on a solid foundation. The fruit of this will be evidenced as we continue to grow as a Region and develop state and local networks. I hope this teamwork will be evident for all of us to see.

Thank you to so many who have been supportive and expressed concerns and issues for me to address and hopefully resolve. I look forward to continuing to serve.

The direct phone to the Senate is (501) 682-2901, and my e-mail is [email protected]

I look forward to hearing from you.