Democrats & Republicans Ratchet Up The Rhetoric

Lest we forget the daily exchanges from last year’s campaign cycle, it seems we have a renewed rivalry between the Republican Party of Arkansas and the Democratic Party of Arkansas over legislative wranglings.

This week, the two political parties ratcheted up the rhetoric on tax cuts and budget issues – two areas where we’ve witnessed partisan, bipartisan and inter-party agreement and disagreement.

On Wednesday, the Arkansas GOP chastised Democratic state senators on the chamber’s Revenue and Tax Committee for failing to support HB 1002, a bill to eliminate the capital gains tax. The 4 Republican members of the 8-member committee supported it, but the bill needed 5 votes to advance.

“House Bill 1002 was defeated by Democrat Senators oblivious of the reality that Arkansas’ high capital gains tax is hindering entrepreneurial spirit from materializing in the state," said state GOP Communications Director Katherine Vasilos. "Reducing the capital gains tax unleashes Arkansas potential to become an engine for job creation and a magnet for business development."

Noting that Texas, which has no capital gains tax, was the subject of much of Wednesday’s committee testimony, state Democratic Party Chairman Will Bond responded, "Arkansas Democrats stood up for responsible budgeting today (Wednesday), following Governor Beebe’s lead. Arkansas Democrats like Governor Beebe are responsible leaders. Republicans want to follow the ‘borrow and spend’ mentality of states like Texas. We’ve worked too hard to move Arkansas forward to let that bad policy take root here.”

In the press statement, Bond noted how Texas has a $13.4 billion budget shortfall. Subsequent news reports indicate that Texas actually has a $23 billion shortfall and is looking at massive cuts to spending in Medicaid and public education. The Democrats’ press release also cited other surrounding states that have budget shortcomings.

“Republicans are addicted to the ‘spend and spend more’ mentality with no regard to a balanced budget. Arkansas Democrats’ responsible leadership has kept our state among the most fiscally sound in the country at the same time providing the largest tax cut in state history,” said Bond in reference to Beebe’s efforts to reduce the grocery tax.

That prompted a counter-response from the Arkansas GOP. In a press release titled, "Arkansas Democrats ID Theft Attempt Foiled," the GOP rebutted a number of Democratic assertions.

The release hammered the growth in spending from Beebe’s 2012 proposed budget, which includes 2.5% of increased spending.

"The Republican Party supports tax reduction, not spending increases. The Capital Gains Tax Cut is not a spending increase. It’s unfortunate that Democrat Party Chairman Will Bond, Senator Larry Teague and the State Representatives who spoke against House Bill 1002 don’t understand basic economics, and would rather protect the government before protecting Arkansans," the release said.

"Despite a bi-partisan effort to secure the economic future of Arkansas, Governor Mike Beebe has publicly opposed every tax cut in the 88th General Assembly other than a half cent grocery tax reduction he advocates," it also said. 

Beebe has been outspoken in his criticism of additional tax cuts. On Thursday, he signed off on a bipartisan agreement that calls for about $15 million in extra tax relief beyond his grocery tax cut.

The GOP statement also credited former Republican Gov. Mike Huckabee for leaving the state an $800 million budget surplus when he left office, but Democrats counterpunched.

"Unfortunately, the extremists who’ve taken over the state Republican Party are a far cry from Republican Gov. Mike Huckabee who minded a balanced budget," said newly hired Candace Martin, spokesperson for the state Democratic Party. "Under the leadership of Governor Mike Beebe and a Democratic legislature, that money was returned to taxpayers in the form of the largest tax cut in state history and to ending the decades long court case over the adequacy of Arkansas public schools."

Democrats also countered with another offensive during the past few days. They pounced on an initial vote by House Republicans to not approve a $6,389 annual spending increase for the Arkansas School for the Deaf.  The vote took place in Tuesday afternoon’s House session and, at the time, the bill failed to secure enough votes for passage due to GOP opposition.

The move mirrored a pattern seen all year by House Republicans, particularly freshmen legislators, who have voted in bloc to oppose appropriation bills with any level of spending increases.

"The extremist wing of the Republican Party has taken the reigns of their legislative caucus and their actions have hurt Arkansas children in the process," said Joint Budget Co-chair Rep. Kathy Webb (D-Little Rock).

Rep. John Burris (R-Harrison), the GOP House minority leader, said the vote was about the budget and holding the line on increased spending.

"We’ve had a very, very, very fair standard since the session started. Every single bill that’s been voted down has had a spending increase," Burris said. "I’m very disappointed that someone would make this about a particular agency or a group of people."

The bill passed the House with bipartisan support on Wednesday after another attempt.

The Democratic Party took the opportunity to try for more points. Referencing a blog post on Blue Hog Report, a left-of-center blog and content partner with Talk Business, Democrats noted in another press release that Republicans who initially opposed the Deaf School funding were receiving $34,950 per month in reimbursement expenses paid to their home-based or personal businesses.

The Blue Hog Report highlighted a long-standing reimbursement practice among state legislators whereby they bill the state for expenses involved in serving constituents. This can often involve lawmakers "renting" a portion of their homes for "office expenses" through companies formed for the primary purpose of routing the reimbursement funds, which are permitted.

The practice has been used in the past by both Democrats and Republicans. However, the Democratic press release singled out what it called "Republican hypocrisy."

"While Rep. Burris and other extremist members of his Party talked a big game about cutting spending for the education of deaf kids, they had more than enough resolve to find the dollars to spend on themselves," the DPA’s Martin said. "To deprive Arkansas School for the Deaf students of necessary resources for a quality education is appalling. To do so while accepting increases for personal spending is insulting."

The GOP’s Vasilos responded, “The practice of contracting for services by a legislator to better serve their constituents is not unusual or confined to one party. House Republicans put a short-term hold on spending money until their colleagues across the aisle acted on tax reduction that will put money back into the pockets of Arkansans."

Vasilos added, “Today (Thursday), a tax-cut deal was agreed upon by House and Senate leaders and the Governor. The deal more than doubles what the Governor initially proposed, but is the positive end result of temporary holds placed on some spending bills by House Republicans."

With at least another week of the session remaining and future debates on Congressional and legislative redistricting, both parties are certain to keep lobbing their verbal barbs in advance of the 2012 elections. For those who cover and follow politics, the end result is likely to be what we call "good copy."