Ross Discusses Jobs Plan, Corporate Tax Cuts

Democratic gubernatorial candidate Mike Ross’ comprehensive jobs plan includes cutting red tape, investing in education, reorganizing workforce strategies, and slicing taxes. But Ross says there may be more on the tax cut front that could be done to recruit companies and new jobs to Arkansas.

In a Talk Business & Politics interview, Ross said if he’s elected he’d be willing to explore with legislators a moratorium on corporate income taxes for new businesses that might locate in Arkansas.

“I’m interested in hopefully being able to pursue something on that. I know some states basically say, ‘no corporate income tax for the first 10 years if you bring your business, make an investment and put people to work in the state.’ I think that’s something we should look at as well because it’s not going to reduce revenue because that’s revenue we currently do not have,” he said.

Ross discussed a variety of elements of his jobs plan in an extended interview on this week’s program, which you can watch in its entirety at the bottom of this post.

He faces Republican Asa Hutchinson, who will appear on Talk Business & Politics next week, as well as Libertarian Frank Gilbert and Green Party nominee Joshua Drake in the general election this fall.

EDUCATION
A major plank of Ross’ 47-page proposal includes more pre-K investment, which he said could be phased in over time to help upcoming generations of schoolchildren. The price tag for pre-K expansion, which Ross says has a long waiting list of families wanting to participate, would be $37 million a year once it is fully implemented.

“It all starts with education. I think we have to have a long-term and a short-term approach to it,” he said.

As for students who wouldn’t benefit from new pre-K investment because they are already in the education pipeline, Ross said more focus must center on technical jobs training.

“A lot of young people today, they feel like we look down upon them if they do not go to college. They feel like they’ve got three options: college, military, minimum wage. There’s a fourth option out there. I still call it ‘vo-tech,'” he said.

Ross’ plan also calls for the state to produce a Forecast of Careers in the U.S. (FOCUS). The initiative would have state agencies analyze and publish emerging career paths for 8th and 11th graders to consider. He has also proposed a $5 million investment in a program he calls the Innovation Laboratory (InLab) Fund, which would encourage experimentation in classroom teaching through grant funding for pilot projects.

The Democratic gubernatorial nominee said he is worried about falling revenue from the Arkansas Lottery Scholarship. He’s opposed to the expansion of video monitor games that the Lottery Commission is pushing and that state legislators are looking to restrict in an upcoming special session.

In that vein, Ross said he sees this week’s legislative action as a short-term fix to the teacher insurance crisis. He acknowledges that the public school employee insurance fund is a headache he could inherit if elected Governor but, for now, he’s not going to meddle in legislative affairs.

“I don’t want to try to turn it into something related to the political campaign. I think that would be inappropriate. I think we need to let those who’ve been elected to serve now do their job,” he said when asked if he supported the modifications being discussed.

“I haven’t reviewed all the changes,” said Ross, who has the endorsement of the state’s largest teachers’ union, the Arkansas Education Association. “I think everyone from the Governor to legislators have acknowledged that this is a temporary, short-term fix, a band-aid at best. I’m committed, as hopefully the next Governor of this state, to working with Democrats and Republicans, school teachers, administrators, school board members, policy makers to hopefully find a long-term fix to this problem.”

TAXES, WORKFORCE
Reforming the state’s personal income tax code over several years is a major goal for Ross. He wants to follow Gov. Mike Beebe’s effort to slowly phase-in changes.

The crux of Ross’ tax reform plan would be to retroactively index Arkansas income tax brackets taking a 1997 state law and applying it to the 1971 realignment of the tax code. Act 328 of 1997 tied state income tax brackets to inflation on a forward-going basis.

The proposal also includes reductions of one-tenth of a percent to the personal income tax rates passed under Act 1459 of 2013.

Overall, his plan to re-index personal income tax brackets will reduce state revenues by more than $574 million once it is fully implemented.

“It’s about bringing lower, fairer taxes to the hard-working folks in this state. Look, we’ve got six income tax rates in the state and yet 60% of the folks are in the top two rates. One out of every three is in the top rate. Really?” said Ross.

In a nod to industry, Ross also said he wants to eliminate a sales tax on manufacturers who expand their businesses with new equipment. Currently, existing companies in Arkansas are taxed on equipment purchases for expansion projects, while surrounding states provide exemptions. New companies locating in Arkansas also garner the tax break.

Ross said he considered other tax reforms before rolling out his plan and is not close-minded on other possibilities, such as the aforementioned corporate tax moratorium.

On the workforce front, Arkansas lawmakers began a review of workforce training efforts last week with a goal to make major changes to state policy in the 2015 session. Ross said he wants more dialogue between state agencies responsible for helping industry train and prepare workers.

“We’re not talking about any new spending. We’re not talking about any new bureaucracy. We’ve already got six or seven agencies that deal with different aspects of economic development. I just want to get them at the same table, meeting on a regular basis really with a laser-focus on everything from helping create new small businesses, helping small businesses grow.. working towards bringing jobs back from overseas,” Ross said.

He has proposed that Democratic Lt. Governor nominee John Burkhalter — a businessman, state highway commissioner, and former AEDC commissioner — lead his workforce cabinet.

What would happen if Ross was elected, but Burkhalter was not?  Ross said he’s not thinking in those terms right now.

“I’m very optimistic and confident that we’re both going to win and we’re going to work together,” he said. “The bottom line is this: I’m going to be a very hands-on governor. I want to be the biggest economic ambassador this state has ever had. I’m going to be very involved in jobs creation, economic development regardless of what happens in these races.”

Another aspect of Ross’ jobs plan involves creating a new “Work Ready Community” designation for cities. The push would call for communities across the state to step up efforts to qualify workers with training certificates recognized by employers as crucial for job placement.

Ross is proposing a grant program to jump-start high-tech, entrepreneurial activity similar to efforts in Northwest and Central Arkansas, such as the Innovation Hub in downtown North Little Rock.

Ross also supports prioritizing $25 million a year for a Governor’s Quick Action Closing Fund, which Gov. Beebe has used to assist with new and existing economic development prospects.

CUTTING REGULATIONS
Proposing a centralized business licensing portal, Ross said there should be a state website that could speed up and streamline new business filings.

He is also calling on a review “from top-to-bottom” of state regulations. Ross wants to assess if existing regulations are still needed through a bipartisan task force that might recommend changes.

He wants all agency rules and regulations to be published on a singular state web site in a “user-friendly” format and Ross said that regulations should be reviewed every three years after their implementation.

“A lot of small business owners aren’t just dealing with one agency. They’re dealing with multiple agencies and it can get quite confusing,” Ross said.

When asked to name a state regulation he thinks should be removed based on his personal business experience, Ross said, “I don’t know if I could point to one as much as it’s so complicated.”

You can watch the extended interview with Ross below.