Ethics, redistricting and tax cuts may take center stage

Editor’s note: Roby Brock, with our content partner Talk Business, wrote this report. He can be reached at [email protected]

Arkansas lawmakers appear to be slowly easing into their legislative functions nearly three weeks into the 88th General Assembly.

Don’t let that lull fool you.

Behind the scenes, a number of conversations have been taking place that will influence the final outcome of the state budget, tax cuts, ethics reform and redistricting.

ETHICS
As early as this week, there is a good chance that the consensus forming on ethics will be revealed to the public. Talk Business has learned that legislative leaders have found common ground on two major areas of ethics legislation.

First, a one-year cooling off period for legislators to become lobbyists will be proposed, but it is likely that existing lawmakers will be grandfathered in to the new rules.

In a second area, House and Senate members have apparently agreed to limit travel expense reimbursements to the least costly means available. In short, if it costs less to fly to a conference than to drive and receive mileage reimbursement, then a lawmaker will get the smaller reimbursement rate.

These two measures have bipartisan support, so expect this to be a win-win for Democrats and Republicans.

There is no consensus on a reform that was debated to require smaller reporting figures from lobbyists. Currently, they must report any expense of $40 or more spent on a legislator. Some advocates have supported a "Wal-Mart" rule, which would prohibit any expenditures; others pushed for a $5 rule, which would mandate reporting of small expense items such as lunches or cocktails.

REDISTRICTING
The redistricting bandwagon is just beginning. While Arkansas won’t get its detailed precinct-level Census data until late February, speculation regarding what counties may move into new Congressional boundaries have begun.

Will Sebastian County slide into the Fourth District? Does Lonoke County, a GOP hot spot, move into the Second District or possibly the Fourth? Will Jefferson County find its way into the Second District to shore up the Democratic vote? Nothing is set in stone, but the scenarios are numerous.

There is even speculation that some African-American lawmakers may push for a "majority" Black district that would pick up heavy African-American precincts from Little Rock and Pine Bluff through the Delta towards Memphis. Arkansas is the only Southern state without a "majority" Black Congressional District and the state has not elected an African-American to Congress since Reconstruction, a distinction that separates Arkansas from its Southern peers.

There will certainly be a push for Congressional redistricting to be completed before the session adjourns, but the final lay of the land is far from complete. In the end, the General Assembly will vote on the new district boundaries – which are likely to include split counties for the first time in Arkansas. The two chambers’ State Agencies committees will be the catalyst for the redistricting.

TAX CUTS & THE BUDGET
Of course, tax cuts tied to the budget process have been the most highly anticipated showdown between the legislative and executive branches for this session.

Gov. Mike Beebe claims his $4.6 billion budget — which includes about $130 million in growth funding for schools, prisons, human services and a half-cent grocery tax cut — is airtight. Some lawmakers, primarily in the GOP, beg to differ.

Talk Business has learned that the debate could cut in several different directions. First, you are likely to see a push to eliminate the growth funding in the Governor’s budget proposal. That would put $130 million in play, although sources say that all of that money may not be tied to tax cuts.

Targeted tax cuts, such as a less penalizing used car tax or a reduction in utility sales taxes for manufacturers, could see new life under this arrangement.

Another school of thought has lawmakers looking at a longer-term vision of tax reform in the state. For months, requests have been made to the Department of Finance Administration asking for projections on how reductions in the personal and corporate income tax rates would alter state revenues. You may see staggered reductions or realignments in these tax rates tied to revenue forecasts, triggered into effect only if tax collections hit certain levels.

Will any of these scenarios find majority consensus? Will the Governor and legislators strike a friendly compromise? Besides ethics reform, very little of this will be aired publicly anytime soon. Much of this discussion will take place behind closed doors and in private negotiations.