Fix Welcome Even If ‘Temporary’ (Editorial)

We’re not sure why state legislators were able to come up with a state budget plan in four days of a special session when they couldn’t manage one in the 94-day regular session.

We are, however, grateful. Forgive us for our earlier skepticism. We knew they eventually would come up with a budget, it’s just that it was less painful than we’d expected.

The compromise plan includes tax hikes to make up the two-year $150 million budget shortfall that was projected. Gov. Mike Huckabee quickly signed the measure, which increases tobacco and income taxes.

It features a temporary 3 percent surcharge on income taxes that would generate about $39.9 million this year and $52.1 million in 2004, according to state estimates. The surcharge sunsets in two years if revenue projections come through.

Tobacco taxes, meanwhile, will rise by 25 cents a pack on cigarettes and by 7 percent for other products, such as smokeless tobacco. That will raise about $54.8 million.

The breakthrough for getting the surcharge passed came from making it temporary, although we’ve always been warned about so-called “temporary taxes.”

The compromise plan calls for the surcharge to end in two years, but only if annual revenue growth meets or exceeds 4.3 percent. The amount of the surcharge could drop to 2 percent or even 1 percent in future years, depending on the growth in the state revenue.

It’s amazing what can happen when the legislators put the interest of the state first and act and vote responsibly.

The legislators, knowing that they must deal with the Supreme Court mandate to make the state’s public schools adequate and equitable, apparently saved an increase in sales taxes to help with that crisis. They’ll deal with that in another special session in the fall.

The governor said after the regular session that a second special session might be needed in June to clean up some other items unresolved in the regular session, but that seems an unnecessary expenditure of time and money. Special sessions should be reserved for legislation that absolutely, positively must be done before the next regular session. Legislators, like journalists, seem to work best when they have a firm deadline.

As a reminder, there’s a Jan. 1 deadline to come up with a solution to the Lake View ruling by the high court. We wish them the best. The future of the state is riding on the outcome.