Proposed tax cuts expected in days

Legislators seen near agreement

Thursday, March 21, 2013

Legislative leaders said Wednesday that they are days away from publicly identifying tax cuts they hope to make this year.

Also Wednesday, the 66th day of the legislative session, lawmakers considered switching to nonpartisan elections for prosecuting attorneys, letting teachers administer insulin to diabetic students and allowing people to carry concealed weapons in some parochial schools.

Republican leaders have suggested a $100 million to $150 million tax-reduction package but so far have provided few details.

House Speaker Davy Carter, R-Cabot, said the process is on track.

“I don’t think there’s anything unique about where we are and the time frame and the discussions,” Carter told reporters. “The biggest dollar-amount bill that I’ve looked at and support out of the House is the income-tax reduction, so I think that will take up a good portion of the bucket.”

Gov. Mike Beebe, a Democrat, has proposed a general-revenue budget of $4.947 billion in fiscal 2014, including $10 million in rainy-day funds, up from the current budget of $4.727 billion in2013. He has not proposed any tax cuts in fiscal 2014 but has suggested a way to further reduce the sales tax on groceries if other state obligations go away.

Carter said Wednesday evening that he was on his way to a meeting with Senate President Pro Tempore Michael Lamoureux and Beebe about tax cuts.

“We talk about this stuff every day and have been talking about it every day for weeks,” Carter said. “I think we’re pretty close to coming to some consensus here.”

On Wednesday the Senate Revenue and Taxation Committee endorsed taxcut legislation sponsored by Sen. Keith Ingram, D-West Memphis, that the state fi-nance department estimated would reduce state general revenue by $13.6 million in fiscal 2020.

Senate Bill 108 sponsored by Ingram would increase the five years in which net operating losses can be carried forward for tax purposes to 10 years for losses occurring on or after Jan. 1, 2013. Businesses can use the losses against income earned in the future.

The bill would reduce state general revenue by about $13 million a year after fiscal 2020 and ultimately cut state general revenue by about $63.4 million in fiscal 2024, according to the state Department of Finance and Administration.

Ingram said the bill - backed by the Arkansas State Chamber of Commerce - would keep Arkansas’ businesses competitive with those in surrounding states, which have 10 years in which to carry forward their losses.

Afterward, Lamoureux, R-Russellville, predicted that Ingram’s proposal will stall because it devours too much of the money available for tax cuts.

“I haven’t heard anybody else talking about that one other than Keith, and I think once the people who see the impact is outside of the two years [fiscal 2014 and fiscal 2015], it is hard to me to imagine that being part of [the tax package].That would essentially gobble up the whole allocation.”

Lamoureux, who serves on the committee, expressed frustration that it is advancing a series of tax cuts on its own instead of working with others to come up with a package of top-priority tax reductions. NONPARTISAN PROSECUTORS

The House of Representatives voted 63-24 to approve a bill that would create nonpartisan elections for prosecuting attorneys.

Rep. Matthew Shepherd, R-El Dorado, said it is a prosecutor’s job to uphold the law and House Bill 1855 would ensure that prosecutors are elected on the basis of their individual merits and not because of their parties.

The bill also would send filing fees, which currently go to the parties, to a fund to be used to pay salaries of trial-court assistants.

Shepherd sponsored a similar bill that failed earlier this session and that also changed the dates of runoff elections. HB1855 would not affect those elections.

“One thing that I have still not heard is what is the distinction between a Republican and a Democrat prosecuting attorney,” Shepherd said.

Rep. Stephen Meeks, R-Greenbrier, said making the position nonpartisan would leave voters in the dark.

“If they don’t know thepeople [running for office], then the second [criterion] they usually base their decision on is party label, because it generally tells how a candidate views different things,” Meeks said.

But Rep. Nate Steel, D-Nashville, said prosecutors are not like legislators because it is not their job to take positions on policy issues.

Steel said he had not heard a good policy argument for why the position should be partisan.

“If how someone’s going to administer the law, [and] their party affiliation tells you something about that person, we need partisan judges. We need partisanship in every aspect of the court system if that’s the case. We need partisan juries. … Partisanship has no place in a courtroom, absolutely none,” Steel said.

ETHICS BILL

In a 34-0 vote, the Senate sent to Beebe a bill to bar the state’s constitutional officers from registering as lobbyists until a year after their terms end.

State workers employed by constitutional officers also would be prohibited from lobbying for a year after they leave their jobs under Senate Bill 331, sponsored by Sen. David Sanders, R-Little Rock. State agency heads, their deputies and members of the Public Service Commission also would be barred from lobbying for a year after leaving their government posts.

The 2011 Legislature created a one-year cooling-off period before exiting lawmakers can register as lobbyists, and it’s a good idea that the legislative, executive and judicial branches of government operate under the same rules, Sanders said.

FILM INDUSTRY

The Senate unanimously approved House Bill 1633 by Rep. John Edwards, D-Little Rock, to overhaul a law enacted in 2009 aimed at encouraging the film industry to choose Arkansas for film locations.

The bill increases the minimum production-cost threshold to qualify for rebates from $50,000 to $200,000 and increases the production rebate from 15 percent to 20 percent of the total qualified production costs.

$1 MILLION AWARD

The Joint Budget Committee’s Claims Subcommittee awarded $1 million to the family of a man who was shot and killed by a 16-year-old who had been released early from the Department of Human Services’ Youth Services Division.

Maurice “Beau” Clark was killed during a home invasion on June 30, 2009. Antonio Terry, who had been released from the division’s custody two months earlier, pleaded guilty to first-degree murder and aggravated robbery in the case and was sentenced to 65 years in prison.

The state Claims Commission had awarded $1.5 million to the family, a figure reduced to $500,000 by the Claims Subcommittee last week.

The Joint Budget Committee returned the claim to the subcommittee after an objection from Sen. Jeremy Hutchinson, R-Little Rock, who asked for more members to be present to vote. Hutchinson had said he wanted the subcommittee to review the recommendation and its decision to decrease the size of the award.

UNPAID BILL

In other business, the subcommittee awarded $18,693.10 to The Compliance Group Inc. for audit services it performed for the University of Arkansas at Pine Bluff beginning in August 2012.

In its March 1 filings with the Claims Commission, the company wrote that it was initially contracted to review the records of about 250 student athletes but that number was increased to about 500. While reviewing the records, the company exceeded the original contract for $50,000 by $18,693.10.

Claims Commission director Norman Hodges told the subcommittee that the commission awarded the amount after the university admitted to liability.

TAX CREDITS

The House Committee on Agriculture, Forestry and Economic Development approved a bill that aims to use tax credits to encourage private businesses to invest in poor rural and urban communities.

Groups called Community Development Entities would raise up to $166 million from private businesses under House Bill 1832 sponsored by Rep. Darrin Williams, D-Little Rock. That money would then be loaned to qualifying small businesses in poor areas of the state. Private businesses that initially provide the money would receive a tax credit, which could then be carried forward for nine years.

The Arkansas Economic Development Commission would approve the tax credits and would begin accepting applications July 15.

The smaller business that would receive the investment would agree to create jobs that pay an average wage of at least 115 percent of the federal poverty level for a family of four. That is $23,550

Certain retail, rental and real-estate companies would not be eligible.

Louisiana, Mississippi, Missouri and several other states have similar tax credits. Williams’ bill is modeled on an existing federal loan program.

GUNS IN SCHOOL

The Senate Judiciary Committee approved a bill that would let churches decide whether they want to allow concealed weapons at their own church-run schools.

Sen. Bryan King, R-Green Forest, said Senate Bill 896 clarifies that if a church allows “concealed carry,” that the policy could also apply to the church’s school. A church that does not allow concealed carry would not be affected.

Earlier this session, the Legislature passed Senate Bill 71. Signed into law Feb. 11, it lets churches decide whether to allow for concealed handgun licensees to carry weapons on church property.

CHARTER SCHOOL BUILDING GRANTS

The Senate Education Committee approved a billthat would allow some charter schools to apply for state money to build or maintain an academic facility, purchase land, buy instructional materials or repay debt.

Senate Bill 117 by Sen. David Burnett, D-Osceola, specifies that for the 2013-2014 school year, charter schools would only be eligible to receive a grant if they have been in existence for five years or more, provide transportation to and from school, have a record of academic success and have a student population where 60 percent or more of students receive free or reduced-price lunches.

Many charter schools do not provide transportation.

The bill also creates an “Open Enrollment Public Charter School Capital Grant Program Fund” but does not say where the money will come from. Burnett said the funding would come from one-time money.

One charter school company that likely fits all of those qualifications is KIPP DeltaPublic Schools, which has several campuses. It’s founder, Scott Shirey, told committee members that it is hard for charter schools to raise money for facilities because they don’t have a tax base.

“Any support, or just even the creation of a fund, with the potential to support would make a huge difference,” Shirey said.

EDUCATOR INSULIN

The Senate Education Committee also considered Senate Bill 228 by Sen. Joyce Elliott, D-Little Rock, to allow school officials to administer insulin to a diabetic student at a parent’s request and after training.

Some nurses testified they were worried about inadequately prepared people administering the drug. They said the responsibility should be left to a licensed nurse.

Elliott told the committee that many schools don’t have a nurse on staff and that school officials should be able to help in an emergency.

Front Section, Pages 1 on 03/21/2013