Just not a priority

No one in the newly Republicanized governor's office or the recently Republicanized state Legislature conspired to cut taxes on rich people and pay for it by cutting spending for poor people's health and dental care in the Delta.

It just turned out that way.


What we have here is neither a sinister cabal nor a malignancy. It is merely a benign reflection of the kinds of priorities that get automatically established from the prevailing conservative Republican school of thought.

And that prevailing school of thought goes as follows: We need to cut taxes generally, downsize government, give a break to the wealthy "job creators" and reduce the dependency of poor people on the government.

It's the arithmetic that interests me. And the priorities.

The recent legislative session first tried to reduce previously passed tax breaks on persons realizing capital gains. The point was to pay for Gov. Asa Hutchinson's middle-class tax cut, a centerpiece campaign promise.

But then, as the session drew to a close, legislators decided they could afford to reinstate those full capital gains tax cuts after all, albeit through a phased-in process over the two years of the coming biennium.

Capital gains are generally enjoyed by better-off people. They tend to be the ones with valuable property that they can sell for a profit.

What was reinstated in phases was an increase from 30 percent to 50 percent in the tax-exempted portion of a capital gain, and, for the sheer outrage of it, a complete lifting of any capital gains tax at all on any amount of a capital gain exceeding $10 million.

The thinking is that people getting that rich all at once just leave the state for a tax haven--Florida, for example--so we may as well fashion our tax policy to their convenience.

The estimated loss to the state treasury of the capital gains tax break is $6 million in 2015-16 and $11.8 million in 2016-17.

Then, in the waning hours of the session, the muckety-mucks doing the private writing of the Revenue Stabilization Act to control all spending realized they needed to take a few million dollars out of the budget to balance it.

So they eliminated altogether a $4.9 appropriation through the state Health Department for grants to the state's 12 federally aided nonprofit community health centers, which operate over a hundred clinics, many in remote rural areas where they provide the only nearby health services.

Here, then, is the arithmetic that interests me: The Legislature could have left the capital gains tax treatment alone and saved $6 million the first year and $11.8 million the second. And that would have been more than enough to continue helping the community health centers at the existing level of $4.9 million.

I've got $1.1 million left over the first year, which we could have simply handed to a rich guy.

This state funding for the community health centers began in 2009 with the enactment of a cigarette-tax increase mainly to pay for trauma centers in selected hospital emergency rooms.

The centers got $10 million a year initially, which was used to open new satellite clinics, buy new equipment, hire new staff and introduce dental care. But then-Gov. Mike Beebe took the appropriation down gradually over the years on the theory that the private-option form of Medicaid expansion was delivering new revenue and reducing uncompensated care.

So then the Revenue Stabilization Act got dumped on legislators' desks in the final hours of the recent session, and suddenly the community health centers were down to ... zero.

Sen. Jonathan Dismang of Beebe did it, I'm advised, and he readily acknowledges playing a part.

He told me something had to go and that the community health-center funding had been cut in half already since 2009--and was surely getting offset at least in significant part by new revenue from the private option.

Dismang said he and others preferred to cut grants such as those for the community health centers, rather than to cut direct state government employment positions.

And he said money was set aside in a "rainy day" fund, and that community health centers may apply for grants from there to meet urgent or pressing needs.

Dismang scoffed at the idea that he might be peeved at the community health centers for getting a special Medicaid reimbursement under federal law.

That reimbursement is more favorable than the state Medicaid treatment under the private option, of which Dismang was a proud original architect. He pointed out that local libraries also previously depended on grants and got similar reductions.

So it's understandable how all of that happened. It follows a certain logical progression.

But it still comes down to rich people getting a tax break that is being paid for with money taken from health care for poor people.

It's not a sinister conspiracy. It's merely a priority.

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John Brummett's column appears regularly in the Arkansas Democrat-Gazette. Email him at [email protected]. Read his blog at brummett.arkansasonline.com, or his @johnbrummett Twitter feed.

Editorial on 05/14/2015

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