Retreat, yes
Given the opportunity to keep a little bit of fairness in Arkansas’s generally regressive tax system, and at the same time hold on to a source of revenue for public education and other vital needs, the House of Representatives Revenue and Taxation Committee declined. This is worse than merely not advancing. It is shifting into reverse.
The estate tax is perhaps the most just of all the state’s taxes. Paid by only the very wealthy, less than 1 percent of the population, the tax has produced around $20 million a year in revenue. President Bush, a champion of those who inherit well, persuaded Congress to end the federal estate tax. The only way to preserve the Arkansas tax is for the state to separate it from the federal tax. About 20 farsighted states have done so.
In HB 2392, Rep. Jay Bradford of Pine Bluff offered Arkansas a chance to keep the estate tax. But the Revenue and Taxation committee feared antagonizing the tiny group of ultra-wealthy more than it sympathized with the huge majority of low- and middle-income Arkansans who benefit from the revenue the estate tax produces. The bill failed to win a favorable recommendation.
Term limits were supposed to make legislators more independent of special interests. Instead, the limits have had the opposite effect, eliminating legislators with the experience, the knowledge, and the local following to defy the dark powers on occasion. Bradford is almost the last of this type of legislator, and he’ll be gone after the current session.
Better showing
To be fair, though, as of this writing, term-limited senators were holding out against a scheme to divert money from the schools to private shopping developments. But it’s a first-term representative (see how quickly they learn), Dustin McDaniel of Jonesboro, who is the chief sponsor of a bill to facilitate tax-increment financing (TIF) projects by allowing them to use property tax revenue heretofore reserved for the schools. A Jonesboro developer has plans for a new shopping complex, and would be pleased if public money would help pay for it.
HB 2735 has cleared the House but is stalled in the Senate Revenue and Taxation Committee. Opponents say the public school budget cannot stand to lose money to TIF projects. Frequent foes, both the Arkansas State School Boards Association and the Arkansas Education Association, the teachers union, are opposed to HB 2735. The idea behind the TIFs is that they will bring such great prosperity and increased sales tax revenue as to offset any loss of property taxes by the schools. But chain shops and low-paying jobs, probably only moved from one part of town to another, do not bring such prosperity. Arkansas keeps trying to mall its way to prosperity, and getting mauled instead.

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