Of all the business enterprises in Arkansas, filmmaking seems to deserve a government handout the least. It is hardly a core function of state government to fund Hollywood’s latest blockbusters or to subsidize stars who make millions of dollars for showing up on set. Of course, over two-thirds of states offer film subsidies: Arkansas is one of them. Supporters of film subsidies contend that these subsidies are necessary to lure film production from other states. They claim that the subsidies stimulate a state’s economy and return money to state coffers through increased tax collection. However, when independent studies are done to look at the actual effects of these subsidies, they rarely (if ever) live up to such grand expectations. In states around the nation, film subsidy programs have failed to “pay for themselves” in terms of increased tax revenue. Their track record for job creation and economic growth is weak. They divert money away from necessary government functions, such as prisons and highways. In short, these subsidies by and large enrich Hollywood producers at the expense of state taxpayers. AAI’s newest paper, The Folly of Film Subsidies in Arkansas, argues that there is little or no reason to believe that such subsidies are truly worth the expenditure of the millions of taxpayer dollars they require.
Earlier this year, the Supreme Court of the United States issued a decision in the matter of North Carolina State Board of Dental Examiners v. Federal Trade Commission, which will have profound effects on the operations of state boards and commissions in the years ahead. Because of this decision, if boards and commissions exercise rulemaking or legislative authority in the future, from now on they may face civil or criminal penalties. If the state of Arkansas wishes to avoid such liability, its lawmakers should make substantial structural changes in our state boards and commissions: these changes could also trigger substantial job creation and economic growth. In short, an intelligent reaction to this decision could both advance Arkansas’s economy and protect its citizens and its government from federal lawsuits. Read our new paper, How the U.S. Supreme Court Empowered Political Accountability and Economic Growth in Arkansas, to learn more.
Once again, Arkansas policymakers are debating whether our state or our federal government should establish and manage a health insurance marketplace (popularly called an “exchange”). In a recent presentation to the Health Reform Legislative Task Force, Gov. Asa Hutchinson asked “Why are we building a state exchange, rather than relying upon the continued partnership with the federal exchange?” No real answer has been forthcoming: notably, the advocates of transforming Arkansas’s federal exchange to a state exchange have provided slogans, not substance, when asked to explain the basis of that recommendation. Earlier this week, state Senator David Sanders was interviewed on TV’s Talk Business & Politics with Roby Brock earlier this week about a state exchange. Sanders reacted to Gov. Asa Hutchinson’s questioning the desirability of a state exchange as follows:
I am a supporter of a state-based exchange, and let me tell you why. We’ve litigated the exchange sort of question. The conservative legal strategy was to advocate for a federal exchange -- not a very conservative policy. Historically, states have been where insurance regulation has been managed, developed, and implemented. I think that’s where we need to go, and I think it’s better for us and it does create more flexibility long-term.
This is, unfortunately, gibberish; you’d probably get a more sensible statement about Obamacare exchanges if you threw a bunch of word magnets at a refrigerator. I think Sanders’s critique of the “conservative legal strategy” refers to the King v. Burwell litigation, but that Supreme Court opinion only settled the question of how the federal government was required to read one clause of the Affordable Care Act – it had nothing to do with the question of whether a state or federal exchange is good public policy. Furthermore, the federal control that the Affordable Care Act imposed on each state’s health insurance decisions certainly doesn’t vary depending on what kind of an exchange – state or federal – the state adopts, so Sanders’s claim about the alleged lack of conservatism of a federal exchange seems groundless. Finally, I’m all in favor of “flexibility” – who isn’t? – but it’s worth noting that, so far, defenders of a state exchange have flourished the idea of flexibility more as a slogan or a buzzword than as an actual argument. In fact, the Advance Arkansas Institute just put out a paper that I co-authored on the dangers of a state exchange and the superiority of a federal exchange: "A State Obamacare Exchange: Arkansas's Worst Option." That paper has the virtue of providing actual arguments for the points it makes. Here’s an excerpt:
In fact, establishing a state Obamacare exchange would create huge problems for Arkansas:
- From a tax perspective, a state exchange would impose a 378 percent tax increase on Arkansans who purchase insurance through it.
- From a budget perspective, the establishment of a state exchange appears to be a gateway to new health care fees and new burdens on the Arkansas state budget.
- From a practical perspective, states that have established state exchanges have experienced extraordinary practical difficulties. Indeed, several states have recently abandoned their state-run exchanges for a federal exchange.
- From a policy perspective, a state-run exchange produces little or no meaningful increase in local or state control.
- From a political perspective, voters do not want Arkansas policymakers to set up such an exchange.
- From a legal perspective, establishing a state exchange may violate federal law and invite legal action.
In short, establishing a state exchange would cause problems for Arkansas consumers and burden state taxpayers for decades to come. To put it bluntly, a state exchange is bad for Arkansas.
(I should add that it has always been The Arkansas Project’s policy to allow for the publication of a rebuttal statement on behalf of anyone who wants to respond to our criticisms. In other words: Senator Sanders, we look forward to hearing from you.)
How A Supreme Court Decision Could Boost Arkansas's Economy By Bringing Hundreds of Millions of Dollars and Thousands of New Jobs to Arkansas
In a study published today, the Advance Arkansas Institute found that Arkansas’s economy will benefit if the Supreme Court decides in King v. Burwell that the Obama administration acted illegally in offering health insurance subsidies through its federal insurance exchanges. One implication of such a decision is that, if Arkansas reacts to it by establishing a state Obamacare exchange, this would amount to a huge new Obamacare tax increase on Arkansans.
According to AAI’s paper, “The Consequences of King v. Burwell: How A Federal Exchange Could Block An Obamacare Tax Increase,” this decision by the Supreme Court could produce, on net, thousands of new jobs and hundreds of millions of dollars in benefits to the state’s economy this year -- even using conservative assumptions.
The Supreme Court will announce its decision in King v. Burwell later this month. This case centers on the text of the Affordable Care Act, or Obamacare. At issue is whether the federal government can offer health insurance subsidies through insurance exchanges established by the federal government, or only through health insurance exchanges established by the state, as the ACA’s text reads. Arkansas’s health insurance exchange is a federal exchange, so this ruling would have a significant effect in the state.
If the Supreme Court rules in favor of the plaintiffs and finds federal-exchange insurance subsidies illegal, it would mean that Arkansans could lose a total of $164 million in financial help this year. However, this decision would also end the individual mandate to purchase insurance for many Arkansans, and end the mandate that employers must either provide a certain level of health insurance for their employees or face penalties. A conservative estimate of the financial benefits to individuals and employers from ending these two mandates is $302 million.
“This paper shows that the upside of ending these illegal insurance subsidies almost certainly outweighs any negative effects such a decision would have,” said Dan Greenberg, President of the Advance Arkansas Institute. “If the Supreme Court rules against the federal government in King, Arkansas will likely see vast net benefits from freeing Arkansas employers and employees from the punitive pair of Obamacare mandates.” AAI’s paper also includes information from a recent American Action Forum study, which concludes that the economic growth created by removal of Obamacare’s regulatory shackles would cause 16,000 new jobs to be added to the Arkansas economy two years from now, with an additional 4,000 Arkansas jobs by 2024.
This study does not overlook the hardship that would be caused by the end of health insurance subsidies for the relatively small number of Arkansans who use them. Roughly 2 to 3 percent of Arkansas households would be significantly affected by subsidy loss. The paper does point out, however, that the Obama Administration has various policy measures it could undertake to lower the cost of insurance for this group. For instance, it could allow them to purchase lower-cost comprehensive insurance policies or support an end to Obamacare regulations that have driven up the cost of insurance in the state.
The Advance Arkansas Institute’s newest edition of our Action Plan for Arkansas is now available for download.
Our brand new, 200-page report consists of an extensive conservative legislative agenda. Earlier this year, the General Assembly chose to implement several of our recommendations involving criminal justice reform, the protection of First Amendment rights, and higher education reform.
But there’s still a lot of work to be done: our recommendations cover the fields of property rights protection, health care reform, lawsuit reform, government transparency, and tax reform.
Please let us know what recommendations you’d like to see in future editions of our Action Plan for Arkansas.
If you are in an Arkansas county that allows alcohol sales, don’t go looking for a bottle of Mondavi or Sutter Home wine in your local supermarket. Thanks to state law, even though you may be able to buy a bottle of wine at a grocery in a ‘wet’ county, you are unlikely to find an extensive selection of choices. Wine consumers who want more choices will have to go to a second store. Retailers who want to satisfy consumer demand for one-stop shopping are hobbled by state law that blocks the sale of products from most wineries.
Arkansas law that limits wine choices at groceries therefore makes little sense from a consumer’s perspective. But it also makes little sense for anyone who wants to increase economic growth or state tax revenue. Limiting wine sales at grocery stores in ‘wet’ counties hurts job creation and reduces tax revenue. It also puts the state in the position of denying consumers an amenity that many consider relevant to their quality of life. Finally, it is legitimate to consider the potential costs to taxpayers of a constitutional challenge to this law, given that it seems difficult or impossible to justify.
Arkansas consumers are steadily increasing their purchases of wine. State law should reflect this reality and allow them freedom of choice in wet-county grocery stores. This advancement of economic freedom won’t just benefit consumers – it will also create jobs and grow the state’s tax revenue. It’s a true case of a win-win-win situation. The current state of Arkansas law in this area, as best we can tell, creates no benefit to the public at all – and, from the perspective of foregone tax revenue, it leaves money on the table.
If you're interested in changing this situation, you'll want to look at our new paper, Empowering Consumers: How a Small Change to Wine Regulations Will Create a Favorable Economic Impact for Arkansans. The paper is coauthored by Greg Kaza (Arkansas Policy Foundation) and Dan Greenberg (Advance Arkansas Institute).
Please join us Wednesday, March 11, to hear a talk from Radley Balko of The Washington Post, brought to you by the Advance Arkansas Institute.
When: 6:30 p.m., Wednesday, March 11, 2015. Admission begins 30 minutes prior (6:00 p.m.).
Where: Darragh Center Auditorium, Main Library, Central Arkansas Library System, 100 Rock Street, Little Rock.
Come hear a talk by Radley Balko on the increasing militarization of our police forces. There’s no charge to attend, but (just so we have a head count) we’d be grateful if you’d register here. We look forward to seeing you!
Balko, the author of Rise of the Warrior Cop: The Militarization of America’s Police Forces (2013), is an opinion blogger at the Washington Post, where he writes the popular blog on civil liberties and the criminal justice system, The Watch. Balko’s work on paramilitary raids and the overuse of SWAT teams was featured in the New York Times, has been praised by outlets ranging from Human Events to the Daily Kos, and was cited by Supreme Court Justice Stephen Breyer in his dissent in the case Hudson v. Michigan. Balko is also credited with bringing national attention to the case of Cory Maye, a black man who prior to Balko’s work was on death row in Mississippi for shooting and killing a white police officer during a raid on Maye’s home. (Maye is a free man today.)
Balko’s Reason feature on Maye was also cited in an opinion by the Mississippi State Supreme Court. Balko was formerly a policy analyst with the Cato Institute. He has been a columnist for FoxNews.com, a senior editor at Reason, and has been published in the Wall Street Journal, Playboy, Time, the Washington Post, the Los Angeles Times, Slate, Forbes, ESPN, the National Post, Worth and numerous other publications. Balko has also appeared on the BBC, CNN, CNBC, Fox News Channel, MSNBC and NPR.
(Much of Balko’s biographical information above is taken directly from his biographical website.)
The best way to help Arkansas’s economy grow is through tax reform: policymakers who want to foster economic growth and attract job-creating capital investment should work to lower our income tax rates. Our nation’s experience with the tax reform that President Reagan and a bipartisan Congress produced in 1986 – perhaps the greatest domestic policy achievement of modern times – provides a critical lesson for Arkansas: namely, our state can lower tax rates without decreasing government revenue. The 1986 reforms generally receive bipartisan acclaim because they accomplished more than just lower rates – they led to more jobs, greater prosperity, and increased tax revenue nationally.
The income tax rate reduction that the General Assembly recently passed, prompted by Governor Hutchinson, is an admirable first step towards large-scale tax reform. As the legislative session begins to wind down, lawmakers will doubtless be presented with many opportunities to create small-scale, special- interest tax privileges. We have a better idea: Arkansas policymakers should pursue further income tax reform based on three features of the 1986 federal model: this reform could reduce or eliminate tax giveaways, swap those giveaways for lower rates, and stay revenue-neutral. In the long run, such a reform would likely increase both economic growth and state revenue.
Our newest paper on tax reform, by AAI president Dan Greenberg and UALR law professor Robert Steinbuch, offers a practical, detailed plan about how to lower rates and raise Arkansans standard of living. Click here to read it.
Do we need regulations that accomplish little or nothing -- except to keep people from working? That is the question posed by HB 1158, which provides for a review of occupational regulation that would preserve health and safety rules but clean up state law of so as to rid it of special privileges for special interests. Our newest paper, HB 1158's Promise: More Arkansas Jobs, Lower Arkansas Prices, explains the historic opportunity that the Arkansas General Assembly has to supercharge our state's economy by adding more jobs and economic growth. The bill would create a statutory right to work that aspiring workers and entrepreneurs could use when overreaching regulators called them into court.
Regrettably, Arkansas’s economy has been victimized by excessive and overzealous occupational regulation more than almost any other state in America. In 2012, the Institute for Justice determined that the state of Arkansas has the second most burdensome set of barriers to job entry in the nation and is the fifth most extensively licensed state in the nation. In short, although Arkansas should be a land of opportunity, it is instead a land of licensure.
If you, like us, think that is a dangerous trend, take a look at our newest paper and learn what the General Assembly needs to do to jump-start job growth in Arkansas.
Now it’s time for us to go all PBS on you.
We’ve had a busy and successful year promoting conservative solutions, but we don’t take government grants and we can’t ask George Soros to pay the bills. Instead, we ask our members -- freedom-loving conservatives like you -- to help us out with a donation. If you haven’t already, why not become a member of the Advance Arkansas Institute?
Unlike the other gifts you’ve given this year, your gift to the Advance Arkansas Institute -- which produces this blog -- will be fully tax-deductible.
We so appreciate the gifts of conservatives in Arkansas that allow us to keep our state moving in a conservative direction, and we’re excited about the possibility of greater successes in 2015. Here are some of the Advance Arkansas Institute’s accomplishments over the past 12 months:
During the 2014 session, we worked to research and publicize the dangers of Medicaid expansion in Arkansas, even as other conservative groups stood mute on the biggest expansion of state government in modern history; we collaborated with representatives from the Oklahoma Center for Policy Analysis and the Foundation for Government Accountability to hold a series of town halls across the state about the misnamed “private option.” AAI published several short papers evaluating Medicaid expansion, as well as a longer study: The Cure Is Worse Than the Disease: Why the Private Option Will Hurt, Not Help, Arkansas Hospitals. One Republican legislator who advocated Medicaid expansion circulated a private letter to all 50 of his Republican colleagues, claiming AAI’s study was defective and that Arkansas nonprofit hospitals were “losing BIG money.” AAI responded with a brief report showing that, with the figures that this legislator supplied, simple math demonstrated those hospitals to be reaping, on average, a one percent profit.
AAI and its journalism program, The Arkansas Project, continue to be authoritative sources for facts and statistics. In the state’s recent primary elections, all four candidates in two hotly contested state senate primaries (Phil Grace, Sen. Bruce Holland, Sen. Missy Irvin, and Rep. Terry Rice) relied on our research and our reputation as honest brokers in their public statements or direct mail. Other candidates used our research to demonstrate their conservative bona fides in the recent general election, such as Senator-elect Blake Johnson. The Arkansas Project also broke news regularly; we revealed, for instance, that one northwest Arkansas primary legislative candidate was using a fraudulent college degree as a credential. (Thankfully, that candidate lost.) We coauthored several papers with the Foundation for Government Accountability on Medicaid reform; Institute staff also collaborated with Conduit for Action to produce a voter guide; AAI staff were also frequent radio and television guests.
In the fall, AAI rolled out its iPhone app, which enables observers of the Arkansas legislature to follow developments there at the touch of a button. For each one of Arkansas’s 135 legislators, app users can look up (by name or zip code) nearly 100 votes on different bills during the previous legislative session, the text of those bills, a district map, a personal legislative webpage, and 14 different ratings on legislative performance. For each of those ratings, the app also displays comparative rankings, so that users can see how one legislator compares to others. It also lists the awards that several legislators received for their comparatively superior performance in the previous legislative session. The app uses the data from our biennial Freedom Scorecard, which lists and rates the voting records of all Arkansas General Assembly members. That report, the most thorough of its kind ever produced in Arkansas, gives each legislator a set of vote ratings. In next year’s session, our app will provide users with real-time updates on legislative developments.
The Advance Arkansas Institute continues to be seen as an idea factory for conservatives. Because we have spent significant time building relationships with legislators and other decision-makers, and because of the extraordinary success of conservative candidates during the 2014 elections, we are in a unique position. We intend to be vigorous and effective advocates for a well-researched, intellectually serious, reformist, free-market conservative agenda focusing on health care reform, tax relief, and economic growth. (For more details, see our Action Plan for Arkansas 2014, a 200-page book of policy recommendations which we just published.) We only published the Action Plan a few weeks ago, but we’ve already received requests from legislators to help them draft legislation for the forthcoming session that will realize many of the ideas in the book. Right now, at the request of legislators, our team is drafting plans for tort reform, deregulation, health insurance access, student rights, religious freedom, property rights protection, civil rights, open government records, and protecting the First Amendment.
Because of the power of technology, one of our most important programs is also one of our cheapest. We send out a weekly email newsletter to our supporters, to the news media, and to other think tanks that explains and reproduces the work we do – and we place a premium on having a clean and accessible website that is a repository for all of our research. We regularly receive compliments for the accessibility and transparency of our work. Make sure to let us know if you’d like to be on our weekly email list.
It is because of the support of our friends who love liberty that we are able to advance the values we share. We are very grateful for the support of our members, and we look forward to participating in a 2015 legislative session which advances the values of limited, transparent, and conservative government. Because of the growing impact of conservative ideas and values in our state’s legislature and executive branch, there is every reason to believe that 2015 is going to be a great year.
We respectfully ask you: if you’d like to contribute to the fight for liberty in Arkansas, please donate here.