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"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness."

The Declaration of Independence


How Freedom Of Choice Improves Public Health In Arkansas

Nicotine consumption used to be simple. Those who wanted to smoke tobacco grabbed a cigarette, or maybe a cigar or pipe, and lit up. Today that seems so old-fashioned. We now have electronic devices that provide nicotine in a form that resembles smoking -- but lacks many of smoking’s negative side effects. Many people are turning to e-cigarettes or other devices to “vape” instead of smoking traditional cigarettes. This has drawn the attention of legislators across the nation (and the world).

Many proposals to regulate vaping or e-cigarette usage are unnecessary or counter-productive from a public health standpoint. Regulating vaping or e-cigarettes the same way we regulate tobacco will hurt individuals who want to quit smoking. Arkansas legislators recognized this fact earlier this year when they instituted a modest, well-crafted regulatory regime for vaping products and e-cigarettes. Policymakers across the U.S. should learn from the Arkansas reforms that were passed in 2015 and use them as a model for regulating these devices in their states.

 Marc Kilmer’s new paper for the Advance Arkansas Institute explains a paradox: namely, because the consumption of nicotine by means of vaping or e-cigarettes doesn’t carry with it the same kind of health risks as smoking tobacco does, it is arguably a public health solution in some respects, rather than a public health problem. We hope policymakers and citizens will read and learn from Marc’s newest paper.


The Hidden Costs of Federal Grants

Is there ever a good reason for state governments to refuse federal grants? Some people would say no; notoriously, a few years ago. Gov. Mike Beebe said that accepting Medicaid expansion money was a “no-brainer,” because whether Arkansas accepted the money or not, state taxpayers would still be on the hook for it.

A new paper by the Advance Arkansas Institute’s Marc Kilmer, however, suggests that there are plenty of good reasons to refuse federal grants. Perhaps the best reason is political scientist Eric Fruits’s new research, which demonstrates that every dollar Arkansas gets in grants leads to 59 cents in additional taxes, charges, and other revenue. In “How Federal Grants Increase Arkansas Taxes,” Kilmer shows that the costs to Arkansans of receiving federal grants are often much higher – and the benefits much lower – than commonly realized.

Here’s the paper.


The Folly of Film Subsidies in Arkansas

film subsidies-01Of 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.


How the Supreme Court Advanced Freedom in Arkansas

scotus-01Earlier 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.


Hutchinson, Sanders, and AAI on Obamacare Exchanges


hutchinson sanders obamacare-01

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.


Our Action Plan for Arkansas

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.


It's Time for "Wine Freedom" in 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).



Come hear Radley Balko speak this Wednesday!

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, a senior editor at Reason, and has been published in the Wall Street Journal, Playboy, Time, the Washington Post, the Los Angeles TimesSlateForbes, 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.)


Practical Tax Reform For Arkansas

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.