In less than ten months, fifty different Obamacare exchanges (one per state) will be required to start accepting and processing citizen enrollments in health insurance plans; all insurance coverage must begin on January 1, 2014. Federal law requires each exchange to carry out a costly and difficult mission: the task of building the bureaucratic infrastructure each exchange needs to do its job in the time allotted looks next to impossible. AAI's latest paper, "Why A Federal Exchange Is the Best of the Bad Options that Obamacare Gives to Arkansas," discusses the many unnecessary burdens that Governor Beebe's proposal for a "hybrid" or "partnership" exchange will place on Arkansas, such as its gigantic expense, extraordinary bureaucratic burdens, elimination of political responsibility, and enhanced vulnerability to identity theft.
Two scholars affiliated with the Advance Arkansas Institute presented a research paper to the state legislature's Joint Performance Review Committee yesterday.
The paper, “Are Arkansas Taxpayers Getting Value for Money? The Impact of Arkansas’s Budget Decisions,” was presented by Professors Noel Campbell and David Mitchell of the University of Central Arkansas. The study found, in summary, that Arkansas has a relatively high-taxing, high-spending government compared to our regional neighbors. Further, Arkansas state government spends a relatively high amount on current consumption, and a relatively low amount on investment goods that would lead to economic growth -- and, furthermore, the investment goods state government does fund seem to produce relatively little. These findings suggest that in order to make Arkansas a welcoming place for workers and job growth, we need a state government that taxes its citizens less and spends its revenue differently.
According to the presentation, Little Rock families who make $25,000 pay $3,149 per year in state and local taxes. A working-class family in Little Rock therefore pays $409 more than a similar family in nearby Memphis. A Little Rock family making $50,000 pays $4,053 in taxes, putting Little Rock in the top half of taxing localities for the South Central US.
These higher taxes mean three things:
* Arkansas working families have less money to spend on food, shelter, clothing, and entertainment than their neighbors.
* Working families are less likely to want to settle in Arkansas than in neighboring states.
* Arkansas’s tax and budget policies make its citizens, educated at taxpayer expense, more likely to leave the state.
Another important finding from the presentation is that every $1 of revenue taken in by the state costs $2.65. So it is imperative that state government exercises extreme caution and restraint when deciding to pull dollars out of the private sector.
You can read the paper, Are Arkansas Taxpayers Getting Value for Money? -- or, if you're in a hurry, you can read the three executive summaries of three of the paper's most important points below.
Today, we release Arkansas’s Freedom Scorecard. The Scorecard provides numerical ratings to each Arkansas legislator in the 88th General Assembly based on votes in six categories: economic freedom, education reform, good government, personal liberty, small government, and tax/budget policy.
The Scorecard also designates approximately the top quarter of legislators in both chambers, as measured by their overall score, as “Friends of Freedom.” We congratulate Rep. Duncan Baird and Rep. Charlie Collins, who tied for the top score in House, as well as Sen. Gilbert Baker, the top scorer in the Senate. (The scores in the two different chambers are not meaningfully comparable against one another.)
The report is not an effort to endorse or condemn any legislator, but to show the public how legislators voted on the values that the Institute seeks to advance. Our ratings demonstrate how the voting records of some legislators advanced freedom and good government, while the votes of others stood in the way of writing those values into law.
The guide does not attempt to label any legislative outcome as “good” or “bad,” but simply measures how well each legislator's voting record reflects the values of free markets, lower taxes, individual responsibility, and limited, transparent, and efficient government. Each reader of the report can decide how important these values are for himself or herself.
To see who's a "Friend of Freedom"; to compare several legislators against each other; to see how your legislator did; or to read information about individual voting records, see the full report here.
Arkansas Medicaid costs are reaching a tipping point, with a major funding shortfall projected in the very near future. Lawmakers seeking to reform the system should look to Florida, where a Medicaid reform pilot program has created impressive results in cost savings and improved health outcomes.
In Arkansas, state officials now predict a Medicaid shortfall of around $300 million in FY 2014, which begins a little more than a year from today. As Senator Jonathan Dismang noted in a March 5 Arkansas News Bureau interview, the 2013 legislative session may “set down a $250 million to $400 million bill on the desks of new members and tell them to ‘See what you can figure out.’ ”
In this climate of strained government budgets, lawmakers should pay special attention to Florida’s record of success in controlling Medicaid costs: the Sunshine State has made tremendous strides in reforming Medicaid in recent years to make the program both less expensive and more responsive to client needs.
For more information about Florida's reforms, check out our latest policy paper.
How can Arkansas state legislators force Congress to hold back on federal debt limit increases? Our newest paper argues that Arkansas state legislators can have a beneficial impact on Congress by proposing changes to our federal Constitution.
In Arkansas, State Senator Jason Rapert has recently introduced SJR 1, the National Debt Relief Amendment. This resolution is a call for a convention, under Article V of the federal Constitution, to consider a federal constitutional amendment – one that would block any increase in the federal debt unless that increase had been approved by a majority of state legislatures. Two-thirds of the states must call for a convention in order to trigger Article V: two other states have already passed similar resolutions, and so the passage of this resolution by 31 more states would trigger an Article V convention (also known as an "amendments convention‟).
The NDRA proposal raises many questions of policy and law. Some constitutional experts argue that an Article V convention might become a “runaway convention” that could ultimately create major changes in the Constitution, while other experts argue that this could never happen. But a few indisputable facts are worth noting.
Read our full report here.
The goal of the leadership in the House and the Senate, as well as the goal of Gov. Mike Beebe, is to write their own political preferences into law. Only one impediment stands in the way of this goal: the leadership must convince a majority of legislators — usually 75 percent in both houses — to go along with them.
When public officials make mistakes, they deserve criticism. When public officials do the right thing, they deserve praise. Arkansas Attorney General Dustin McDaniel did the right thing recently, when he announced a revised policy on the distribution of class action settlement funds. It’s a move that deserves commendation.
Let’s back up: This summer, McDaniel came under criticism, from this site and other media outlets, for directing funds awarded to the state from class action settlements toward charitable organizations—a practice that, many have noticed, seemed geared more toward McDaniel’s political interests than the public interest. In addition, the practice (which, to be fair, has been exercised by previous holders of the office) is arguably unconstitutional.
This month, McDaniel revised his office policy on settlement funds, effectively ending the practice of directing those funds to charities chosen by the attorney general. McDaniel’s new policy means that, in a matter of months, the state of Arkansas should ultimately have something like an extra $7 million dollars available in its budget.
For a more detailed exploration of this new policy, you can read the latest paper from the Advance Arkansas Institute (PDF). For a look at the original policy memo distributed by the AG’s office on October 11, click here (also PDF).
I can only hope that our legislators will do the right thing and dedicate these new funds not to additional state spending, but toward growth-oriented tax relief for Arkansas taxpayers. Regardless, McDaniel’s adjusting course on how legal settlement funds are handled is welcome news, and he deserves credit for making his office more accountable to the legislature and to the public.
(Cross-posted at our affiliate site, The Arkansas Project.)
I should have said above: without the efforts of state Rep. Jane English, who unsuccessfully tried to push a law through the legislature earlier this year that would have required legislative authorization of settlement fund spending, I don't know that this ever would have happened. For a lengthier description of the previous status quo, see http://www.advancearkansas.org/advance-arkansas-institute/2011/6/10/why-is-our-attorney-general-ignoring-the-law.html below.
Earlier this week, Republican legislators were asked by state Insurance Commissioner Jay Bradford to support the establishment of a state health insurance exchange; yesterday, as detailed in this excellent story by John Lyon, they turned him down.
You can read commentary at our sister site, The Arkansas Project, from David Kinkade about what Bradford’s initial request was, why it was a Trojan horse, and how Republicans reacted to it. You can also read my post over there about how committee chairman Mike Patterson did his best to block the distribution of the latest AAI report to lawmakers. By the way, about that report -- you should read it.
You should read it because the state’s political and media establishment seem convinced that unless we establish a state health insurance exchange immediately, we will have a federal exchange imposed on us shortly. There are plenty of reasons to believe that it ain’t necessarily so.