Like most states, this year Arkansas faced a budget shortfall, yet there was enough money from previous surplus years to make balancing the budget much less painful than in most places. The majority of the noted [1] achievements [2] relate to taxing and budgeting, though some important gains were made in other areas, principally in education and health care. However, the majority of progressive gains were incremental.
Tax and Budget: The state's $4.5 billion spending plan for the upcoming year was balanced [3] with $100 million from the state's surplus funds. Additionally, taxes were raised on tobacco products. At the same time the sales tax on groceries was cut by a third and the tax on manufacturer's utility bills was cut three-fourths of a percent. The governor has warned [4] that next year hard choices will have to be made to keep the budget in balance.
- 56-cent Tobacco Tax Increase: The state is raising the tax on cigarettes and other tobacco products to raise $72 million to fund health care improvements, including a statewide trauma system, an increase of substance-abuse treatment, expanded access to children's health insurance, and support for community health centers. Arkansas is one of only a few states that lack a statewide health system; the state also lacks a level one trauma center.
- Sales Tax Decreases: Lawmakers reduced the state sales tax on groceries by a penny (from three cents) and on manufacturers’ utilities by three-fourths of a cent. The state also passed an exemption for raw products sold at farmers' markets from state sales tax. Back-to-school sales tax holiday killed in House committee.
- Lottery Board Established: After a voter referendum was passed last year establishing a state lottery with proceeds going to college scholarships, legislators created a nine-member board to operate lottery games under legislative oversight, established a sliding scale to fund scholarships according to lottery revenues, revamped the scholarship application process, and set criteria students must meet to qualify for the awards.
- State Unemployment Law Changed: Unemployment rules were changed so the state can qualify for $59 million in federal stimulus funds to support out-of-worker Arkansans.
- Economic Development Incentives: The state authorized a 15% rebate on production expenses of at least $50,000 for film and TV production. Meanwhile, a bill to grant 20% tax credits on construction and renovation in downtown business improvement districts was defeated in the Senate and opposed by the Governor because of the estimated $10 million cost.
- Capital Gains Tax Cuts Defeated: The House passed a bill to cut $42 million in capital gains taxes that died in the Senate after the Governor's office intervened.
Health Care:
- Assist Teachers with Insurance Premiums: Legislation was passed to cover $15 million of increases in insurance premiums for school teachers.
- Children's Health Insurance Expanded: The eligibility for the ARKids First children's health insurance program was expanded to include families making up to 250 percent of the federal poverty line.
- Campus Smoking Bans: Smoking on state-supported college and university campuses will be prohibited beginning on Aug. 1.
Reproductive Rights: Reproductive freedom suffered significant losses this session with the passage of a ban on "late term abortions" for women, even those suffering significant health risks from birth. As well, an Emergency Contraception bill by Sen. Joyce Elliot [5] to require health care providers to offer emergency contraception to rape survivors was sidelined by conservative groups like the Arkansas Family Council.
Criminal Justice: The state saw some encouraging reforms and movement on criminal justice issues, as well as a big step back for genetic privacy:
- DNA Databank Expansion: Expanding DNA collection beyond those that have been convicted or even officially charged with a crime, Arkansas will now begin collecting DNA from individuals merely arrested on suspicion of capital murder, first-degree murder, kidnapping and sexual assault in the first and second degree. As noted in a recent Congressional Research Service report [6], and highlighted in a New York Times article [7], expanding DNA collection to those not even charged with a crime raises serious Fourth Amendment concerns and is a step only a few states have ventured to take given the real possibility of a successful court challenge.
- Drug Court Expansion: Funding was directed for the positions needed to start 10 juvenile drug courts throughout the state. Additionally, $1.5 million in cuts for adult drug courts were replaced with money from the tobacco settlement. The bills' sponsor, Sen. Bill Pritchard [8], indicated [9] that there are 1,800 people in adult drug court treatment instead of in jail and they are functioning members of their families and society.
- Protecting Children: $15 million in additional funding for the Division of Children and Family Services will go to hire an additional 100 workers. The dollars are targeted to child abuse prevention.
- Prisoner Re-entry: The Senate unanimously passed a bill to study prisoner reentry policies, but it died in the House [10] 42-31. This was another bill sponsored by Sen. Elliot that addresses a critical issue. The tremendous need for better re-entry policies is being recognized nationwide, and the benefits of model policies [11] include significant budget savings as well as improved outcomes for released prisoners.
Education: Arkansas has been working to improve its education system for many years after the state Supreme Court ruled that the state was not living up to its constitutional obligation to provide an adequate education to Arkansas students. This year the state passed several additional reforms [12]:
- SB 889 [13] strengthens monitoring of school poverty funding.
- HB 2164 [14] reforms the Commission on Closing the Achievement Gap.
- SB 943 [15] expands access to school performance and improvement data.
- HB 2163 [16] allows the Arkansas Department of Education to intervene in under-performing school districts faster.
Environment and Clean Energy: However, as Rep. Kathy Webb [17] put it, "I think that the utilities put every single thing they had into fighting [commission recommendations]" and all but one major initiative failed to pass. [18]
- The failed measures included two key recommendations: HB 1903 [19] to established an energy savings goal for utilities and a Renewable Energy Portfolio, HB 1851 [20], which would have required electric utilities to purchase some energy from renewable sources.
- One measure recommended by the Global Warming Commission that did pass is HB 1663 [21] by Webb, which calls for [22] a 20 percent reduction in energy use in state buildings by 2014 and a 30 percent reduction by 2017.
- Lawmakers also passed bills to extend a legislative task force on sustainable building design and practices (SB 440 [23]); create a design program for sustainable buildings (SB 746 [24], SB 747 [25], SB 921 [26]); create an alternative energy commission (HB 1796 [27]); and license electric autocycles for street use (HB 1902 [28]).
- A new tax credit was created for people who provide a conservation easement (HB 1577 [29]). It is aimed at protecting wetland and riparian areas around streams that are a critical habitat for many species. The bill received the backing of 30 to 35 environmental entities and passed out of both chambers without a dissenting vote.
Good Government Reforms:
- National Popular Vote: The House passed the National Popular Vote Compact [30], but action was not taken in the Senate.
- Political Advertisements: HB 1019 [31] requires disclosure of the sponsor of paid broadcast political electioneering advertisements.
- Lobbyist Meal Restriction: Legislation will bans lobbyists from paying for lawmakers' meals or drinks when the lobbyists are not actually present.
Immigration: HB 799 [32] to allow undocumented graduates from an Arkansas high school to pay in-state tuition at public colleges in the state did not pass the Senate, and was recommended for study in the Interim Committee on Education at the end of the session. It was not introduced in the House. Unfortunately, HB 1860 [33] , which shortens the period that drivers licenses for immigrants are valid, was signed and enacted.
Other Legislation of Note:
- Foster Care Transitional Planning: SB 359 [34], by Sen. Sue Madison [35], provides that every child transitioning from foster care due to reaching maturity shall be "provided the opportunity to be actively engaged in the planning of his or her future." The bill details a number of requirements for the state in helping foster children obtain health care, housing, employment and additional education; as well as providing them with records held by the state and essential documents such as birth certificates and social security cards.
- Tax Refund Loans: HB 2203 [36] requires anyone offering so-called “advances” on tax refunds to disclose to the customer any fees that apply, and that the customer is receiving a short-term loan and may have to pay extra fees if the refund is late. The law also prohibits certain practices, such as requiring a consumer to enter into a loan agreement in order to complete a tax return.
- Consumer Report Credit Freeze: HB 1037 [37] authorized a consumer to freeze their credit report in the event of identity theft.
With a relatively productive session, lawmakers in Arkansas are feeling positive about their work this year. Usually they wouldn't return to session until 2011, but a 2008 constitutional amendment requires the Legislature to hold a fiscal session in even-numbered years, the first of which will convene next February under rules adopted this year. Before leaving for the year senators elected Sen. Paul Bookout [38], as Senate president pro tem for the 2011 session. Legislators also gained some notoriety this session [39] for their expanded use of digital communications.