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Sales Tax Is Off Special-Session Agenda in Arkansas

By Reagan Walker — October 25, 1989 5 min read

Arkansas legislators were scheduled to meet this week in special session to consider a crowded agenda from which one key item was conspicuously absent--a sales-tax increase to fund teacher pay raises and other educational improvements.

Gov. Bill Clinton, who issued a formal call for the session last week, did not renew his earlier proposal for a tax increase for the schools. The reason, he said, was that he saw little chance that the legislature would approve the idea.

Mr. Clinton had recommended a sales-tax increase for teacher pay in the regular legislative session this year, but the proposal was defeated.

Arkansas currently ranks last in the nation in average teacher pay.

In a speech last week to the Arkansas Association of School Administrators, Mr. Clinton asked educators to be patient until anti-tax sentiment among Arkansas voters subsides.

He cited two factors for the opposition to new funding for education in the state--President Bush’s “no new taxes” pledge and the cost of the Pulaski County (Little Rock) school-desegregation settlement.

That settlement could cost the state between $118 million and $130 million over the next 10 years, officials have estimated.

Although he will not seek a sales-tax increase, the Governor said he will ask the legislature to dedicate any unanticipated growth in state revenues to education. Such funds should be used, he said, for creation of an office of accountability, compensatory-education programs, and a proposal to allow high-school students enrolled in college courses to get both high-school and college credit.

In the absence of debate on a sales-tax increase, much of the legislature’s focus will be on drug programs. In his call to the special session, Mr. Clinton asked lawmakers to consider 22 items addressing the state’s drug problems, including stiffening criminal penalities, increasing funds for drug treatment, and financing “boot camp” prisons for young offenders.

To fund the drug programs, Mr. Clinton proposed that a flat incometax rate of 7 percent be levied on individuals, trusts, and estates with earnings exceeding $100,000 a year. He also suggested increases in taxes on liquor, cigarettes, and other tobacco products, but did not specify by how much.

Aides to the Governor estimate the revenue package will raise more than $15 million.

Like a number of other states this year, lawmakers also will consider changes in pension laws in the wake of a U.S. Supreme Court decision requiring similar tax treatment of income from federal and state pensions. Arkansas currently exempts from taxation all pension income of former state employees, but only $6,000 a year of the pension income of former federal employees.

Meanwhile, legislatures in several other states appear headed for special sessions that could have a significant impact on education.

Oklahoma: Taxes and Reform

The Oklahoma legislature is expected to reconvene Nov. 6 to consider changes in the state’s education-finance system.

In August, lawmakers overwhelmingly rejected Gov. Henry Bellmon’s plan for imposing a 1.9 percent “school tax” on goods and services to replace districts’ property-tax revenues. (See Education Week, Sept. 6, 1989.)

In rejecting the Governor’s proposal, legislators made clear they would not support a tax increase without school reforms. The legislature agreed to return next month to consider recommendations from Task Force 2000, a panel authorized last session to develop a revenue and reform package.

George Singer, a Tulsa oilman, is chairman of the task force, which also includes the secretary of education, state superintendent, chancellor of higher education, and director of vocational-technical education.

The panel was scheduled to unveil a preliminary version of its report late last week, with a final version to be released Oct. 27.

A key issue facing lawmakers will be the fiscal problems that have hit education in the wake of the collapse of the Oklahoma oil industry in the early 1980’s. The state, which once ranked near the national average in terms of teacher salaries and per-pupil spending, has fallen to 48th in wages and 46th in expenditures.

Mississippi: Major Changes

In Mississippi, Gov. Ray Mabus is expected this week to release a major package of education reforms.

The legislative proposals will call for a “bottom-to-top revision of Mississippi education,” according to Kevin Vandenbrock, a spokesman for the Governor.

Mr. Mabus is said to be considering calling a special session to deal with his education initiatives sometime between Thanksgiving and Christmas.

The proposals, Mr. Vandenbrock explained, build upon the goals spelled out by the Governor in August in his “Better Education for Success Tomorrow,” or best, program.

That program seeks improvements in seven broad areas: student assessment; early-childhood preparation; international competitiveness in academic achievement; reduction of dropout rates; adult literacy; teenage-pregnancy prevention; and higher education.

Arizona: Looming Deficit

Another special session may come in Arizona, where officials are grappling with the implications of a recent report predicting that the state may face an annual budget deficit of up to $1 billion by the year 2000.

The report, released last month, called on legislators to reorder parts of the state’s education-finance system as a part of a larger effort to cut the projected fiscal shortfall. (See Education Week, Sept. 27, 1989.)

Gov. Rose Mofford has not embraced any of the proposals in the report, according to her spokesman, Vada O. Manager.

But, the spokesman added, Ms. Mofford is thinking about calling a special session before the end of the year to deal with issues it raised.

Among the report’s many recommendations are several significant changes in the way the state funds education. They include elimination of the homeowner’s rebate, which reduces property taxes by an average of 56 percent; evaluation of the state’s equalization formula on a regular basis; and establishment of a minimum school-tax rate applicable to all private property in the state.

Florida: Driver-Dropout Costs

Finally, Florida legislators--who rejected proposals by Gov. Bob Martinez to curb abortion in a controversial special session this month--are scheduled to return next month to focus on transportation and child-abuse issues.

But Commissioner of Education Betty Castor wants legislators also to consider the costs of the bill they passed last spring to deny drivers’ licenses to dropouts under age 18.

Ms. Castor last month estimated that it will cost school districts in the state $5.8 million to implement the various services mandated by the law, such as student counseling, attendance assistants, and due-process hearings.

“I do not believe the districts should carry the burden of this law without financial assistance,” she said in urging the legislature to appropriate the additional funds for districts.

Staff Writer Michael Newman contributed to this article.

A version of this article appeared in the October 25, 1989 edition of Education Week as Sales Tax Is Off Special-Session Agenda in Arkansas


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