Gov. Mike Beebe has struck a deal with the House on tax-cut plans. The broad outline:
1) The three-cent reduction in the sales tax on food will pass the House.
2) There will be a tax cut for people at the lower end of the income scale. It will cost $16 million a year to guarantee a state income tax exemption for all workers at or below the poverty line. (I don't have that figure at the moment.)
3) Manufacturers will get more of a reduction in the sales tax on energy use, but not the whole enchilada sought in a bill filed on the subject. Beebe had proposed a one-cent reduction in the six-cent rate, at a cost of $10 million a year. They'll get 1.5 percent the first year of the budget cycle and 2 percent off the second year, for an additional cost of $15 million over two years.
I have a question that arose among other legislators this morning. Beebe has not yet firmly committed to a budget for education. Can taxes be cut safely now without a firm education figure in mind, in addition to some idea about how the Supreme Court's special masters might view that figure? And, if the tax cuts imperil the education budget, what other state service might have to give a bit to satisfy that pressing issue? I'm promised a comeback on this questioin before long. UPDATE: Beebe's folks insist the education budget is firm (though there's some uncertainly about construction spending, which is anticipated to come from the surplus) and that money exists from a variety of sources, including some unspent Medicaid money to make up additional tax cuts announced in the agreement today.
The governor is about to convene a press conference on good news on the education front, a healthy increase in scores on Advanced Placement tests. That's good news indeed, since the number of students taking the tests has grown sharply beyond a limited pool of mostly high achieving students.
The tax news, I presume, means the death of some not-so-hot ideas in the House, like a $75-per-dependent income tax deduction and an increase in tax exemption for retirees. That diesel tax giveaway ought to get a good hard look at the death sentence, too.
News release on AP scores on the jump.
MIKE BEEBE NEWS RELEASE
Study results announced this morning by the College Board show Arkansas leading the nation in increasing student achievement on Advanced Placement (AP) exams during the past year. The study highlights Arkansas as a national model for its legislation requiring all high schools to offer AP exams and requiring the state to pay for students to take those exams.
“These are the kinds of educational dividends we have been waiting to see after our state’s unprecedented investment in education over the past three years,” Governor Mike Beebe said. “We strive to provide excellence in education for our children and this study shows that Arkansas is becoming a state that people will look to for educational innovation and say ‘We want to do what they’ve done in Arkansas.’”
The study states that Arkansas is tied with New Hampshire for the greatest one-year increase in AP grades of three or greater. In 2006, Arkansas produced 6,868 students who scored in that range on AP exams, compared with 6,012 in 2005. Overall, the state saw a 14-percent increase in the number of students taking AP courses. Arkansas’ public-school graduating class of 2006 is above the national average for taking AP exams, with more than 30 percent of the class taking the tests. The national average is approximately 24 percent.
“Once again, Arkansas is being spotlighted as an innovative leader in public education,” said Commissioner of Education Ken James. “In fact, when the College Board representative first told us about the state being named a national model, she said she felt like Santa Claus delivering gifts – except that Santa delivers gifts without them being earned.” She told the commissioner that Arkansas definitely deserves this notable distinction. “I second that sentiment,” James stated. “Every student who participated in an AP exam, every teacher who trained to teach AP level courses and every administrator who has worked to make AP a successful element in the high school curriculum has earned this recognition for our state.”
Since 2001, overall Arkansas participation in AP exams has increased by 312 percent. Advanced Placement results are measured on a scale of one to five, with five being equivalent to “A”-level work in comparable college courses.