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Pre-K and taxes define race for governor

Ross, Hutchinson disagree over what state can afford.


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SEEING IT DIFFERENTLY : Mike Ross (left) and Asa Hutchinson image
  • SEEING IT DIFFERENTLY : Mike Ross (left) and Asa Hutchinson.

After four debates, endless ads and an avalanche of press releases, we now know at least this much about the gubernatorial candidates' positions on education: Democrat Mike Ross has a plan to offer pre-K to more Arkansas families; Republican Asa Hutchinson thinks it's fiscally irresponsible.

As far as the other big education issues of the day go, read the two candidates' websites side by side and you'll be hard- pressed to find major differences. Where there's daylight between their stated positions, pre-K aside, it's more a matter of tone and emphasis than of substance. Ross provides more prescriptive details than his opponent and is willing to take somewhat more decisive stands, but given the degree to which Hutchinson has sidestepped tough policy issues in this race — on the private option, on the minimum wage — that may be faint praise.

Both are big fans of improving workforce education, a worthy goal with little political risk. In their final televised debate, both said they'd like to see legislation to scale back the Huckabee-era school consolidation law that requires districts with fewer than 350 students to merge with a neighbor. And both are agnostic on the politically treacherous issue of Common Core, the new set of math and literacy standards that have become a lightning rod for Tea Party conservatives and some teachers alike.

Similarly, neither Ross nor Hutchinson is in any hurry to talk specifics on fixing the teacher insurance plan, which is probably the most immediately dysfunctional component in the vast machinery of Arkansas's K-12 school system. Public school employee premiums have become exorbitantly high, and there's no clear fix outside of a massive new commitment of state revenue. Both candidates have said the problem needs to be addressed, while avoiding any details.

Yet despite such nonproposals, there are still two education issues that starkly separate the Democrat from the Republican in this race: pre-K and tax policy.

On pre-K

"Pre-K is one of the best things we've ever done," Gov. Mike Beebe told the Arkansas Times in a conversation about the education issues facing his successor. Pre-K is most important to children from lower-income households, said the outgoing governor, since they're disproportionately more likely to enter school underprepared.

"Sometimes they come from one-parent homes and one parent's working their tail off, doesn't have the time or ability to spend a lot of time [with the child]. Sometimes they're coming from homes where nobody can do that, either because they don't want to or they're not prepared. So that group of students, they're starting way, way behind. ... And it's all cumulative — if you finish first grade at a lower end spot, you end up in a lower starting spot in second grade."

Despite that convincing argument, the state's pre-K program, Arkansas Better Chance (ABC), has been chronically underfunded throughout most of Beebe's tenure in office. The last time it received an increase in funds to keep pace with inflation was back in 2007, during his first year as governor. In Beebe's defense, the recession constrained every part of the state budget in the years that followed, and other states with worse budget holes had to cut pre-K spending; Arkansas did not. Nonetheless, flat funding has prevented ABC from serving all the children eligible for assistance: 3- and 4-year-olds from households below 200 percent of the poverty line. (That's around $48,000 for a family of four.)

ABC and the federal pre-K program, Head Start, currently have slots for only about 80 percent of eligible 4-year-olds and 47 percent of the state's eligible 3-year-olds, creating waiting lists in many towns across Arkansas. The shortfall in funds has reached the point where ABC providers are now up against a wall. If a cost-of-living increase isn't provided, they'll have to either cut back ABC enrollment numbers or reduce the quality of the existing program.

Ross, who has said he wants to be "the education governor," has made ABC the cornerstone of his vision for improving Arkansas schools. He wants to add $3.8 million to ABC to partially make up for the damage done by years of flat funding, but he also insists on broadening eligibility to eventually cover all 4-year-olds in the state.

"I propose doing it as we can afford it. As we have revenue growth, and we always do, we would begin to implement my plan," Ross said. "Step 1 is to fully fund the existing program. Step 2 is to increase access from those who live at 200 percent of poverty to 300 percent of poverty. And step 3 is that those from 300 to 400 percent would pay half price." Families above 400 percent would pay the full cost of the program, but Ross said they'd benefit as well. "It would be comparable to what they're paying for day care now, but they'd be getting their child enrolled in a quality pre-K program."

Hutchinson agreed that pre-K needs more funding, but balks at including families further up the income ladder, an expansion that he says the state can't afford.

"We need to fully fund our current program before we expand eligibility for additional students," Hutchinson said. "Pre-K is a valuable tool for preparing students for school and I support providing assistance for those who need it the most." Hutchinson's website calls the Ross plan "a classic example of over promising in an election year" and adds "we should not be promising to create a bigger government program when we haven't met our current needs."

Indeed, at first glance, the thought of subsidizing pre-K for those at 300 percent of the poverty line (about $72,000 for a family of four) might seem questionable — until one remembers that public schools, using taxpayer dollars, provide an education to every child regardless of family income.

"We can do the whole thing for $35, $38 million, and we always have more than that in revenue growth," Ross countered, "[and] for every dollar that we put into pre-K, we get about 10 dollars back. If you go to pre-K you're more likely to finish high school, to go to college, to be employed as an adult. You're less likely to be on government assistance and 80 percent less likely to end up in prison."

On taxes

But pre-K, like every other public education program, is paid for by taxes — which is why the most important education issue of the race for governor is ultimately the candidates' competing income tax plans. Hutchinson wants to reduce Arkansas's income tax rates for those earning over $20,000, a plan that he says will cost the state $50 million in its first year and $100 million thereafter. Ross wants to phase in a gradual adjustment to the state's tax brackets, which would eventually result in a net reduction of income tax for all but the top 15 percent of earners. Because he wants tax cuts to be performed only in proportion to natural revenue growth, Ross doesn't provide a timeline for implementation.

Hutchinson has criticized Ross' tax proposal as being too vague; Ross says Hutchinson's dramatic cuts to revenue are fiscally irresponsible. It's the mirror image of their positions on pre-K, and it illustrates the fact that — for all the cautious hedging of these campaigns — there really is a difference between the two candidates. At the core, the decision between Ross and Hutchinson comes down to whether cutting taxes should take priority over providing better public education.

The tax cut question is compounded by the fact that state revenue has already been diminished recently. In 2013, as part of a compromise over the private option Medicaid expansion, Gov. Beebe agreed to a package of tax cuts proposed by the Republican-controlled legislature. Those cuts, which are still being phased in, will reduce state revenue by about $150 million by fiscal year 2016 (FY 2016 begins next summer).

As the legislature holds budget hearings this fall in preparation for the 2015 session, state lawmakers are now facing the constraints imposed by the 2013 cuts. Plans to build a new prison are being called into question. Beebe, who knows the Arkansas budget better than almost anyone thanks to long years spent in the state Senate, was quoted in early October in the Arkansas Democrat-Gazette as saying, "If they don't delay [the cuts], they've got a huge hole in the budget and serious, serious problems."

Meanwhile, the state's public education costs are expected to grow between $35 million and $65 million this year, largely a product of the natural growth of schools. Because of the state's constitutional requirement to fund its full K-12 budget before anything else, Beebe told the Times, other spending is even further constrained. In the Lake View school decision a decade ago, the Arkansas Supreme Court mandated the legislature to set aside the money necessary to provide an "adequate" K-12 education for all children before funding any other state agency.

"What it does is it creates budgetary concerns on everything else, because everything else comes after the allocation of funds for adequacy," he said. "Colleges. Nursing homes. Prisons. Health Department, cities and counties, state police, National Guard — you just go up and down the line. ... K-12 takes roughly half the budget, so that means if there's cuts, 100 percent of the cuts come from the other half of the budget."

Higher education is not included in adequacy, however, nor is pre-K, nor (oddly) teacher insurance. If the 2013 tax cuts proceed as planned, and if a Hutchinson administration proceeds with another round, will pre-K really get its long-promised cost-of-living increase? Or will it — along with other education funding not mandated by adequacy — have to pay for the cost of more tax cuts?

Funding for education reporting provided by the Arkansas Public Policy Panel.


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