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Editor/Founder: Bill Smith, Ph.D. [aka: OzarkGuru & 2010 AFP National Blogger of the Year]
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One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors. -- Plato (429-347 BC)

Monday, June 05, 2017

Arkansas Has A Spending Problem

On Sept 14-16, 2010, concerned citizens joined in  an
Arkansas Spending Revolt Tour
Big Spending Democrats were in charge.  One of the
speakers was David Crow.  Now,almost 7 year later,
Republicans control Arkansas Government. But
spending remains out of control. ~ Dr. Bill Smith, Editor
by David Crow: About a month ago, I heard a TV interview where State Sen. Dismang, following the general session, commented that “Arkansas did not have a spending problem, it had a revenue problem.”  A few days later, I heard Governor Hutchinson say the same thing in a radio interview.  My immediate thought was, "no way, he did not say that."  This was very confusing because I thought all along we were over taxed and they were trying to reforming our tax structure and hopefully cut spending!  Well, I decided to do a little research and here is some of what I found.

In 2015, the most recent financial reporting* says AR spent $23.6 billion in tax dollars. That is $7,935per capita vs. contiguous states that spent on average $5,456 per capita. In other words, we spent 45.4% more than the average of OK, MO, TN, MS, LA and TX. When compared to the total US states average of $5,711 per capita, I found that AR spent 38.9% more than the total US average.

Later, I shared these numbers at a meeting.  I was asked by a state representative who attended to remove Texas from totals of contiguous states due to its large population and the impact it might have on the numbers. After removing Texas, I found that Arkansas spent 38.5% more than the other 5 remaining contiguous states.

In addition, he asked that I compare Arkansas with all states in US whose population was similar to Arkansas.  So, it was determined we would compare Arkansas to those states whose population was plus or minus 1 million of Arkansas. The states were, Oklahoma, Utah, Connecticut, Iowa, Kansas, Mississippi, and Nevada Their average spending was $5,770 per capita.   The result was that Arkansas spent 37.5% more than states with comparable populations.

Arkansas total spending in 2015 was $23.6 billion (state and federal tax dollars) therefore, if Arkansas legislators and the Governor were to reduce spending by the 37.5% (the average of comparable states) we would save $8.8 billion -- a really "big" number!

I have always felt that Arkansas state government was a bit oversized having watched it grow so much over the years. As a matter of fact, it was a bit bloated. I think a good place to start looking for cost savings would be employment. In 2015, there were 63,297 full time equivalent employees** in state government. The state of Arkansas employs 213.3 people per 10,000.

However, if we exclude employees who are part of education, that  leaves a result of 122 people per 10,000 in population for a  total of 35,895 employees. The average employment, excluding education workforce, in surrounding states was 87.81 per 10,000 in the population. That means Arkansas employs 38.9% more people in comparable jobs than the average by surrounding states.

Result: 35,895 employees x 38.9% is 13,963 excess employees.No doubt Arkansas has a bloated government; it  requiring excess taxes and spending to compensate excess employees.If we assume the average state employee pay, benefits and tax = $50,000, then
13,963 x $50,000 = $698,158,000 potential savings annually.
It is evident that Arkansas has been and continues to be on a spending binge which no doubt makes it very difficult to reduce taxes on Arkansas citizens and businesses. With Governor Hutchinson and legislative leadership of Sen. Dismang and House Speaker Gilliam having increased spending 3% in each of the past three legislative sessions, regretfully there seems to be little chance we can expect any effort on their part to cut spending.

Then when  coupled with their effort in the last session to also increases taxes by approximately $400 million,  I don’t hold out much hope that we will see significant reform.

In summary: Arkansas doesn't have a revenue problem, it has a spending problem!

* – data provided by NASBO – National Association of State Budget Officers

David Crow is Chairman Faulkner County Arkansas Tea Party.

Tags: Arkansas, government, spending, David Crow, Faulkner County Tea Party To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service and "Like" Facebook Page - Thanks!
Posted by Bill Smith at 12:00 PM - Post Link


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