Sunday, March 29, 2009

What Took You So Long: Ledge Doubts Beebe's Numbers

At long last I read a report that some lawmakers are beginning to question the Beebe administration's budget numbers. What finally did it for them is the revelation that the tobacco tax they just voted in would not raise all the money needed to fulfill all the promises Governor Beebe made to get them to vote for it. It will be eight or nine percent light. The reason given is that they did not calculate the effects that a big federal tax increase on cigarettes would have on purchases, even though they knew that increase was coming. In short, Beebe's budget people gave the ledge bad numbers when it just as easily could have given them good ones, but the good projections did not contain enough money to buy the needed number of votes.

With winter-molasses slowness it becomes apparent to members of the ledge what we at The Watch have been saying for a while now. You cannot trust this man. You can't trust the numbers that come from his department. Let's take a little trip down memory lane so you can see that this is not the first time something like this has happened.....

Remember when the Governor called a special session for the severance tax increase and was determined to send 95% of the revenues to roads (where as the tax before had gone to general revenues)? He took heat for increasing taxes at a time when the state was already sitting on a large surplus but Arkansas families were hurting.

As if in magic response to that complaint, there was an early and mysterious release of budget numbers that suddenly predicted a 107 million dollar "shortfall" in general revenues a week after the special session ended. "That's weird" said budget director Richard Wilson when he learned of the unexpected release of the data. And it was.

Of course it may have gotten him off the hook with why he did not give a tax cut, but it was a huge "dissing" of the legislature. They were called in not only to greatly increase the severance tax rate, but also to re-direct it from going into general revenues to going to a special highway fund with the specific roads to be built coming later. So a week after they re-direct the revenues the Governor's budget office says, "Whoops, there will be a shortfall in general revenues next year."

Why didn't the Governor tell them that before they voted to redirect the funds? He was treating them like mushrooms, keeping them in the dark and feeding them fecal matter. You can go to that link for the details, including an amazing attempt by Beebe to claim that there was no connection between the general revenue fund and the highway fund just established by re-directing monies away from general revenues! No one could accept his statements at face value, but apparently people are used to being lied to in that business, because they seemed to shrug it right off.

But maybe they were not mad because the claims of a "budget shortfall" were just political cover for Beebe keeping all of the tax increase and not giving a tax cut even though the state had a surplus. You see despite the claims of a projected "shortfall" the actual revenue numbers showed that the state continued to pile up a surplus.

The whole mess got so confusing that I wrote in a column called "notes from all over":
So will the revenues be up or down? They are projected to be whatever is convenient for Governor Beebe at the moment.

PS- we should still be watchful that the Governor does not attempt to use some of the tobacco tax money to fund an increase in the number of taxpayer funded abortions in this state as we predicted. What can you expect from a man who looks at you with a straight face and tells you that "borrowing is not a tax increase"? It IS, just for your kids when they have to pay it back rather than for you now.

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