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Huckabee endorses tax rebates Wednesday, May 10, 2006 By Aaron Sadler Arkansas News Bureau LITTLE ROCK - At least part of a hefty state budget surplus should be refunded to Arkansas taxpayers to help defray escalating energy costs, Gov. Mike Huckabee said Tuesday. Huckabee asked the Department of Finance and Administration to consider a rebate proposal in light of an estimated $332.3 million budget surplus this fiscal year, the governor said on his monthly statewide call-in show on the Arkansas Radio Network. DF&A revised the state's budget forecast upward again last week, for the third time this year. Officials told legislators that state revenues are expected to be up 5.6 percent over fiscal 2005. The current fiscal year ends June 30. Huckabee also said some of the expected budget surplus should be set aside for a "rainy day fund" to be tapped into in the event of an economic downturn. Arkansas is one of only a few states in the nation without such a reserve fund. The state also never distributed rebates to taxpayers, Revenue Commissioner Tim Leathers said. Arkansans who commute to and from work are being hit hard by gasoline prices near $3 per gallon, and home utility bills are expected to rise this summer, Huckabee said. He urged listeners Tuesday to call their legislators to tell them to support a tax rebate. Huckabee would be required to convene a special session of the Legislature before a rebate could be enacted this year. The term-limited governor will leave office soon after the Legislature next convenes in regular session, in January. The governor said a one-time rebate check to taxpayers is "the next important thing we need to do" after creation of a rainy day fund. "If we have a hot summer and high electricity costs added with high gasoline costs, it's really going to be a struggle and stretch for many struggling Arkansas families," Huckabee said. "So if we could get a mechanism whereby we could return the overage to Arkansas families in the form of a rebate check ... it's something that hopefully would get some traction with the Legislature." A possible Huckabee successor, Democrat Mike Beebe, has proposed using the surplus to help phase out the state sales tax on groceries. Beebe also likes the idea of a rainy day fund, spokesman Zac Wright said. Asa Hutchinson, Beebe's Republican opponent in the governor's race, has proposed investing a portion of the state's surplus funds in work force training and research at Arkansas' colleges and universities. He also has proposed exempting utility taxes on energy costs for industry. Hutchinson spokesman David Kinkade said Hutchinson wants relief for Arkansas taxpayers. "He hasn't seen any details on Gov. Huckabee's suggestions regarding rebates, but he believes that any form of tax relief is a good thing," Kinkade said. "Beyond that, Asa is focused on long-term relief that will spur economic growth, and he'll reveal more of his plans as the campaign develops." Last summer, state Sen. Tracy Steele, D-Little Rock, proposed returning 50 percent of the state's $307 million fiscal 2005 surplus to taxpayers. A legislative committee discussed the plan, but no action was taken. Leathers said the climate is different this year, now that the state Legislature has acted on a school funding case that was looming in 2005. Lawmakers approved about $200 million in additional school aid in a special session last month. "We still hadn't settled the most recent decision from the Supreme Court on the schools. That was still up in the air," Leathers said. "And the surplus wasn't to the point where it is right now. Those two factors make it more of a serious issue right now than it was a year ago." Leathers said DF&A is studying how other states have returned money to taxpayers. Oklahoma taxpayers in December received a $45-per-person income tax rebate. In Nevada, where there is no income tax, the state emptied its coffers of $300 million by refunding car registration fees. Nevada rebates ranged from $75 to $275. Leathers said it was too early to tell how much of a rebate Arkansans might receive. "We're just starting to look at this," Leathers said. "We've had tax cuts, but as far as I know, we've never made a direct payment to taxpayers." DF&A Director Richard Weiss said last week that the time was right for a rainy day fund, given the size of the surplus and uncertainty about the 2007 economic climate. He said he would recommend the state hold back at least 5 percent of gross revenues for the fund. "The first thing I'd like to see us do is make sure there is a reasonable, not a ridiculous amount, but a reasonable rainy day fund, is set aside so that in the event of what inevitably will be a recession, we're not looking to slash Medicaid funding for elderly people and we're also not going to be thrown back in court because we don't have enough money to cover schools," Huckabee said on his talk show. |
