Henderson Oracle

Several things happened after Dr. Linda Beene sent her urgent fax/e-mail yesterday urging the passage of SB 62, a broad revenue measure to fund the Educational Adequacy Fund that is designed to support public school reform. SB 62 was not passed by the Senate, but SB 78 which increases the state sales tax by one cent (and will generate approximately the same amount of money as SB 62) did pass the Senate. It proceeds to the House of Representatives where it will be considered by the House Revenue and Taxation Committee. Passage is not a certainty, as many in the House and Senate would prefer to enact a broader tax rather than relying on an increase in the sales tax. In addition, several are still aggravated about "school consolidation" ... thinking that recent actions either went too far or did not go far enough.

SB 62 is likely to be the only "broader tax" that has a chance of passage. It increases the sales tax by 7/8 cent, taxes certain services, repeals the individual income exemption for capital gains, and increases the tax on liquor, wine and beer, among other things. Regrettably, the broader a proposed tax is, the more groups there are to oppose it. Extending the sales tax to certain services, for instance, has generated a lot of opposition to SB 62.

SB 78 has as one of its "selling points" the graduate elimination of the sales tax on food. Again, that event is problematic in that it will only occur if the money generated by the tax on food can be replaced by extending the sales tax to internet and catalog purchases. Congressional action is required for that to occur.

Finally, the Senate passed HB 1090 yesterday to create the Educational Adequacy Fund. While most of the bill is fairly straightforward and merely separates into a specific fund monies designated to meet the state's financial obligation to provide an "adequate educational system," one section of the bill provides the following very troubling scenario:

(d) In the event the Chief Fiscal Officer of the State determines that the transfers from the Education Adequacy Fund, when added to the other resources available to the Department of Education Public School Fund Account are not sufficient to meet the state's financial obligation to provide an adequate educational system ..., the additional amount required shall be transferred from the other funds and fund accounts ..., based upon the proportion that each of the remaining fund and fund accounts bears to the total of the remaining funds and fund accounts in Arkansas Code 19-5-402(a) and 19-5-404(a)(the Revenue Stabilization Act).

HB 1090 has now been passed by both houses of the General Assembly and will proceed to the Governor for action. It is important that representatives and senators hear from their constituents that they should pass adequate revenues to fund the Education Adequacy Fund, whether that is SB 78, SB 62, or some other measure. Professor Johnnie Roebuck correctly pointed out that many members of our faculty and staff live in areas other thanClarkCountyand would, therefore, have access to legislators other than Representative Tommy Roebuck or Senator Percy Malone. The telephone numbers you may use to call the House and Senate to leave a message for your legislators are as follows:

House of Representatives: 501-682-6211

Senate: 501-682-2902

Thank you for your consideration.

Charles D. Dunn

President

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