Truthing about taxes and Huckabee

The Club for Growth, a.k.a. "Clique for Greed," has invested no small amount of money and ad time to attacking Mike Huckabee's record in Arkansas. In so doing, the CFG has played fast and very loose with the facts, and ignores Huckabee's record of cutting taxes 90+ times during his 10 years as governor.

The Evangelical Outpost has already done a wonderful job of addressing the CFG's falsehoods. Here now is more historical background from the Arkansas Democrat Gazette which should further refute claims that Huckabee is a fiscal liberal. The taxes I address here are the same ones flagged on a CFG-sponsored website, not worth naming here.

Sales Tax, 1996

This was approved by Arkansas voters in a statewide referendum in 1996.

“Gov. Mike Huckabee, who generally favors tax reductions, said Saturday he would vote for an eighth-cent increase in the state sales tax for game and fish services, state parks and conservation.

"There is no greater potential we have in this state than that of tourism," said Huckabee, adding that he would vote for the increase.” (Arkansas Democrat-Gazette, 7/28/96)

Gas and Diesel Fuel Taxes, 1999

Arkansas roads were in terrible condition…

“The study of 1997 Federal Highway Administration statistics submitted by all 50 states showed that Arkansas at the highest percentage of rural interstate miles in poor condition, 29.6 percent.” (Arkansas Democrat-Gazette, 04/12/99)

Huckabee supported a plan to expedite much needed repairs to Arkansas highways. The Senate approved a gasoline tax hike by a 33-2 vote; the House approved this by a 82-17 vote. These taxes financed bonds for highway improvements, which Arkansas voters approved by a 4-1 margin. (Arkansas Democrat-Gazette, 3/17/99; 3/27/99)

“Arkansas voters approved by a 4-1 margin Tuesday a plan to issue $ 575 million in bonds to repair 372 miles of interstate highways. (Arkansas Democrat-Gazette, 6/16/99)

The people of Arkansas spoke loud and clear, through their legislators and through the bond referendum, to improve the highways of the Natural State.

Sales Tax, 2000

Huckabee approved legislation to raise the sales tax to offset a cut on property taxes, though he voiced concerns about the regressive nature of this plan. This plan was approved by Arkansas voters in a 2000 referendum and upheld by the Arkansas Supreme Court in 2002.

“Two proposed state constitutional amendments to provide tax relief likely will win voter approval in Arkansas in the Nov. 7 election, a new Mason-Dixon Arkansas Poll indicates…. Proposed Amendment 2, the Legislature's amendment to limit increases in the assessed value of taxpayers' real property after a countywide reappraisal and to require a tax credit of at least $ 300 on homestead property: 57 percent for, 21 percent against, 22 percent undecided. …
Huckabee said this proposal, "for those who desire property tax reduction, is an option. But they need to realize it will increase their sales taxes in the process." (Arkansas Democrat-Gazette, 10/5/00)

“Gov. Mike Huckabee voted Friday and said he voted against proposed Amendment 2 because it would result in an increase in the sales tax and that would hurt the state's poor people. …
"I'm pretty ambivalent about it," Huckabee said. "I think it's an option voters have if they'd rather have sales tax than property tax. I tend to think sales tax can be more regressive than property tax in Arkansas. Sales tax hits the poor people automatically. Property tax will only hit the people who own property.” (Arkansas Democrat-Gazette, 10/28/00)

“The state Supreme Court has unanimously upheld the half-percent sales tax increase enacted by the Legislature in 2000, rejecting a lawsuit that challenged the tax statute's constitutionality. ...
The increase, which took effect Jan. 1, 2001, raised $ 169.2 million last year to pay $ 152.3 million to counties to cover the cost of property tax credits of up to $ 300 per homeowner.” (Arkansas Democrat-Gazette, 09/25/02)

Cigarette Tax, 2001

I personally have no problem with raising cigarette or tobacco taxes to fund public health, particularly since tobacco is such a drain on public health. This story also highlights how Huckabee was able to work succesfully with an overwhelmingly Democratic-controlled legislature to achieve positive results. This is a critical skill lacking in Washington today!

“Gov. Mike Huckabee announced Thursday his support for raising the state's tobacco tax, giving pharmaceutical discounts to Arkansas senior citizens, expanding Medicaid coverage and putting more money into Meals on Wheels and breast cancer research.” (Arkansas Democrat-Gazette, 03/09/01)

“One part of his approach is to trim state government to offset his tobacco settlement plan's funding of more than 400 previously unfunded state jobs. The other initiates a tobacco tax that has lain dormant in state law since 1997 and shifts funding from his tobacco settlement spending plan to increase state services favored by a number of lawmakers.

The governor said his proposal would pair [money from the tobacco settlement plan] with revenue generated by a two-part tax, including a 2.3 cent-per-pack levy on cigarettes and a 2 percent tax on all other tobacco products. The combined revenue from the tax and the smoking-cessation program would free up general revenue, and the state would increase spending on breast cancer and cervical cancer treatments, elderly services and public school nurses, all of which are priorities among many Democratic lawmakers.

The governor took pains to stress that the Republicans were not acting in a partisan manner but had resolved differences to work with Democrats. He said he knew he would need votes from Democrats to pass the dozen appropriation bills that would implement Initiated Act 1, which voters approved Nov. 7.” (Arkansas Democrat-Gazette, 04/05/01)

Nursing Home Bed Tax, 2001

This tax or fee was passed to make up for the shortfall of federal Medicaid funds.

“The measure was contentious because it would mean an initial increase of about $ 2,000 a year for elderly patients who don't receive Medicaid, although supporters stressed that rates for many of them would have risen anyway. That's because nursing homes with a mixture of patients -- some who are covered by Medicaid and some who aren't -- would have to increase their rates for patients with no Medicaid, they said.

Supporters said the bill was the best way to get a steady stream of new revenue to the state's nursing home industry, which contends it is on the verge of collapse as it struggles with federal patient-care reimbursements that are among the lowest in the nation.

There are about 22,000 nursing home patients in Arkansas, about three-quarters of whom rely on Medicaid.
Arkansas has 239 nursing homes, seven of which are not in the Medicaid nursing home program and will not see any of the benefits from the new tax.” (Arkansas Democrat-Gazette, 3/10/01)

Sales Tax, 2002

Note here that Huckabee avoided a tax hike in earlier years with smaller cuts, but was finally forced to raise the sales tax to avoid draconian cuts to education, prisons and health care.

"Gov. Mike Huckabee announced in November a $ 142 million cut to state agencies -- including $ 14 million for scholarships programs -- after revenues fell below projections." (2/2/02 Arkansas Democrat Gazette)

The post-9/11 recession left no other options for balancing the budget.

“The sales tax increase would, among other things:

• Raise the average teacher salary by about $ 1,000 a year for the next two years…
• Make room for about 900 more prisoners and reimburse county jails for housing state prisoners.
• Keep pace with Medicaid growth that's been 15 percent to 18 percent in recent years. The money will help nursing homes meet state standards, among other things.
• Establish a "super project fund" to entice major industrial plants to Arkansas.

During fiscal 2002, state government was hit with a $ 227 million revenue shortfall. But Huckabee, unlike governors in several states experiencing similar financial problems, refused to call for a tax increase. Instead, the state cut programs including teacher raises, college scholarships and Medicaid.” (Arkansas Democrat-Gazette, 11/15/02)

Rising health care costs also (and again) to blame...

“The lion's share of a projected $247 million increase in state spending on the Medicaid program over the next two years would be funded by the sales tax increase proposed Thursday by Gov. Mike Huckabee.

Hanley said the $247 million increase, which when matched with federal dollars would generate a total of about $988 million over two years, is necessary just to ensure that the current level of Medicaid services are maintained.” (Arkansas Democrat-Gazette, 11/15/02)

Income Surcharge Tax, 2003
Tobacco Tax, 2003

And again, health care costs continue to skyrocket while Washington fiddles and creates new entitlements for prescription drug coverage.

Gov. Mike Huckabee and legislative leaders acknowledge that the $ 100 million tax increase enacted during last week's special session is only a temporary budget fix if the economy doesn't improve and growth in Medicaid and other programs isn't contained.

Spending on Medicaid, corrections and education at public school and higher education levels takes up 91 percent of the state budget, the governor said. "That's where the cost is, and that's what continues to go up. They go up at a higher rate at the expense of everything else."

It would be up to Congress to make changes that would allow the state to cut its Medicaid costs, Huckabee said. Controlling spending on education and criminal justice will be up to state officials, he said… (Arkansas Democrat-Gazette, 5/11/03)

Arkansas was not alone in facing financial hardships in 2003...

"2002 [was] the first year in modern history that [we] collected less money than the year before," said state Revenue Commissioner Tim Leathers.

That year Arkansas was caught in the financial typhoon that hit most states. Thirty-nine other states collected fewer general revenue tax dollars in 2002 than in 2001, leading to widespread budget cuts and tax increases nationwide. ...

"It sounds like Arkansas is pretty typical," said Nick Jenny, a fiscal analyst for the Nelson A. Rockefeller Institute of Government in Albany, N.Y. "There's the really bad year in 2002, and this year things are pretty flat. What we're seeing is about a 2 percent revenue growth [among states in 2003] and that barely gets you past inflation." ...

The growth in revenue didn't cover Medicaid expenditures, Leathers said.

Nationwide, state Medicaid spending is expected to grow by 8 percent.

In Arkansas, state Medicaid expenditures grew from $1.5 billion in 1999 to an expected $2.5 billion in 2003.

"The main engine that's driving Medicaid costs are prescription drug [cost increases]," Jenny said. "There was some increase in [Medicaid] enrollment which is what you'd expect in an economic downturn."

The Arkansas Legislature on May 8 voted during a special session to raise income and tobacco taxes by $110 million for fiscal 2004 just to keep pace with Medicaid and with the cost of running the prison system.

Without the tax increases, tens of thousands of Medicaid recipients would have lost some nursing home services, home nursing care, disability therapy and other services.

Also, state prison officials said they would have had to close a prison.

Gov. Mike Huckabee, a Republican who initially resisted tax increases when the budget crisis hit two years ago, called for a tax increase this year to keep services in place. ...

Other legislatures have had similar struggles over tax proposals.

Idaho had its longest legislative session ever as lawmakers debated a sales tax plan by Republican Gov. Dirk Kempthorne. At least one other Republican governor, in addition to Huckabee and Kempthorne, is pushing tax increases this year.

In Alabama, Gov. Bob Riley, who defeated a Democratic incumbent last year, has called the Legislature into special session starting May 19 to consider a $1.2 billion tax package.

The federal government is allowed to engage in deficit spending and is doing so in vast amounts at this time. (Arkansas Democrat-Gazette, 5/18/03)

An interesting side note...

Adjusted for inflation, the largest tax increase in Arkansas history was enacted in 1983 during the administration of Gov. Bill Clinton. The Clinton-backed 1 percent increase in the state sales tax to pay for improvements to the state's education system raised $ 162 million a year at the time - about $ 300 million if the same tax covering the same goods and services were enacted today. (Arkansas Democrat-Gazette, 5/11/03)

Internet Taxes, 2004

Huckabee supported an amendment that would extend the moratorium on Internet access taxes for two years, instead of a permanent ban.

"Also arguing that the [permanent ban] violates states' rights, Arkansas Gov. Mike Huckabee said it was akin to 'putting a federal stop sign on a state road'." (Bond Buyer, 2/24/04)

Michigan Gov. John Engler, a widely respected fiscal conservative and former governor of Michigan, voiced the same concerns in testimony to Congress in 2001.

I'll stack Huckabee's record of accomplishments and judicious fiscal management against any other presidential candidate. Any current or former senator can claim to have a conservative fiscal record, but the fact remains that those senators did nothing to stop a runaway spending train in Congress. I have far more respect for executives -- governors or mayors -- who had to balance tough decisions on cutting programs versus cutting taxes. Cutting taxes may be ideologically salivating to some conservatives, but it can also be reckless stupidity when it leads to basic services being denied to citizens, or teachers or public safety workers being grossly underpaid their worth. If that's fiscal conservatism in 2007, no thanks... I'll take Mike's brand of Christian conservatism any day.