The Tolbert Report

by: Brett Hooton

I was planning on posting a Top 10 List of Nanny State laws that our legislature should pass since we seem to already be on that track.  However the economist in me just simply will not let me write on much of anything other than the economy.  The focus of this blog is not usually on economic issues and almost exclusively on Arkansas issues; however Jason made the mistake of allowing me the privilege to make my own posts.  I plan to start a weekly blog posting on the Tolbert Report titled Economics 101.  Arkansas’ economy and Arkansans will be the focus but this doesn’t mean we won’t talk about national issues, because we will.  We all pay federal taxes and what our federal government does with that money should be important to us.  The way the government spends that money can have a great impact locally.  Arkansas has lagged behind the rest of the country in feeling the effects of the recession, but it is coming.  I like to call it the slinky effect.  As you pull on one end of a slinky that is stretched out, it takes a while for the back end to catch up.  But the back end does in fact catch up eventually. 

We’re starting to see what this recession means to Arkansans as company after company announces layoffs, cutbacks or closings.  Arkansans are reacting in the way that they should.  Families across our state and across the nation as well, are cutting their budgets, paying off debt and where they can, increasing the percentage of money they save each month.  We’re all realizing that we can’t continue to depend on future earnings, real estate, or company pensions to get us to retirement.  In the US the personal savings rate is actually increasing to levels we haven’t seen in a long time.  Yet our state government is increasing its spending and increasing taxes.  We’re fortunate in Arkansas that we’re required constitutionally to balance our state budget which has helped insulate Arkansas from the challenges that many other states are forced to managing.  This means that when new spending is identified there must also be a revenue source for it.  I would propose that if we identify new spending we look and see what old spending is no longer a priority and divert funding to the new higher priority project or program.  In your family, if there is a new priority what do you do?  If an elderly parent moves in with you or if you have a baby what do you do?  Most of us aren’t able to just simply increase our revenue so we cut back on the things that are not as important.  Maybe we don’t get the biggest cable package or we sell the boat.  Is it too much to ask for Government to do the same?

I know Jason and I have already harped about the cigarette tax, but since it just went into effect I feel it is ok for me to mention it again.  Does it seem fair to you, that in a time of financial hardship for so many Arkansans, that your Government has seen fit to take more of your money instead of simply prioritizing their spending?  In a time when families are struggling and mothers and fathers are losing their jobs, that our Government has said we’re now going to charge you more for something to which you’re addicted.  This doesn’t just hurt the families of those who are paying the tax, but it hurts small businesses and communities where these families spend their money.  They now have less money to spend at the restaurants, the video stores, and the department stores.

What is done is done and the cigarette tax is here.  No amount of talking or complaining will make it go away.  Hopefully we can learn from it.  In a time of economic recession government should never take money out of the hands of its citizens.  Let Arkansans pay off their bills, prioritize their spending, and if possible put a little in savings.  It wouldn’t be a bad idea for Government to do the same.