The Arkansas General Assembly has informally adjourned, meaning that the time to pass new bills is over. They will reconvene in May to formally wrap up the session, but the major action is now concluded.

Prior to the session, ACRE put together a Top 10 List of policy ideas based on our research. And throughout the session, ACRE researchers were watching relevant bills and in Little Rock whenever our research could help inform the debate. So how did our Top 10 List turn out?

Occupational Licensing

ACRE Policy Analyst Zachary Burt

Major improvements were achieved in terms of interstate cooperation and lowering barriers for professionals who wish to move to Arkansas, through . This act provides for automatic license recognition for any out-of-state license holder who moves to Arkansas, allowing them to get to work after moving here much more quickly. License holders will be granted Arkansas licenses upon moving to the state as long as they have held the license in their previous state for one year and are in good standing. The bill was weakened to some extent from its original form, changing from saying licensing boards “may” administer an Arkansas-specific exam to an out-of-state , but the final bill says that they “shall” administer the exam. This change takes away flexibility from the licensing boards and slows down what would have been a more efficient recognition process, but the reform is still good and significant overall.

Three bills this session joined Arkansas to existing licensing compacts. These compacts are a related, but distinct, concept to universal licensing recognition. joined Arkansas to the Occupational Therapy Licensing Compact, joined the state to the Counseling Compact, and joined us to the Audiology and Speech Language Pathology Interstate Compact. These three acts are excellent steps towards getting more qualified healthcare and mental healthcare professionals to move to Arkansas.

In addition to these good steps forward, Arkansas also created or expanded at multiple occupational licenses, such as a new license for behavioral analysts (note: Governor Sanders recently ) and an expansion of the existing auctioneer license. These licenses will only add to the burden of licenses in Arkansas, and is especially worrying given that according to Arkansas already has the .

Taxes and Spending

ACRE Policy Analyst Joseph Johns

Changes to tax and spending policy can take both large and small forms. This session saw a number of small reforms pass with regard to state income taxes, but there were also some major reforms of local sales taxes.

ACRE’s big idea for tax and spending reform on our Top 10 list was a “tax and expenditure limit,” a policy that about half of US states, including all of Arkansas’s neighbors, already have. While a big change like this can take a long time to build public support – as it should for a major change – there was an important first step. Rep. Wayne Long proposed a constitutional amendment that would establish a TEL in Arkansas, which he called the Arkansas Taxpayer Bill of Rights. The legislature did not refer that amendment to the voters this year, but we are optimistic that it will start future conversations about this kind of tax and spending reform.

On state income taxes, the legislature passed another slight reduction in both personal and corporate income tax rates, lowering both by two-tenths of a percentage point (the top personal rate is now 4.7 percent). While this was a small reform, it is still important, and continues along the path that the legislature has taken in almost every session since 2015. Cumulatively, these small tax cuts have created large reductions in income taxes for middle class families of almost a thousand dollars per year.

One other major set of tax reforms was passed that will limit local sales tax increases. Through the passage of two bills this year, Arkansas both required local A&P taxes to be approved by the public (before this, no public vote was required) and set strict limits on when all local tax elections can be held. Cities, counties, and school districts will now have just two fixed dates each year (in May and November) to hold local tax elections. This reform was not on our Top 10 list, but it is one that ACRE has been working on for years. Additionally, another good corporate tax reform was enacted – repealing the throwback rule – which Arkansas has suggested for years beginning with our 2016 book on tax reform.

Government Transparency

While none of ACRE’s proposed Top 10 ideas for government transparency were passed, this doesn’t mean that we weren’t busy in this area. To the contrary, there were several bills proposed during the session which would have reduced local government transparency, and ACRE followed all of these bills, testified before the legislature multiple times, and explaining why these bills would reduce transparency.

ACRE Policy Analyst Dr. Joyce Ajayi

Even though no bills were passed from our Top 10 list, towards the end of the session, two bills were filed that would have greatly expanded theof public meetings and the for cities in Arkansas. Given how late the bills were filed, they didn’t end up becoming law, but we look forward to similar bills being filed in future sessions that will establish the same transparency in Arkansas cities that ACRE helped in 2019.

The challenges with government transparency in Arkansas were demonstrated in many ways, including several attempts to limit Arkansas’s FOIA law, which is generally regarded as among the best in the nation. ACRE’s advice to policymakers doesn’t always involve recommending new legislation, but often takes the form of preventing bad changes from happening.

The 2023 Legislative Session has seen a flurry of occupational licensing-related bills over the past two months. Many of these bills make small tweaks to licensing rules or board compositions, but several bills with a potentially large impact have either already been passed or stand a high chance of doing so. Three of these bills would join Arkansas to interstate licensing compacts.

Interstate compacts are agreements between two or more states that allow states to enter into agreements with one another with the approval of Congress. These compacts allow states to work together to address common issues and problems that cross state boundaries. They can cover a wide range of areas, including transportation, natural resources, public safety, education, taxation, and healthcare.

Once an interstate compact is in place, it becomes legally binding and enforceable, with each state required to comply with its provisions. The terms of the compact may include a range of provisions, such as requirements for cooperation between states, funding mechanisms, and dispute resolution procedures.

Interstate compacts are sometimes used for professional licensing, allowing professionals to practice their licensed professions in member states without having to obtain a separate license in each state. These compacts are designed to increase the mobility of professionals, while ensuring that they meet the standards of each state they practice in.

The first interstate compacts for occupational licensing were . They are , and have been expanding to include compacts for mental healthcare professionals in recent years. Arkansas is currently a member of , covering a variety of issues such as education, law enforcement, resource management, and licensing, among others.

Interstate compacts for professional licensing provide a number of benefits for both license holders and the public. Professionals are able to practice in multiple states, which can expand their career opportunities and provide greater flexibility. In Arkansas, this would make it easier for residents of Texarkana to work on both sides of the city in Texas and Arkansas, or for professionals in Memphis to serve clients on our side of the Mississippi River. The public benefits from increased access to qualified professionals, as well as greater consistency and reliability in the standards for licensing and regulation across states.

The three interstate compact bills to come out of the legislature so far this session all deal with healthcare or mental healthcare licenses. will join Arkansas to , which 21 states are currently party to, with legislation pending in 14 states. will join Arkansas to the , with 17 current members and pending legislation in 21 states. Finally, will join Arkansas to the , with 23 states currently joined and 16 states with pending legislation. HB1082 and HB1181 have already passed both chambers and are awaiting the governor’s signature. SB91 has passed the full Senate and the House committee, but has yet to be heard by the full House. These bills will allow skilled professionals who hold licenses in these areas to move to Arkansas much more easily. This is all around a good thing for Arkansas.

Critics of the bills and of similar licensing policy tend to say that this will effectively make Arkansas’s licensing standards equal to those of the least restrictive state, but this is an over-simplification. Interstate compacts are formed around national standards for licensed professions, and these standards tend to reflect the norm for the field as a whole.

In the most recent edition of their report, , the Institute for Justice ranked Arkansas as the 9^th most burdensome state for licensing in the country. While Arkansas’s licensing requirements are not far from the national average, the state licenses far more occupations than most states do. Out of 102 occupations covered in the report, Arkansas licenses 71 percent, compared to the 53 percent national average. As long as this is the status quo in Arkansas, interstate compacts and universal recognition policies will be particularly effective here, since these reform strategies together encompass nearly all professional licenses

Interstate compacts are also a distinct policy from Universal Licensing Recognition. Interstate compacts establish common standards and processes for a single professional license, while universal recognition establishes standards and processes for occupational licenses as a whole. To learn more about Universal Licensing Recognition, take a look at this previous blog post. These policy options should not be seen as conflicting. They are complementary options lawmakers can use to fit different needs for licensure reform. Most universal licensing recognition bills, including the one currently on the table in Arkansas, , have provisions that exclude licenses handled under interstate compacts from the legislation. This way, interstate compact licenses are not handled under two separate legal processes.

Between joining three new interstate licensing compacts, and the promising outlook for passing a universal licensing recognition bill,  joining the interstate compacts will allow several kinds of healthcare professionals to move to the state more easily, and enacting universal recognition will do the same for a variety of professions, particularly low- and middle-income careers. More and more states are joining interstate compacts and enacting universal licensing recognition, and Arkansas must do the same to ensure we remain a competitive, attractive option for people choosing to relocate their careers.

For more information about occupation licensing in Arkansas, visit this past blog post.

For more information on ACRE’s labor market regulation research, visit this page.

The Arkansas General Assembly convenes for the 2023 general session on January 9, 2023. Over the weeks and months that follow, the Legislature will consider bills on a wide variety of issues affecting individuals and businesses in Arkansas. Researchers at ACRE have been hard at work since the last legislative session conducting basic research in our primary policy areas of government transparency, labor market regulations (especially occupational licensing), and fiscal policy (both tax and spending issues).

Based on our research at ACRE, we’ve also put together a list of our Top 10 Policy Goals for the next legislative session. These policy goals encompass major reforms that legislators could implement which our research and the research of other academics suggest will improve the economic fortunes of Arkansans. We invite you to take a look at our list of recommendations in the linked document which also provides references to the research supporting our ideas, but in brief here are our policy goals:

• Occupational Licensing
  1. Universal recognition of licenses from other states
  2. Lowering barriers to obtaining licenses such as unnecessary educational and training requirements
  3. Using less restrictive regulations than occupational licensing, such as registrations and certifications
• Taxes and Spending
  1. Structural changes to the state budget, such as a “tax and expenditure limit” which puts a limit on state government growth
  2. Continuing the reductions in personal and corporate income taxes that began in 2015
  3. Targeted spending reforms, especially by learning from other states that spend more efficiently than Arkansas
  4. Reducing state spending on targeted economic development incentives
• Government Transparency
  1. Expanding transparency at the local level
  2. Fiscal transparency for first-class cities in Arkansas, following successful transparency reforms for counties in Arkansas in recent years
  3. Transparency for federal influxes of funds, such as the various federal assistance plans passed during the pandemic

As the legislature gets under way and bills start to be filed and discussed, ACRE researchers are willing and excited for the opportunity to help educate lawmakers and the general public on the costs and benefits of potential policy changes in our research areas. As in past years, ACRE staff will appear before legislative committees to explain how our research informs policies under consideration, as well as work with local media to help explain to Arkansans how policy changes may impact them.

Finally, ACRE is also excited to announce the release of our Annual Report for 2021-2022. If you don’t know much about ACRE and our programs, this report is a great way to learning about all the things we do for students at UCA, and to help educate Arkansans generally about economics and public policy. We look forward to continuing this work over the next few months during the legislative session, as well as throughout the rest of the year after the session concludes.

The paper explores the phenomenon of “hidden sentences”, also known as collateral consequences of conviction. These are de facto additional punishments justice-impacted individuals experience even after they have completed the terms of their official sentence. The abstract of the paper reads:

ACRE Student Fellow Caleb Vines (right) receives SOBIE award from Doug Barrett, Professor and Department Chair from University of North Alabama

This study explores the legal barriers created by state governments for justice-impacted individuals and how it relates to the amount of criminal behavior, unemployment, and exodus from the labor force. States vary in their number of erected barriers for individuals with a criminal background. The laws are typically in place to prevent criminal behavior, but they may backfire. The more work barriers someone with a criminal history faces, the more attractive illegal activities become. We examine differences across states in the data set provided by the . We compare incarceration rates, unemployment rates, and labor force participation rates to the number of rules that affect someone with a criminal background. Our results predict that states with more collateral consequences will have higher per-capita imprisonment, higher unemployment, and lower labor force participation rates.

Vines was presented with a Student Research Award at the SOBIE conference for his presentation and work on the subject.

For questions on the subject or to read the working paper, contact Zachary Burt at zburt1@uca.edu.

On November 18th, the Occupational Licensing Review Subcommittee of the Arkansas State Legislature met to review licensing requirements from several state licensing boards. Included among these was the State Board of Athletic Trainers. Athletic trainers are skilled professionals that specialize in preventing and treating athletic and sports related injuries.

Arkansas is similar to other states in the region in how we license athletic trainers, with one exception. The state requires 50 hours of annual continuing education hours for athletic trainers, almost twice as much as any other state in the South. For example, Mississippi and Tennessee both require 25 hours, and Louisiana requires only twelve. Missouri and Oklahoma both do not require any continuing education hours for athletic trainers.

Senator Alan Clark (R-Lonsdale), co-chair of the committee, questioned representatives of the State Board of Athletic Trainers as to why our requirements are so much higher than other states in the region. Mr. Russell Burns, Director of the Arkansas State Board of Athletic Trainers, said that in his understanding, continuing education for athletic trainers is handled by the Board of Certification for the Athletic Trainer (BOC), a national credentialing organization for athletic trainers.

Certification through the BOC is optional in most states, including Arkansas. However, unlike most states, Arkansas defaults to the BOC’s high continuing education requirements. Every other state in the South sets their own standards for continuing education.

The mandate of the Occupational Licensing Review Subcommittee is to determine whether a given license contributes to public health and safety. If having nearly double the continuing education requirements as any other state in the region does not do that, then the requirements should be changed.

Continuing education is important, but Arkansas requires more than is necessary. If these requirements do not change, we risk losing qualified professionals to neighboring states with lower overall licensing burdens. Right now, it’s much easier for an athletic trainer to relocate to Missouri or Oklahoma than it is to Arkansas.

To watch a short video comparing Arkansas’s license requirements for athletic trainers to other states, go .

To watch the November 18th subcommittee meeting, go .

For more on ACRE’s occupational licensing research, visit this page.

ACRE Research Associate Zachary Burt explains the problems and possible solutions on Believe in Arkansas on November 4. Believe in Arkansas is a recurring Facebook Live show hosted by Ryan Norris of Americans For Prosperity-Arkansas. The discussion focused on licensing’s impact on Arkansas’s economy and workforce.

Examples of common licenses include physicians, landscape contractors, cosmetologists, massage therapists, and many more. These licenses are intended to protect public health and safety, but they often have harmful economic impacts. Burt and Norris discussed the primary ways licensing impacts the economy, including:

• Economic shows that licensing reduces job opportunities and entrepreneurship by acting as a barrier to entry. People are less likely to pursue a job if there are a lot of hoops you have to jump through before you can start working and making money.
• Licensing . Since many states have differing requirements for licensure, and often do not have reciprocity with other states, licensed individuals may choose not to relocate for better opportunities because of the difficulty of getting licensed in a new state.
• Licensing . Studies show that licensing may cost consumers an additional $203 billion annually for services. Lower-income individuals are hit the hardest by artificially high prices.

Norris asked if occupational licensing actually contributes to public health and safety in an age of online reviews and a wide variety of options for services. Arkansas has relatively new sunset review process for licenses. This process is intended to see if a given license actually helps protect consumers health and safety, which they may do in some cases. However less burdensome types of regulations such as certifications and registries would often work just as well. There are too many occupational licenses, and the legislators involved in the sunset review process should take the opportunity to make it easier to work in Arkansas.

For more information:

For more on occupational licensing in Arkansas, visit our labor market regulation page.

ACRE Scholar Dr. Thomas Snyder was a coauthor on this about occupational licensing in Arkansas.

For more on Believe in Arkansas, visit their .

By Caleb Taylor

ACRE Director and BTĚěĚĂProfessor of Economics Dr. David Mitchell joined Americans for Prosperity-Arkansas on May 20th to discuss some of ACRE’s work in the recent legislative session.

Mitchell said ACRE experts speak to legislators and community groups “to show what the data actually shows on a variety of issues.”

Mitchell said:

The goal is to be that resource. We’re really open to talking to people about how we can make Arkansas better.”

Mitchell said he was “really excited” about legislation passed in the previous legislative session to expand scope of practice for nurse practitioners in Arkansas.

Mitchell said:

Arkansas is near the bottom for primary care. I was really excited that this year we had two really important bills that are going to help people in especially rural areas. There’s plenty of practitioners in more urban areas. The drive to see a provider is usually very far in rural areas so having more nurse practitioners is going to be great.”

You can listen to the full legislative recap with Americans for Prosperity-Arkansas .

For more on Mitchell’s recent research and testimony on scope of practice issues, check out this ACRE Review post on March 17th.

For more on the topic, you can read “A Broad Consensus on Expanding Nurse Practitioners’ Scope of Practice” here.

You can also read another of Mitchell’s recent publications on this issue “Addressing Arkansas’s Health Services Shortages By Empowering Nurse Practitioners” here.

For more of ACRE’s research on nurse practitioners, check out our labor market regulation page.

Mitchell is also the co-author with Jordan Pfaff and Zachary Helms of an ACRE Policy Brief  entitled “Solving Arkansas’s Primary Care Problems by Empowering Nurse Practitioners.”

By Caleb Taylor

Should Arkansas eliminate many fee-only licenses?

The 2019 Arkansas Legislature passed , mandating sunset reviews of every licensed occupation in Arkansas. “Occupational Licensing and Arkansas’s Act 600,” by ACRE Policy Analyst Alex Kanode discusses the reforms and missed opportunities of the Arkansas Legislative Council’s Occupational Licensing Review Subcommittee’s first round of sunset reviews.Ěý

In his latest research distillation, “Occupational Licensing: Fee-Only Licenses,” Kanode discusses ways Arkansas can reform fee-only licenses.

Arkansas has a large number of regulations restricting what occupations people can work in and which businesses they can start. These regulations may be intended to protect health, safety, and quality for workers and consumers. But some licenses merely charge a fee, with no training or other requirements.Ěý

Kanode writes:

One example of license fees used for other projects is the licensing of motor vehicle salespersons. They’re required to pay a $15 license fee to work at new motor vehicle dealerships. These funds are then used to pay for education grants for tech schools in Arkansas. It is in no way the responsibility of new car dealers to fund those programs, and the subcommittee recommended the repeal of that license.Ěý

…Ěý

The subcommittee should continue to consider whether the board’s actions fit the health and safety concerns of the profession. They should ask, “What is the purpose of this license?”

The fees themselves surely aren’t protecting public health and safety.ĚýRemoving regulations that tax businesses will be better for Arkansas’ economy, and that will help Arkansans in general.”

Arkansas legislators passed by Rep. Jim Dotson R-Bentonville during the most-recent legislative session. It removed a fee-only license for motor vehicle salespersons.

To find out what recommendations the subcommittee approved unanimously in their final meeting of 2020, you can check out their .Ěý

For more on this topic, check out our labor market regulation research page.

By Caleb Taylor

ACRE Legislative Research Associate Dr. Nathan Smith recently testified in favor of legislation removing barriers to work to certain cosmetology workers

delicenses shampooers and exempts those who provide “simple” hairstyling services from being required to complete 1500 training hours to get a cosmetology license.

Smith said at a House Public Health, Welfare and Labor committee meeting on April 1st that the law would allow for more individual choice and for more market choice.

Smith said:

We all shampoo, blow dry and style our hair. You don’t add risk by having a professional do that for you. The only legitimate reason to have a license is for public health and safety. When that’s not at stake, it should be left to individual choices and markets to decide how a service is going to be provided.”

It was passed into law and is now .

You can watch Smith’s testimony (starts at 10:38 a.m.).