By Caleb Taylor

How can local governments discourage corruption among public officials?

Create more systems that provide for checks and balances, says ACRE Policy Analyst Joyce Ajayi in “” published in the Arkansas Democrat-Gazette on July 16.

Ajayi writes:

In his book “Principles of Fraud Examination,” Joseph Wells, the founder and chairman of the Association of Certified Fraud Examiners (ACFE), points out that generally, employees don’t set out to be corrupt from the outset.��

However, when employees experience financial pressure with weak organizational controls or rules, it is easy for them to develop rationalizations for fraud.”

Ajayi cites the case of April Michelle Poor, a Marvell-Elaine School District bookkeeper, who embezzled $471,665 from the district as an example of these “weak organizational controls.”

Ajayi writes:

Her embezzlement caused teacher and counselor layoffs and nearly shut down the district. Interestingly, some community members described Poor as a good lady who volunteered in the community and sang in the choir. She was the last person in their small community anyone believed would commit fraud.��

Yet Poor committed fraud by issuing 92 checks to herself from July 1, 2014, to December 31, 2018. She hid the payments in the district’s accounting system by making false entries indicating she used them to pay utilities, and altering bank statements.”

Ajayi recommends improving “transparency and adhering to generally accepted accounting principles” as a means of stopping corruption.

Ajayi writes:

To prevent corruption, governments should create more systems that provide for checks and balances. When public officers are aware that their actions are being watched closely, it will undoubtedly improve their behavior.”

For more of our research on transparency, go here.

By Alex Kanode

The 2021 legislative session saw many changes concerning licensing of occupations in Arkansas.��

The Red Tape Reduction Working Group released a stating that there were 704,141 occupational licenses in Arkansas. That amounted to 52 percent of the state’s labor force at the time, according to the , or slightly more than one in every two jobs in the state.��

Occupational licensing refers to sets of requirements that a person must meet before they are legally allowed to work in a given profession. These can be fees, education, experience, or criminal background. Reform in occupational licensing remained a prominent issue for the legislature in 2021.��

Proponents of occupational licensing claim that it can be a way to protect consumers, but it can also be a way to protect producers from competition. High fees, lengthy education requirements, and excessive criminal background checks can keep people out of work. ACRE Scholar and BT����Associate Professor of Economics Dr. Thomas Snyder found evidence of this in his paper “The Effects of Arkansas Occupational Licensure Regulations”. If Arkansas reduced the number of lower income licenses to that of their neighbor Missouri, there could potentially be a .75% decrease in the state unemployment rate.

The Arkansas 93rd General Assembly passed general licensing reforms for many groups, including those below the poverty line, military service members, veterans and their spouses. When it is easier to get a license, it’s easier to earn a living. The legislature did a great job helping these groups. However, there are still improvements Arkansas legislators can make moving forward, especially with people looking to move to Arkansas from other states.

For people just starting out, licensing fees can be a serious impediment to working. Some licenses require $100 or more in fees to be able to work. That $100 can be a large barrier, especially on top of the education and experience requirements someone has to go through.

, with lead-sponsors Senator Ben Gilmore (R-26) and Representative David Ray (R-40) was designed to make it easier for people to work. This bill introduced an application fee waiver for people with incomes below 200% of the federal poverty line. People on programs such as Medicaid, SNAP, or unemployment are also eligible. This reduces one of the barriers to people finding work.

Another example is , sponsored by Senator Ricky Hill (R-29) and Representative Roger D. Lynch (R-14). This legislation improved portability of licenses for military service members, veterans and their spouses. Most licenses are determined at the state level, which makes it costly and difficult to move from one state to another.

However, Act 135 only improved portability for military service members and their spouses. There are still licensed people looking to move to Arkansas who aren’t married to someone in the military. The Arkansas legislature considered a bill, sponsored by Representative Tony Furman (R-28), that would have expanded the license portability improvement to all potential Arkansans.

This policy, known as Universal Recognition, is gaining traction across the United States. Nearby states , , and have all passed universal recognition legislation in the last year. Universal Recognition legislation usually stipulates that if an applicant has had a license in another state for at least a year and is still in good standing with that state’s board, they receive a license in the state they’re applying to. Applicants also often have to reside in the state they’re applying in and pass a criminal background check. This allows for easy transfer of experienced workers between states.

Unfortunately, HB1667 did not make it out of committee. During the April 1st House Public Health and Safety Meeting, legislators expressed fears that licensing boards wouldn’t be able to discover if applicants had medical malpractice lawsuits or a criminal history. But even with a criminal background check, the process would be much quicker than license transfers are currently. Arkansas legislators should watch how similar laws are working in nearby states. It’s now much easier for licensed individuals to leave Arkansas for Missouri than it is for a Missouri licensee to work here.

The legislature did a lot of good for Arkansas in the 2021 session. Lawmakers improved access to work for people below 200% of the poverty line by removing the barrier of upfront fees. They improved portability of skills for military members, veterans, and their spouses by allowing for automatic recognition of other states’ licenses. These weren’t the only changes. There were improvements for licensing people with a criminal history, ensuring that people don’t have to earn two licenses for the same job, and many more changes for specific licenses.��

All of this should be praised, but legislators should also look forward to future improvements to make Arkansas open for business.

By Caleb Taylor

Can Arkansas reduce its income tax burden to zero?

ACRE Scholar and BT����Associate Professor of Economics Dr. Jeremy Horpedahl outlines how Arkansas can accomplish gradually reducing its income tax rate to zero percent in “” published in the Arkansas Democrat-Gazette on June 28th.

Horpedahl writes that gradually reducing the rate over three decades would be a “prudent and realistic” way to eliminate the income tax.

Horpedahl writes:

One current proposal is to reduce the top income tax rate from 5.9 to 5.5 percent. This is in line with past tax reforms and could be a part of a long-run strategy to get to zero. Cutting the top rate by that much every year is easy to absorb in the budget, and after about 30 years we could completely eliminate the tax. That’s a long time to wait, but it is both prudent and realistic.”

Fall Special Session

Arkansas legislators are expected to reconvene in the fall for a special session devoted to congressional redistricting and income tax cuts.

Although a specific plan hasn’t been announced yet by Gov. Asa Hutchinson or legislators, now is the “perfect time” to consider long-term plans for further income tax reforms, according to Horpedahl.

Horpedahl writes:

We all enjoy many government services, and those must be paid for, but not necessarily with an income tax. However, moving away from an income tax requires careful fiscal planning.��A special session on taxes is the perfect time to think about long-run plans, and whether Arkansas wants to move in the direction of having a zero percent income tax.”

Arkansas’s top income tax rate currently stands at 5.9 percent. That’s higher than every surrounding state besides Louisiana, .

You can read the rest of Horpedahl’s op-ed .

What changes to civil asset forfeiture in Arkansas were made during the recent legislative session?

ACRE Research and Program Assistant Zach Burt analyzed “The Arkansas Civil Asset Forfeiture Reform Act of 2021,” also known as in “” in the Arkansas Democrat-Gazette on June 5th.

Burt defines civil asset forfeiture as “a legal mechanism that allows law enforcement and prosecutors to confiscate property used to commit a crime. Most often, seized property is cash, vehicles, and firearms, though sometimes it can be land or houses.”

Burt writes:

Sponsored by Senator Alan Clark, R-Lonsdale, the act attempts to change how spouses, parents and other innocent owners try to get back property that police seized from another person suspected of criminal activities.��

However, the act will do little to reform the process of civil forfeiture in the state because it fails to address the core problem: Arkansas law enforcement is focused on seizing property with low-dollar values, very different from the mythology of cartel members hauling hundreds of thousands of dollars across Interstate 40.”

Burt contrasts Act 1023 with , also by Clark, which failed to garner enough support to become law. Senate Bill 197 “would have offered new and necessary protections for Arkansans.”

Burt writes:

SB197 would have made civil asset forfeiture a criminal process rather than a civil one. This means cases would have to be dealt with in criminal courts, where citizens are guaranteed the right to an attorney.��In civil courts, Arkansans do not have this right, and must pay for legal representation out of their own pockets.

According to research done by the Institute for Justice, a public-interest law firm, the average legal costs for contesting seizures nationally amount to $3,000. No rational person would pay that much to get back property worth only $1,300, the median currency amount forfeited by law enforcement agencies across the country. However, such high legal costs relative to the low-dollar value of property seized is the norm in Arkansas.”

For more on this topic, ACRE Director and BT����Professor of Economics Dr. David Mitchell recently explained how often and how much property was taken through civil asset forfeiture since 2010 at a state Senate Judiciary Committee meeting on December 18, 2020 at the State Capitol.

A copy of the data and graphs he used in his presentation to committee members can be viewed . You can watch the meeting (Mitchell’s presentation begins at 1:42:27 p.m.).

For more on this topic, check out Burt’s “” published in the Arkansas Democrat-Gazette on March 22.

By Caleb Taylor

How has the pandemic affected the local economy?

ACRE Scholar and BT����Associate Professor of Economics Dr. Jeremy Horpedahl will discuss the latest economic data on Conway and Faulkner County as an invited guest speaker of the Conway Noon Lions Club at the Hole In the Wall Cafe at noon on Tuesday, July 6th.��

In other news, the Mercatus Center at George Mason University awarded Horpedahl an Emergent Ventures grant on .

According to the , the mission of Emergent Ventures is to “jumpstart high-risk, high-reward ideas that advance prosperity, opportunity, and wellbeing.”

In a , Faculty Director of the Mercatus Center and Emergent Ventures Founder Tyler Cowen said Horpedahl received the grant for his “work on social media to combat misinformation, including (but not only) Covid misinformation.”

According to a , he was also a co-recipient of another award from the Mercatus Center for the blog , where he is a weekly contributor.

Horpedahl also outlines how Arkansas can gradually reduce its income tax rate to zero percent in “” in the Arkansas Democrat-Gazette published on June 28th.��Horpedahl writes that gradually reducing the rate over three decades would be a “prudent and realistic” way to eliminate the income tax.

By Caleb Taylor

How can Arkansas counties and school districts improve their procurement transparency?

In their latest research, “Arkansas Policy Recommendations: Procurement Transparency,” ACRE Policy Analysts Joyce Ajayi and Dr. Mavuto Kalulu discuss how counties and school districts can improve the web transparency of their finances.

Ajayi and Kalulu begin by noting that “Arkansas has no law that requires school districts and counties to publish bids and bid outcomes online.”

Ajayi and Kalulu write:

In addition, these entities are not required to maintain an online archive for residents to see the bidders, bid winners, and bid amounts. This lack of transparency may encourage corruption.”

Legislators should pass a law requiring Arkansas counties and school districts to post more procurement information online, according to Ajayi and Kalulu.

Ajayi and Kalulu recommend the following procurement information be posted online:

• Current requests for proposals (RFPs)
• Archived RFPs
• Current bidders
• Archived bidders
• Current bid amounts, or at least the range of the bid amounts
• Archived bid amounts, or at least the range of the bid amounts
• Current bid winners
• Archived bid winners
• Current winning bid amounts
• Archived winning bid amounts

You can read the rest of the report here.

You can read the entire third edition of “Access Arkansas: County Web Transparency” by Ajayi and Kalulu here.

For more of our research on transparency, go here.

By Caleb Taylor

ACRE Director and BT����Professor 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.”

How many county governments publish the salaries of their elected officials? 

In their latest research, “Elected Officials’ Salaries Transparency,” ACRE Policy Analysts Joyce Ajayi and Dr. Mavuto Kalulu discuss this and ways county governments can improve their online transparency.

Ajayi and Kalulu begin by noting that only two counties in Arkansas publish elected officials’ salaries online.��

According to Ajayi and Kalulu, improving elected officials’ salaries transparency could help prevent incidents like the 2020 arrest for theft of taxpayer funds by Craighead County Clerk Kade Holliday.

Ajayi and Kalulu write:

County governments should publish elected officials’ salaries online, and include officials’ names, not just job titles.��

The Association of Arkansas Counties (AAC) publishes a County Government Salary Survey that shows the salaries of elected officials at https://www.arcounties.org/site/assets/files/5579/2020_sal-ary_survey_complete.pdf. If counties cannot directly publish the salaries on their websites, they should link to the AAC salary survey so that citizens can easily access the data. The AAC survey should be augmented with public officials’ names, not just salaries by job title.”

You can read the rest of the report here.

You can read the entire third edition of “Access Arkansas: County Web Transparency” by Ajayi and Kalulu here.

For more of our research on transparency, go here.

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.��

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.��

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.��

…��

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.��Removing 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 .��

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