A comparison of the size of Arkansas government and how much it costs tax payers
By David Crow
NO WAY, HE DID NOT SAY THAT!
About a month ago I heard in a TV interview where Sen Dismang, following the general session, commented that “AR did not have a spending problem, it had a revenue problem”. Then a few days later, I heard our own Gov Hutchinson say on radio interview the same thing. My immediate thought was, no way, he did not say that. This was very confusing because I thought all along we were over taxed and they were trying to make cut taxes through reforming our tax structure and hopefully cut spending! Well, I decided to do a little research and here is some of what I found.
In 2015, the most recent financial reporting* says AR spent $23.6 billion in tax dollars. That is $7,935 per capita vs. contiguous states that spent on average $5,456 per capita. In other words, we spent 45.4% more than the average of OK, MO, TN, MS, LA and TX. When compared to the total US states average of $5,711 per capita, I found that AR spent 38.9% more than the total US average.
Later, I shared these numbers at a meeting, I was asked by a state representative who attended that meeting, to remove TX from totals of contiguous states, due to its large population and the impact it might have on the numbers. After doing so I found that AR spent 38.5% more than the other 5 contiguous states less TX.
In addition he asked that I compare AR with all states in US whose population was similar to AR, so, it was determined we would compare to those whose population was plus or minus 1 million of AR. These states included OK, UT, CN, IO, KA, MS and NV. Their average spending was $5,770 per capita. I found that AR spent 37.5% more than states with comparable population.
AR total spending in 2015 was $23.6 billion (state and federal tax dollars) therefore, if AR legislators and the Governor were to reduce spending by the 37.5% the average of comparable states number we would save $8.8 billion, that is a really big number!
I’ve always felt that AR state government was a bit oversized having watched it grow so much over the years. As a matter of fact, I believed it was a bit bloated. I thought a good place to start looking for cost savings would be employment. There were 63,297 full time equivalent employees** in state government in 2015. I found that state of AR employs 213.3 people per 10,000. When excluding employees who are part of education it leaves 122 people, per 10,000 in population, which comes to 35,895 employees. The average employment, excluding education workforce, in surrounding states was 87.81 people. That means we employed 38.9% more people in comparable jobs than the average of surrounding states.
35,895 emp. x 38.9% = 13,963 excess employees compared to average
No doubt we have a bloated government requiring excess taxes and spending to compensate them.
Assume average state employee pay, benefits and tax = $50,000
13,963 x $50,000 = $698,158,000 potential savings annually
It is evident that AR has been and continues to be on a spending binge which no doubt makes it very difficult to reduce taxes on the AR citizens and businesses. And with Governor Hutchinson and legislative leadership of Sen Dismang and House Speaker Gilliam increasing spending 3% in each of the past three legislative sessions, regretfully there seems to be little chance we can expect any effort on their part to cut spending. You couple that with their effort to increases taxes by approximately $400 million last session, I don’t hold out much hope we will see significant reform.
We don’t have a revenue problem we have a spending problem!
Chairman Faulkner Co Tea Party
*Ballotpedia.org/total_state_government_expenditures – data provided by NASBO – National Association of State Budget Officers