State Reps. Richard McGrew, R-District 85, and Les Warren, R-District 84, along with state Sen. Alan Clark, R-District 7, answered questions about state and local government last week for members of Hot Springs National Park Rotary Club.
The club's president, Neal Gladner, moderated the presentation during the club's weekly meeting on Wednesday, beginning with a question about the "two big matters yet to be settled" -- the budget and the Revenue Stabilization Act -- in addition to the governor's plan for tax cuts and the criminal justice reform bill.
"What else, besides those three items, is sitting out there that you think is going to get attention before adjournment?" Gladner asked.
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"The two things that I understood as far as the governor's agenda, a state income tax and a new prison, I think when we get back on Monday, there's to be a bill dropped that will address a new prison somewhere in the state," Warren said.
"The only place that I've heard mentioned, I know some legislators around Jonesboro had been pushing for it to be there," he said.
"State income tax, that was a third provision outside of the Arkansas LEARNS, and so I think we'll see some form of tax cut."
The RSA is the last thing done in the Legislature before adjourning, Warren said.
Once the Legislature and the governor's office figure out the hierarchy of what will be funded, "we will vote on a Revenue Stabilization Act. It has typically been about a 2% increase over the previous term. I've heard that it may be as high as 4% this time."
McGrew mentioned a forthcoming bill on property management "that should make property management stronger in Arkansas and more available to individuals in Arkansas."
"We have a huge shortage of property management in the end, and there's also talk about a study group that would study tenant and landlord issues to help some of the issues that we have in Arkansas," he said. "It's something that's made the newspapers lately, here and in Little Rock, a property that's been mismanaged, and a lot of time that has to do with out-of-state owners and out-of-state property management, so hopefully, we'll see something on that coming forward."
Clark said the state's commitment to education is important, also noting the potential tax cut and how it will be implemented. With the threat of a recession on the horizon, taking a look at future spending is important, he said.
"You have to look at that as the spending's fine now. Where will we be three years and four years down the road?" he said. "And I would be taking that very seriously as we're trying to balance a tax cut and more prison beds along with what we're doing in education."
Gladner then asked how much they have thought about the budget up to four years out, as some of the new bills, if passed, will have more spending after more time.
Clark answered first, mentioning the economy's status at the time will affect planning for the years to come.
"A lot of conversation about long term," he said. "Not the first year, second year, we don't have any doubt. But, the third year, fourth year, it's about what's going to happen in the economy and what their projections are and are they safe projections so that we don't have to come back and scramble because Arkansas (is) very proud of the fact that we have a balanced budget."
McGrew agreed with Clark, noting how the bills will affect the future depends on the economy.
"It just depends a lot on how much money we have coming in and how it spends, how the new governor wants to hold money back from certain areas and spend it in others. So, to me, there's a lot to be seen yet, and so it's kind of wait and see what happens. I think with the reserves we have and things right now, we're OK, but the future is the big question."
The budget surplus is "not a long-term solution," Warren said. However, Warren mentioned things he's been working on for Hot Springs specifically, including bringing a $9 million historic tax credits back to the Arlington Resort Hotel & Spa after they were taken back shortly after the COVID-19 pandemic began.
"I am working as hard as I can to get that back because I believe the Arlington is a cornerstone in downtown."
Warren is also working on advocating for an additional $325,000 in funding for literacy councils, bringing it up to $1 million, meaning $10,000-15,000 more for each literacy council.
He is also working on a YMCA tax exemption, as there are only two in the state, he said.
Gladner then brought up the impact in Hot Springs, asking "what's sitting out there in the Legislature that has a specific impact in your view for Hot Springs?"
McGrew brought up short-term rentals, saying it "has a huge impact on Hot Springs."
"To me, it's a lot different. And discussing about it over there, I said, 'You know, you don't understand, I'm from Hot Springs, and Hot Springs is different. We're the number one tourist community in Arkansas, and the short-term rentals are not just someone renting out their home. It's business coming to the community."
Warren also spoke on HB 1307, which "will create, basically, a blackball list that will list companies that none of the retirement systems for the state can invest in."
"And, it will also create a list of companies that the retirement systems have to divest themselves of those assets. That will create losses for the retirement systems. That really bothers me. I have spent six, seven years now working to reduce the unfunded liabilities in the retirement systems to make the benefits of each retirement system the best they can be," he said.
"Arkansas is the only state not accepting the retirement funds or providing a fiduciary exclusion for the retirement funds. So, if you have a chance, tell your House members to vote against these amendments."