The economy should dictate the rise, fall of our taxes.

A philosophical argument about government

IF YOU read these opinion pages enough, you’ll find that the Encyclopedia of Arkansas makes frequent appearances. Like a favorite character actor who just so happens to show up in all your favorite movies. Think Rip Torn. No matter the role, or Arkansas history question, you’ll be satisfied with the performance.

A friend sent us rummaging around the encyclopedia’s entries the other day after Tim Griffin, the lieutenant governor of Arkansas, came out in favor of phasing out the state’s individual income tax.

Our friend had some notes from the old days, passed down to him by his father—and didn’t David Pryor have some sort of grand plan to decrease the state income tax in the 1970s?

The Encyclopedia of Arkansas jogged faulty memory, and how:

It was called The Arkansas Plan, and sometimes even The Coon Dog Plan. Gov. Pryor, in late 1976, introduced a plan that “called for a 25 percent permanent decrease in the state income tax and a bar to expansion of the state sales tax. To enlarge the role of local governments, these units would be given dramatically enhanced power to raise their own revenues through a variety of taxes. In exchange, these local governments would lose the state funds, socalled ‘turnbacks,’ that were important to funding their programs.”

Apparently the governor at the time gave his plan a nickname, intentionally or not, by explaining that local residents could decide for themselves whether to raise local taxes to pay for things, or spend the money on “a new shotgun or coon dog.”

Gov. Pryor’s plan didn’t make it into law. The encyclopedia says the fear that local voters would choose the coon dog over other local programs “raised the enmity for the plan by local government officials and education advocates.”

But David Pryor’s underlying argument is still being debated today: Why collect taxes at the state level, hire people to manage the money, and send it back to the cities and counties, when eliminating the middle man could save taxpayers some percentage of their cash?

Fast forward to today: The current governor and state lawmakers have cut income taxes in the near past, and continue to do so. Eventually the tax rate is set to decrease to 5.9 percent. If the state continues to cut, say, a little more than 1 percent every three years or so—that is, if it stays on its current path—then it might take 16 more years to do away with the income tax at the state level. (For all the cries about strangling the government, Arkansas still produces a surplus, even during pandemics.)

Increases or decreases of taxes depend on economic conditions. There may be some years when the state can’t cut any more, so it could take a couple of decades to get to where some of our competitors are today. Those competitors being Texas, Tennessee and Florida—states without statewide income taxes.

If, one day in the future, Arkansas ends up with no income tax, but yet retains the second-highest sales tax rate in the nation (ugh), local governments will probably try to increase property taxes, which are among the lowest in the nation. Now, every tax has an anticonstituency that will fight it. But couldn’t we have that argument on a more local level? Instead of making all these decisions in Little Rock?

It’s not a new idea.

Or even a particularly Republican one.

THIS COLUMN has suggested doing away with income taxes for a period of years (five) for new residents of the state. We believe that such a news item would encourage people to move to Arkansas, and it would benefit those of us who live here now because those newcomers would be paying state sales taxes and local property taxes. We refer you to the many editorials over the years for pros and cons.

But even if that proposal is years away, Arkansans—those here now, those to come later—can at least rest assured that we are one of the few states in which our leaders are lowering taxes, instead of raising them. Illinois, this isn’t.

Will Arkansas ever be able to decentralize tax collections and ease power out of Little Rock and into city halls? It’ll take lawmakers willing to give up power. And we don’t know if Arkansas has those yet.

In 1997, our reporters interviewed David Pryor about his Coon Dog Plan. (Mike Huckabee was trying to cut taxes at the time.) The former governor said his plan was a “hard sell” to lawmakers in 1976-77. “Most of them didn’t like it,” he told the paper. “It empowered local government rather than the Legislature. It was just a total new way of doing business.”

But it still was a good idea. If not a new one.

Nor, as we noted above, a particularly Republican one.