5/18/12

LITTLE ROCK — The unemployment rate in Arkansas fell to 7.2 percent in April, the Department of Workforce Services said Friday.

That was a slight drop from the month before when the rate was 7.4 percent.

The civilian labor force increased by 500 because of 3,300 more employed and 2,800 fewer unemployed Arkansans in April, the agency said.

The number of employed Arkansans has now increased for nine straight months and the figure in April was 30,700 more than the same period a year ago.

According to figures released Friday, non-farm payroll jobs increased by 6,100 in April with gains in eight sectors, led by leisure and hospitality (3,700 jobs), educational and health services (1,100 jobs) and health care and social assistance (800 jobs).

5/15/12

LITTLE ROCK — Departing U.S. Rep. Mike Ross on Monday ruled out running for governor in 2014, nearly 10 months after he announced that he wouldn’t seek a seventh term in the House this year because he was considering a governor’s office bid.

Instead, the 50-year-old Prescott Democrat said he will become senior vice president for government affairs and public relations for Little Rock-based Southwest Power Pool after his current term in the House ends Jan. 3.

Ross said in a written statement Monday afternoon that he has received “a lot of encouragement” and has given “serious consideration” to a 2014 bid for the governor’s office, a race that will begin early next year.

“However, after a lot of prayer and reflection, I have decided that I will not be a candidate for governor in 2014,” he said.

Ross said he has been able to spend “more time, including weekends, with my family” since he announced on July 25 that he wouldn’t be seeking reelection, and “we have enjoyed getting back to a more normal way of life after 22 continuous years of elective service.

“This led me to the realization that there is life after politics,” he said.

Ross’ announcement Monday caught some Democrats by surprise.

But Jay Barth of Little Rock, a political science professor at Hendrix College in Conway, said it’s always been clear that running in a Democratic primary for governor was going to be “a very challenging endeavor” for Ross as a conservative Democrat.

Hal Bass, a political science professor at Ouachita Baptist University in Arkadelphia, said, “I think he would have run a strong race, but there is no guarantee in politics.”

“The change in the political landscape makes it more difficult to get nominated and elected,” he said.

Barth said Ross’ decision not to run opens up the Democratic primary to other candidates.

Attorney General Dustin McDaniel of Little Rock has been widely expected to run for governor as a Democrat in 2014, and Little Rock businessman John Burkhalter, who serves on the state Highway Commission, has said he’s considering a bid for governor as a Democrat.

McDaniel said in a written statement that he called Ross on Monday, thanked him for his 22 years of public service and congratulated him on “this exciting opportunity for him and his family.”

A spokesman for former Democratic Lt. Gov. Bill Halter of North Little Rock, who lost in a primary-election challenge to U.S. Sen. Blanche Lincoln in 2010, said Halter received many phone calls after Ross’ announcement Monday urging him to run for governor.

Halter spokesman Bud Jackson said Halter has received such phone calls for a long time, but the number “picked up dramatically” after Ross’ announcement.

Halter is seriously considering running, according to Jackson.

Little Rock Republican Curtis Coleman, an unsuccessful GOP candidate for the U.S. Senate in 2010, said he is also considering running. Republican Lt. Gov. Mark Darr of Springdale has said he is considering the race, and Republican U.S. Rep. Tim Griffin of Little Rock has declined to say whether he’s considering a bid for governor or the U.S. Senate in 2014.

Former U.S. Rep. Asa Hutchinson, a Republican who lost to Gov. Mike Beebe, a Democrat, in the governor’s race in 2006, said, “We have many great potential candidates for 2014, but that is too far off to consider.”

In his new job, Ross will develop and lead Southwest Power Pool’s governmental affairs at the federal government level and the nine-state region it serves, and manage public relations for the company, according to Southwest Power Pool.

Southwest Power Pool President and Chief Executive Officer Nick Brown said in a written statement that Ross’ success in leading bipartisan solutions in federal and state government is “an excellent fit to the diverse membership” of the group.

“I’ve known Mike since high school in Hope, Arkansas, and have followed his political career for decades,” Brown said.

Founded in 1941, Southwest Power Pool consists of 66 group members in Arkansas, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma and Texas that serve more than 15 million customers.

The group members include investor-owned utilities, municipal systems, generation and transmission cooperatives, state authorities, wholesale generators, power marketers and independent transmission companies.

Southwest Power Pool said it ensures reliable supplies of power, adequate transmission infrastructure and competitive wholesale prices of electricity.

“While many people have never heard of Southwest Power Pool, they perform an important mission in managing the electric grid and keeping electric rates affordable in nine states,” Ross said.

“Public service has always been an important part of my life, and although I will no longer be holding elective office, this is another way for me to continue to serve the public as Southwest Power Pool works to meet the electricity needs of its nine-state region today and for the future,” he said.

“This is an especially good fit for me, as I begin a new chapter in my life, because Southwest Power Pool is a nonprofit organization that serves an important public service, and it allows me to remain here at home in Arkansas with my family,” Ross said.

He noted that he has served 10 years in the Arkansas Senate and a dozen years in the U.S. House of Representatives.

“Let me assure the people of Arkansas’ 4th Congressional District that I will remain on the job, and continue to provide them with a strong and effective voice in our nation’s capitol for the remainder of the term that I was elected to serve, just as I have tried faithfully to do from the beginning,” Ross said.

Ross informed Beebe about his latest plans Monday afternoon “to give him a heads-up about the news,” Beebe spokesman Matt DeCample said.

When asked about the governor’s thoughts about Ross not running for governor, DeCample said the governor has “been careful not to say much when asked about people who might be running – same will hold true when people decide they won’t be running.” Information for this article was contributed by Alison Sider of the Arkansas Democrat-Gazette.

Arkansas Democrat Gazette

5/15/12

LITTLE ROCK — Dave Fletcher resigned Monday as director of the Arkansas Department of Veterans Affairs after the discovery this month of federal law violations at the Little Rock Veterans Home, lax budgetary oversight and growing legislative criticism.

Gov. Mike Beebe appointed Fletcher in 2007 to head the agency that oversees services for the state’s more than 260,000 veterans, two veterans cemeteries and veterans nursing homes in Little Rock and Fayetteville.

The governor’s spokesman, Matt DeCample, said Monday that the governor “made it clear to David that the time was coming for a change in leadership.”

Fletcher’s resignation letter reflected that message. He wrote that he was proud of what the agency accomplished over the past five years.

“However, it is clear that there are improvements that must be made to the internal operations of the department, and the mistakes have been made in the administration of both the department and the Little Rock Veterans Home.”

He wrote that he had been “contemplating retirement for some time.”

His retirement was effective immediately and will require his resignation as president of the National Association of State Veterans Department Directors, a post he was elected to in November.

The governor is expected to name a new director this week.

The new appointee will take over an agency in crisis.

Fletcher’s management of the agency came under scrutiny two weeks ago after he fired the administrator of the Little Rock nursing home, claiming that she knowingly collected $560,000 in out-of pocket fees from wounded and severely disabled veterans for more than three years after a change in federal law prohibited such fees.

E-mails uncovered through an Arkansas Freedom of Information Act request by the Arkansas Democrat-Gazette and Fletcher’s own congressional testimony in March indicate that he knew those fees were being collected.

Fletcher has said the agency doesn’t have the funds to repay residents and their families.

In 2009, the U.S. Department of Veterans Affairs increased to $7,000 per month per resident payments to the state to cover all care for war-wounded and service disabled veterans with a VA disability rating of at least 70 percent.

The same law that increased the VA’s monthly payment for the care of those veterans also required the state to use some of the funds to pay for primary care and related medicines.

The state Veterans Affairs Department contracted with a Little Rock doctor in February for primary care but still has not set up a contract for prescriptions.

Fletcher acknowledged last week that the agency has double-dipped federal funds for three years by using the Little Rock VA hospital to supply veterans’ primary care and prescriptions while receiving the federal money to pay for that care elsewhere.

Every annual VA inspection of the Little Rock Veterans Home from 2007 through 2011 included a warning that the home is required to contract with a doctor for primary care of the veterans. Yet over the past three years, little has been done to find prescription coverage, according to records obtained by the newspaper.

The VA offered a contract for prescriptions that would cover the veterans, but Fletcher turned it down as too expensive.

The Central Arkansas Veterans Healthcare System gave the state Department of Veterans Affairs a 90-day extension last year that continued free prescription coverage with the understanding that the agency was actively seeking a prescription contract. That extension was renewed in February. Last Friday it was extended again, but for only 30 days.

Five days ago, members of the Joint Legislative Auditing Committee criticized Fletcher’s lax oversight of his agency in the wake of an audit that highlighted poor inventory controls and misappropriation of state funds by an employee who has since resigned.

The audit uncovered inaccurate inventory records for more than $200,000 in agency equipment and inadequate budget oversight that allowed the agency’s former finance officer to use a state credit card to charge more than $1,800 over six months to beauty salons, pet stores and liquor stores.

The employee was allowed to resign with benefits. The illegal charges were never recouped.

When the committee chairman asked how a state credit card could be abused without notice for so long, Deputy Director Lawrence Pickard said, “The environment at the time was not healthy, and I’ve since changed that.”

The morning after that hearing, Pickard gathered the staff of the Little Rock Veterans Home and gave a stern warning about people coming to work late. The lecture ended in at least one grievance complaint filed against Pickard for using racial slurs.

“Yeah, what happened was, basically people have been really late. I said, ‘I don’t want to hear any excuses,’” Pickard told the newspaper Monday. “‘I don’t want to hear that you’ve got this problem or that problem.’ And I said, ‘The one I really don’t want to hear is about black-people time.’”

Pickard said the home’s director of nursing corrected him, calling it “colored-people time.”

He met with the staff and the grievance officer Monday and apologized.

“I told them that I have a different relationship with my inner staff, and I thought you guys were part of my inner staff, so basically I made the mistake of trying to be funny,” he said, adding that it wasn’t meant to be insulting.

“It was one of those things where I just basically didn’t think about what I said because I was talking to people like normal people and like they talk to each other. And it was one of those things that was totally taken out of context and totally got misunderstood.”

5/13/12

LITTLE ROCK — A panel of three federal judges is considering how to resolve a lawsuit over whether Arkansas’ Senate districts were drawn to dilute the black vote. One redistricting trial expert said it could be months before the court rules whether there is a problem with the boundaries.

The lawsuit seeks to prohibit Arkansas from using district boundaries approved last summer by the state Board of Apportionment and make the state draw districts that the plaintiffs say would better serve black voters in the eastern Arkansas Delta region, particularly in District 24.

The judges announced through an order Friday that they would not stop the primary election because early voting is taking place. Early voting began May 7. The primary is May 22.

The case is Future Mae Jeffers v. Mike Beebe. Plaintiffs in the case were part of lawsuits in the 1980s and 1990s that created some House and Senate districts where black voters are in the majority. These districts were created to enhance the influence of black voters. They sought to make up for lower rates of black voting caused, experts said, by institutionalized bias.

In this suit, the plaintiffs alleged that the boundaries of District 24 dilute black voters’ chance to elect the candidate of their choice and that the dilution was intentional.

The black voting-age population percentage of District 24 is 52.88 percent.

Gov. Mike Beebe, Attorney General Dustin McDaniel and Secretary of State Mark Martin make up the board and are defendants in the suit. On Wednesday the panel cleared Martin of the intentional-dilution charge after all three men testified that Martin had little input on the final map approved by the board.

Martin largely sided with the plaintiffs in the case.

The lawsuit contends that the boundaries of District 24 violate Section 2 of the Voting Rights Act of 1973 as well as the 14th and 15th amendments to the U.S. Constitution, which were ratified after the Civil War to protect blacks’ civil rights.

Chief U.S. District Judge J. Leon Holmes, District Judge Susan Webber Wright and 8th U.S. Circuit of Appeals Judge Lavenski Smith, a former Arkansas Supreme Court justice, heard the case.

Loyola Law School professor Justin Levitt said the judges’ decision not to delay the primary could signal they need time to make a ruling.

“It doesn’t mean much,” he said. “It could be a signal that the judges don’t particularly think they’re going to find the district’s unlawful or it could be a sign their minds are wholly not made up. It may be a while. There’s no particular deadline on them.”

Levitt runs all about redistricting.org, which tracks how each state completes congressional and legislative redistricting, and legal challenges that are raised.

He said that if the judges rule that the lines dilute voter strength, a lot depends on how egregious they determine the violation to be.

“It is conceivable but unlikely that the court will order a new primary between now and the general election,” he said. “Chances are the results of the primary will stick for November.”

Starting over would mean either the judges would redraw the boundaries based on maps submitted by parties in the case or the boundaries would be sent back to the board, he said.

The plaintiffs offered up two maps as possible options during the trial.

One that was created April 4 would give the district a black voting-age population percentage of 58.41 percent. It would include all of St. Francis and Lee counties as well as southern and western Crittenden County and portions of Cross and Monroe counties.

Beebe said he “absolutely” would consider that map if the district is redrawn.

Any of the parties in the case can appeal directly to the U.S. Supreme Court, which cannot refuse to consider the case.

“There’s a special federal statute for constitutional challenges to state legislative redistricting – and in this case, the plaintiffs have alleged not only violations of the Voting Rights Act, but intentional racial discrimination that’s prohibited by the 14th and 15th Amendments,” Levitt said. That statute is 28 U.S.C. 2284.

Federal statute 28 U.S.C. 1253 sets up a special procedure for appealing these cases.

HOW MUCH IS ENOUGH?

At no point in the four-day trial did a witness provide an exact percentage for what the black voting-age population needs to be so that blacks in a majority-black district will have a fair chance to choose the candidate of their choice.

Levitt said there is no static population percentage that states have to reach when creating majority-minority districts. Instead, it depends on the size of the population, how racially polarized election patterns are and whether the state has a history of discrimination.

He said states that have to draw majority-minority commonly perform an analysis of voter behavior in those districts before drawing the lines.

“Not everybody does, but most should. It’s a safeguard against violating the law,” Levitt said. “If you haven’t done the analysis and somebody sues you, then you don’t know whether or not you broke the law.”

Beebe, McDaniel and their staff members testified that no analysis was done before the boundaries were approved. They couldn’t give a reason why Senate District 24’s black voting-age population of 52.88 percent was sufficient. The 2010 census showed that the old district that encompassed much of the same space, District 16, had a black voting-age population of 65.1 percent.

Senate District 24 has the lowest black voting-age population of the four majority-minority districts.

District 25 has a black voting-age population percentage of 55.85 percent; the 30th’s is 53.19 percent and the 31st’s is 58.26 percent.

During the public meetings before new districts were approved, board coordinator Joe Woodson said the informal standard for black voting-age percentages in the districts would be 55 percent.

“My intention was to say this is a ballpark, it’s what it has been in the past,” he testified at the trial.

Beebe and McDaniel testified they were not aware Woodson used that number. Both said their goal was to maximize the number of black voters in the majority-minority districts.

“I didn’t have an arbitrary number in mind,” Beebe said.

The two men said they were most concerned that all districts meet the commonly held redistricting “principles.”

Those include that districts need to have less than 10 percent population variance; not be drawn solely based on race; be designed with all parts connected and compact; avoid splitting political entities such as cities; keep similar communities together; maintain the core of existing districts; protect incumbents; and minimize gerrymandering, which is drawing districts to protect a political party.

THE HISTORY

Thirty-eight years ago Arkansas had no black legislators – although in the 1800s Arkansas had about two dozen – but redistricting and a series of legal battles over the shape and racial composition of legislative districts led to an increase in the number of black lawmakers.

Currently, 15 of Arkansas’ 135 legislators are black.

“We still have to recognize the historic impact of discrimination,” Martin’s attorney, Asa Hutchinson, said. “History is essential in this matter. It’s about the next generation of African-Americans that simply want the opportunity to elect that candidate of their choice.”

Attorney James Valley and the plaintiffs tried to show that voting in the Delta continues to be racially polarized and that black candidates struggle to win county positions.

District 24 includes all of Crittenden County and parts of Cross, Lee, Phillips and St. Francis counties.

Former Sen. Roy “Bill” Lewellen of Marianna testified that black voters went so long without being represented in government, that there is still a pervasive attitude that it won’t do any good to vote.

“The biggest problem was basically changing the attitude in the black community,” he said. “It’s something that has gone on for hundreds of years.You are not going to change it in 20.”

He said in some counties polling places aren’t in black communities. And without public transportation, it is difficult to get black voters, especially poor voters, to the polls.

“That’s the way it’s always been,” he said.

In his closing arguments Valley drew parallels between the current lawsuit and the cases that increased the number of majority black districts, calling it “same stuff, different decade.”

In 1989, M.C. Jeffers of Forrest City and others sued the state over the 1981 redistricting map, which included four majority-black House districts and one such Senate district. In the case, Jeffers v. Clinton, the U.S. District Court ruled that the state’s map violated the federal Voting Rights Act.

The court ordered an increase to 13 majority-black House districts and three such Senate districts for the 1990 election. In that case the board was reconvened to draw the lines, Valley said.

Several of the plaintiffs in that case, including Jeffers’ widow and daughter, are plaintiffs in the current case.

During redistricting after the 1990 Census, the Board of Apportionment kept that same number of majority-black districts. The same plaintiffs again challenged the state map in U.S. District Court. But a three-judge panel ruled that the state’s changes were sufficient.

In 2002 a U.S. District judge threw out a lawsuit from the National Association for the Advancement of Colored People that challenged the constitutionality of the realigned legislative districts after the 2000 Census.

Assistant Attorney General David Curran said that in the old district, then labeled District 16, black voters were able to elect the candidate of their choice. He pointed out in his closing argument that the sitting senator, Jack Crumbly, D-Widener, is black.

“The idea that the old District 16 wasn’t working defies common sense,” he said.

He said the plaintiffs were basing their argument that the old district wasn’t effective on a single 10-year-old Senate race in which the white candidate beat the black candidate.

In the 2002 Democratic primary after the 2001 redistricting, the black sitting senator, Alvin Simes, received 36.47 percent of the vote and lost to Steve Higginbothom.

Curran said the years the district was held by a white senator shows that the district was fair to both blacks and whites.

5/14/12

LITTLE ROCK — Fifty of the 135 state legislative seats will be filled in the May 22 party primaries, leaving 85 contests this fall to decide control of the next General Assembly.

After making substantial gains in 2010, Republicans need to pick up five House seats and three Senate senate to become the majority in both chambers for the first time since Reconstruction.

“We’re looking to gain the majority in both the House and the Senate,” state GOP chairman Doyle Webb said during the political filing period in March.

In the primaries, 13 Senate candidates have a free ride to the 2013 legislative session, including 11 incumbents — seven Republicans and four Democrats — and three former state House members, two Democrats and one Republican.

In the House, 37 candidates have no opposition in the primary or the Nov. 6 general election. Thirty-two are incumbents — 13 Democrats and 19 Republicans. The remaining five, all Democrats, will be completely new to state office when they are seated in the House in January.

“Hallelujah, praise the Lord,” said Democrat Mark McElroy of Tillar, who faces no challenger in his first legislative race.

“To tell you the truth I was shocked … flabbergasted,” said McElroy, who for nearly 20 years has been the Desha County judge. “This year, especially with the margin between the Republicans and Democrats, the first time since Reconstruction that they’ve got a good chance of taking over the House anyway … with a full court press on, I was prepared to campaign.”

Despite a historically strong Democratic Party in Desha County, the Republican Party has grown in popularity in southeastern Arkansas, he said. He considers himself a fiscal conservative because he recently got the Desha County Quorum Court to approve a 10 percent cut in the county budget and “we never once talked about raising taxes.”

Jobs and the economy are the biggest concerns among voters, he said.

“When people are putting nearly $4 a gallon in gas in their vehicles and they’re only making $7.30 an hour, do the math on that. People are hurting,” he said.

The Democrat will replace House Speaker Robert S. Moore, Jr., D-Arkansas City, in the House next year.

Also this year, nine races — six involving Democrats and three involving Republicans — will be decided May 22 because the winners will not face opposition in the fall.

The remaining 54 House races do not have primaries and will be settled in November. Forty-six have head-to-head contests pitting a Democrat against a Republican, while two others also pit an independent against major-party candidates. Four races have a Republican facing an independent, one has a Republican facing a Green Party candidate and one has a Democrat facing a Green Party candidate.

Ten state Senate incumbents and three newcomers are unopposed. Three other incumbents face primary challengers only, three face challengers in the primary and in the general election if they survive.

Of the remaining Senate races, which don’t include any incumbents, one will be settled in the primary, three have both a primary and general elections and four will have just a general election.

5/11/12

New Study Examines Economic Impact of Increased Severance Tax Rate

Increasing the severance tax on natural gas production in Arkansas would lead to significant economic losses including 8,322 permanent jobs, $2.7 billion in total spending, and $960 million in gross product, according to a study released today by the Conway Chamber of Commerce. The study indicates the proposed increase to a flat rate of 7 percent – with no incentives for new wells or high-cost drilling – is likely to reduce well completion and production by 8.5 percent, and will compel companies to shift production to areas with lower tax rates.

“Raising the severance tax rate in Arkansas would reduce the level of economically-feasible production, diminish the state’s position relative to other producing regions and bring job losses to the state,” Dr. Ray Perryman, founder and president of The Perryman Group and author of the study said.  “Exploration and production are significant economic engines for Arkansas, and a decrease in energy sector activity would harm the state’s economy.”

Tax rates in Arkansas today are competitive with those in Texas—the largest gas-producing state in the country—and other areas with substantial drilling and exploration activity. A significant tax rate change would raise the relative cost of investing in Arkansas’ resources, which is a critical parameter in producers’ decision-making processes.

According to the study, higher taxes will also lead to decreased personal income and expenditures across several sectors.

Sector

Losses in Total Expenditure

Jobs Lost

Mining

$1,305,728,080

672

Finance, Insurance & Real Estate

$295,513,997

317

Retail Trade

$211,888,348

2,906

Nondurable Manufacturing

$194,605,307

452

Construction

$155,873,675

1,103

“The livelihoods of thousands of Arkansans depend on natural gas exploration and production—incomes that would be jeopardized by an increase in the severance tax rate,” said Brad Lacy, President and CEO of the Conway Area Chamber of Commerce.  “Exploration and production provide millions of dollars in spending, gross product, and personal income, as well as thousands of good jobs to our economy. These contributions directly benefit businesses, state and local governments, and schools. Our state’s focus should be squarely on growing jobs not putting them at risk.”

The Conway Area Chamber of Commerce facilitates the development of Conway into a nationally-competitive, economically-diverse city.  The Chamber seeks to lead its community toward sustainable economic growth, advocate a pro-business climate for its members, build upon Conway’s educational foundations, and establish and execute the community’s vision.

The Perryman Group is an economic research and analysis firm based in Waco, Texas. The firm has more than 30 years of experience in assessing the economic impact of corporate expansions, regulatory changes, real estate development, public policy initiatives, and myriad other factors affecting business activity.  More information can be found at www.perrymangroup.com.

By Guest Writer Kelly Robbins Special to the Democrat Gazette

5/12/12

LITTLE ROCK — As executive vice president of the Arkansas Independent Producers and Royalty Owners Association (AIPRO), natural gas production is something I work with every day. I see the jobs and revenue that natural gas is bringing to communities that would otherwise face tougher budget choices and more challenging economic times.

Everywhere I travel, I see the positive impact that natural gas is making in Arkansas. People in towns all around our state ask me if natural gas is clean and safe to develop. The industry works hard during production to ensure the safety of all Arkansans and to protect our state’s treasured natural resources.

A recent review by the nonprofit State Review of Oil and Natural Gas Environmental Regulations Inc. (STRONGER) found that Arkansas’ natural gas industry is well-managed and meets the group’s guidelines. I would like to commend STRONGER for recognizing the strenuous efforts Arkansas’ natural gas industry has taken to protect the people and pristine landscape of our state.

The organization’s praise of Arkansas’ hydraulic-fracturing rules and its well-water complaint protocol is further recognition and proof the industry is taking the necessary steps to ensure that natural gas is being produced safely. In short, existing regulations are working.

Arkansas is a leader in regulatory standards, with several regulations dictating how natural gas production is performed. The review finding reinforces the importance the industry places on the safe and responsible development of natural gas.

Oversight is a necessary function that the industry supports. In fact, Arkansas was one of the first states in the country to require public disclosure of chemicals used in hydraulic fracturing, known as rule B-19. As the state’s landmark disclosure rule, this regulation requires disclosure of additives used in hydraulic fracturing on a well-by-well basis. The Arkansas Oil and Gas Commission also recently adopted rule D-20, which regulates compressor noise levels.

All of these regulations point to a state that takes oversight very seriously, and to an industry committed to the same goal.

Arkansans do not have to choose between economic growth and environmental protection, nor should they. States with increased natural gas production have seen positive economic growth and enviable job creation statistics, a sign of a bright economic future for our state as we continue to develop this abundant resource.

Natural gas production in Arkansas is responsible for thousands of well-paying jobs and provides much needed income to state and local governments. During a time when many states face financial hardship, job growth fueled by natural gas acts as an engine for economic prosperity. In fact, the natural gas community has contributed nearly $154 million in severance-tax receipts under the current severance-tax structure since 2009, up from $1.3 million in 2008.

The abundance of natural gas in our state makes this possible, and if we support this viable domestic energy resource, we can look forward to continued economic growth. Natural gas also benefits dozens of ancillary industries, generating over $1.14 billion in labor income outside the natural gas community in 2010.

Those of us who work in the natural gas industry are also residents of this great state. Industry personnel work where they live because we all believe in the benefits that natural gas production brings, and will continue to bring, to Arkansas.

We, your friends and neighbors who work in the industry, want to ensure that natural gas production is performed in a safe and responsible way; one that does not interfere or harm Arkansans’ quality of life, but rather enhances it and makes Arkansas a better place to live for generations to come.

5/11/12

WASHINGTON — The U.S. government posted a budget surplus in April, the first in more than three years, as tax revenue climbed and spending dropped.

However, the federal government remains on track to exceed a $1 trillion deficit for the fourth-straight year.

Receipts topped outlays by $59.1 billion compared with a deficit of $40.4 billion in April 2011, the Treasury Department said Thursday. Economists projected a $35 billion surplus, according to the median estimate in a Bloomberg News survey. It was the first surplus since September 2008 and the biggest since April 2008.

“The total federal budget deficit is slowly shrinking,” said Steven Wood, president of Insight Economics LLC in Danville, Calif. “However, this improvement has been halting, due largely to erratic economic and employment growth.”

President Barack Obama, in his campaign to win a second term, is trying to make the case that while the recovery has been uneven, the U.S. is making progress. The administration has said it won’t accept any of the dozen spending bills House Republicans are working on unless they agree to abide by a budget deal reached last year.

The dispute risks leading to a government shutdown shortly before the November elections unless lawmakers agree on legislation to keep agencies operating in the 2013 fiscal year, which starts Oct. 1.

Republicans rejected Obama’s $3.8 trillion electionyear budget plan, saying it didn’t go far enough to reduce the deficit or boost economic growth.

Estimates of the April budget outcome ranged from roughly in balance to a surplus of $60 billion in a Bloomberg survey of 23 economists. April has been a surplus month in 44 of the past 58 fiscal years, the Treasury Department said.

The nonpartisan Congressional Budget Office estimated this week that the April surplus would reach $58 billion. The budget office said in a report dated Monday that the results were influenced by shifts in the timing of certain payments.

Receipts increased 10 percent from the same month last year to $318.8 billion, Thursday’s Treasury Department report showed. Over the same period, spending dropped 21 percent to $259.7 billion.

Through the first seven months of the budget year that began Oct. 1, the United States has run a $719 billion deficit, the Treasury said Thursday.

Just as in Europe, the surge in deficits has led political leaders in the United States to focus on tightening budgets rather than spending more to strengthen economic growth.

But the United States enjoys key advantages over Europe. Unlike many European nations, it can borrow at super-low rates. That’s largely because investors regard U.S. Treasury bills as ultrasafe compared with other global assets. Money has poured into Treasury notes since the financial crisis, driving down their rates and easing borrowing costs for the U.S. government.

The resilience of the U.S. economy has further attracted investor interest. Though sluggish, the U.S. economy is growing steadily. By contrast, some European countries have fallen into recession. More are expected to follow. Britain slid into recession after the enactment of spending cuts and tax increases.

Sung Won Sohn, an economics professor at California State University’s Martin Smith School of Business, cautioned that investors may not always be so willing to finance U.S. deficits.

“With the European debt crisis, we are looking at a movie that could happen to us,” Sohn said. “We should not be pointing a finger at Europe. We have been doing the same thing — living way beyond our means.”

Obama’s proposed budget would initially boost the U.S. economy though later in this decade it would become a drag on growth, the Congressional Budget Office said April 20.

Between 2018 and 2022, the administration’s plan would cut growth by 0.5 percent to 2.2 percent, according to the analysis.

Obama would let the George W. Bush-era tax cuts expire for couples who earn more than $250,000 and set a 30 percent tax rate on those making more than $1 million.

Mitt Romney, the presumptive Republican nominee, has proposed broad but largely unspecified spending cuts. He opposes Obama’s tax increases. Romney has also said he would like to cut the federal work force by 10 percent.

The last time the government recorded an annual surplus was 2001. Deficits returned after Bush won approval for broad tax cuts, pushed a major drug benefit program for senior citizens and launched wars in Afghanistan and Iraq.

The deficits grew further under Obama as the recession shrank tax revenue as unemployment rose and income fell.

Private economists said they expect little deficit reduction to occur until after the November elections. The Bush tax cuts expire at the end of December. Congress also must make tough decisions about domestic and military programs.

Information for this article was contributed by Meera Louis and Chris Middleton of Bloomberg News and by Martin Crutsinger of The Associated Press.

5/11/12

HELENA-WEST HELENA — In wrapping up the federal trial over whether state Senate district boundaries violate the Voting Rights Act, the attorneys for the plaintiffs and the secretary of state argued that giving black voters the chance to elect the candidate of their choice had not been a priority for the mapmakers.

But attorneys for Gov. Mike Beebe and Attorney General Dustin McDaniel disagreed. They also disputed testimony from the plaintiff ’s expert witness, who argued that District 24’s 52.88 percent black majority isn’t large enough to guarantee that black voters can choose the candidate of their choice.

The lawsuit seeks to prohibit Arkansas from using district boundaries approved last summer by the state Board of Apportionment and make the state draw districts that the plaintiffs say would better serve black voters in the eastern Arkansas Delta region, particularly in District 24.

The case is Future Mae Jeffers v. Mike Beebe. Plaintiffs in the case were part of lawsuits in the 1980s and 1990s that created some House and Senate districts where black voters are in the majority. These districts were created to account for lower rates of black voting caused by institutionalized bias and to enhance the influence of black voters.

The panel of three federal judges did not rule Thursday.

The lawsuit states that board members “drew that Senate plan with the intent and effect of diluting the voting strength of African American voters in northeastern Arkansas and denying them an equal opportunity to elect candidates of their choice to the Senate.”

The board is made up of McDaniel and Beebe, both Democrats, and Secretary of State Mark Martin, a Republican. The board is responsible for drawing new House and Senate district boundaries after the U.S. census.

District 24 includes all of Crittenden County and parts of Cross, Lee, Phillips and St. Francis counties. It has a black voting-age population of 52.88 percent.

Martin, who was represented by a separate attorney in the trial and was the only vote against the new Senate boundaries, largely sided with the plaintiffs in the case.

“Secretary of State Mark Martin’s position is that there has been a violation of the Voting Rights Act by the Board of Apportionment and the plan adopted by the Board of Apportionment for Senate District 24 deprives African American voters of the equal opportunity to elect the candidate of their choice,” Martin’s attorney, Asa Hutchinson, said.

Hutchinson, a former congressman, lost to Beebe in the 2006 gubernatorial election.

On Wednesday, the judges dismissed the charge against Martin that states that the secretary of state intentionally discriminated against black voters.

Hutchinson argued that the governor and attorney general’s priority was to put all of Crittenden County into the same district – despite the effect it would have on the district’s racial demographics.

“You cannot do that and meet your obligation under the Voting Rights Act,” he said. “That priority took precedence over the effort to maintain a majority-minority district.”

The lawsuit contends that the Senate district lines violate Section 2 of the Voting Rights Act of 1973 as well as the 14th and 15th amendments to the U.S. Constitution, which were ratified after the Civil War to protect blacks’ civil rights.

McDaniel and Beebe stated when they testified earlier in the week that they were most concerned with meeting other commonly held redistricting “principles.”

Those include that districts need to have less than 10 percent population variance; not be drawn solely based on race; be designed with all parts connected and compact; avoid splitting political entities such as cities; keep similar communities together; maintain the core of existing districts; protect incumbents; and minimize gerrymandering, which is drawing districts to protect a political party.

The plaintiff ’s attorney, James Valley, said the state tried to return the district to what it was before the original Jeffers case.

“There are many similarities between this case and Jeffers,” Valley said, calling the situation “same stuff, different decade.”

He said although the governor and attorney general testified that they hoped to maximize the black voting-age population in the district, they didn’t do so.

“We believe the Board of Apportionment has failed,” Valley said.

He asked the panel to halt voting in District 24 and the surrounding districts until new boundaries can be determined.

At no point in the four-day trial did a witness provide an exact percentage for what the black voting-age population needs to be so that the rate at which blacks vote is comparable to the rate at which whites vote. The black voting rate can be depressed by poverty and low education levels, plaintiff’s witnesses said.

In his testimony of behalf of the state Thursday, Jeffrey Zax, an economics professor at the University of Colorado in Boulder, sought to discredit the data and the analysis done by the plaintiff’s expert witness.

When they made up 60 percent of the voting-age population, blacks were still struggling to consistently elect black candidates to represent them from this section of Arkansas, electoral consultant Lisa Handley testified Tuesday.

Now, with blacks making up less than 53 percent of the voting-age population in newly formed District 24, it’s even less likely that black voters will have the opportunity to elect the candidate of their choice, she said.

Zax argued that Handley used flawed and at times incorrect data and that she should not have based her analysis on election results for legislative races from polling places inside the district.

Instead, he looked at state and national election results in four of the five counties that make up the district now to determine how those counties would vote if presented with the choice between a white and a black candidate. He did not use Cross County, where only a small percent of the district’s population resides. Some of the whole counties he considered include the disputed areas in the case, specifically the western portion of St. Francis County.

Valley argued that a high school student who knew algebra could do those calculations and said Zax didn’t actually analyze any data.

Zax said, based on his analysis, the candidate supported by black voters will always win races within these four counties.

“The black preferred candidate always prevailed, therefore there is no evidence, no credible evidence, of voter dilution,” he said.

Assistant Attorney General David Curran pointed out in his closing argument that the sitting senator, Jack Crumbly, D-Widener, is black.

“The idea that the old District 16 wasn’t working defies common sense,” he said.

Curran said the years the district was held by a white senator shows that the district was fair to both blacks and whites.

“That is what happens from time to time in an equal-opportunity race,” he said.

Zax said the legislative races analyzed by Handley are not good predictors of voter behavior in District 24 because all parts of District 24 did not take part in those elections.

Handley said the best way to predict behavior in a future legislative race is to examine past legislative races, not statewide or national contests.

Arkansas Democrat Gazette

5/10/12

LITTLE ROCK — Gov. Mike Beebe on Wednesday increased the general revenue forecast for the fiscal year that ends June 30 to allow for the budget enacted by the 2011 Legislature to be fully funded.

The change in the forecast means more state general revenue for the Medicaid program, the state’s higher education institutions, and some other state agencies, the governor said in a news release.

Legislative leaders generally lauded Beebe’s decision to increase the general revenue forecast for fiscal 2012.

Joint Budget Committee co-Chairman Sen. Gilbert Baker, R-Conway, said increasing the forecast is “a wise move” that will, among other things, allow the state’s higher education institutions to have $7 million more in general revenue this fiscal year and for merit raises to be granted to employees in some state agencies.

The increase in the forecast will increase general revenue for the state’s higher education institutions to $733 million, according to the state Department of Finance and Administration.

The increase in the forecast also increases general revenue by $15 million to $1.029 billion for the state Department of Human Services, which manages the Medicaid program.

But state Rep. John Burris, R-Harrison, said, “It proves once again that conservatives were right when we advocated for additional tax cuts in 2011 session. The sky didn’t fall, as some Democrats and bureaucrats predicted.”

Beebe spokesman Matt DeCample said state officials haven’t yet decided whether to allow state agencies to grant one-time merit bonuses to state employees for this fiscal year and the size of the bonuses if they allow the bonuses to be granted.

The maximum bonus allowed under state law is 4.5 percent and that maximum could be reduced, said Tim Leathers, deputy director of the state Department of Finance and Administration.

For fiscal 2012 and 2013, lawmakers have declined to provide funding for costof-living raises for the more than 30,000 state employees who work at agencies beyond the state’s higher-education institutions.

Richard Weiss, director of the state Department of Finance and Administration, said in a memorandum dated Wednesday to state agencies that the governor increased the general revenue forecast for fiscal 2012 in an amount sufficient to fund 100 percent of the A and B allocations under the Revenue Stabilization Act.

The state’s top budgetary priorities are reflected in Category “A” in the budget for fiscal 2012 enacted by the Legislature and the governor.

The first $4.564 billion of net general revenue goes to category “A” funds distributed to state agencies in fiscal 2012.

The B category distributes $31.9 million more to certain state programs, such as the state’s higher-education institutions and the Medicaid program.

Beebe increased the forecast for the net general revenue available for distribution to state agencies for fiscal 2012 by $39.4 million to $4.605 billion and that provides $31.9 million to fully fund the B category of the budget and $7.5 million more for the governor’s rainy-day fund, said Brandon Sharp, the state’s budget director.

The previous forecast projected $2.5 million for the rainy-day fund.

The $10 million in rainyday money will help with unforeseen costs in the coming months, according to the governor. The rainy-day fund totals roughly $18 million, said Sharp.

The governor also increased the forecast for gross general revenue to $5.798 billion for fiscal 2012.

In increasing the forecast for fiscal 2012, Beebe cited state Department of Finance and Administration reports that show a continued positive trend in tax collections, particularly for individual and corporate tax receipts.

Joint Budget Committee co-Chairman Rep. Kathy Webb, D-Little Rock, said increasing the forecast for this fiscal year “was the appropriate thing to do.

“Trends look good across the board and I was glad to see it,” she said. “I hope we save all the money we have for the Medicaid shortfall.”

Last week, state officials said state general revenue in April increased by $33.9 million over the same month last year to $718.2 million — the largest amount that the state has ever collected in one month — and the latest sign of an improving economy.

During the first 10 months of this fiscal year, gross general revenue increased by $201.1 million over the same period last fiscal year to $4.908 billion, according to the finance department.

Tax refunds and several other government expenditures come off the top of “gross” general revenue, leaving “net’ general revenue that agencies are allowed to spend.

During this 10-month period, net general revenue increased by $122 million over the same period last fiscal year to $3.905 billion, according to the finance department.

Nonetheless, Beebe warned last week that tough choices, either Medicaid cuts or new taxes, are coming in fiscal 2014 because of a projected state shortfall that could be as large of $400 million in the Medicaid program.