ANALYSIS: Proposed union-backed amendment would cost Arkansas taxpayers more than $1 billion per year
5 min read

ANALYSIS: Proposed union-backed amendment would cost Arkansas taxpayers more than $1 billion per year

Next Gen
May 13
/
5 min read

Right now across Arkansas, liberal activists are furiously gathering signatures to get a radical constitutional amendment on the ballot that would dismantle education freedom, violate religious liberty, open the door to indoctrination, and much more.

But perhaps the most overlooked and under-analyzed sections of the measure are also the most disastrous to taxpayers: The proposed constitutional amendment contains a set of massive unfunded mandates that could leave Arkansas taxpayers on the hook for more than $1 billion per year (and perhaps even more) with no plan to pay for these mandates.

These include taxpayer-funded programs such as:

  • Taxpayer-funded universal Pre-K;
  • Taxpayer-funded universal afterschool and summer programs; and
  • A new, taxpayer-funded general welfare program to families potentially making up to $94,000 per year.

This binding proposal conveniently omits any mention of how to pay for any of these massive expenditures, and doesn’t even estimate what the costs could possibly be. The authors of the amendment have likewise not released any cost estimates whatsoever. They’re “working on it,” they say.

But Arkansans have a right to know what these measures would cost them and future generations of Arkansas taxpayers. So we’ve done some estimating of our own.

In short, while there is room for disagreement on the below figures, 1) this is far more detail than the proponents of the amendment have been willing to provide, and 2) there is no room for disagreement on the fact that these programs would be massively expensive for taxpayers, would require tax increases on Arkansas families, and would eliminate any prospect of phasing out the state income tax.

UNIVERSAL PRE-K PRICE TAG: $350 MILLION PER YEAR

The largest expense in the proposal is access to universal pre-K/early childhood education for three years for every student in Arkansas. Notably, while proponents of this amendment decry education freedom as a “welfare program for the rich,” that’s exactly what this program would be—a new welfare program without any income limits, and for a pretty penny, indeed.

A 2006 study estimated that universal pre-K in Arkansas would cost taxpayers $226 million per year to fully implement. Adjusting this figure for inflation suggests an eye-popping $350 million in 2024 dollars. That’s $350 million every year in perpetuity. It would be cemented into the state constitution and pre-K would become a constitutional right.

How would it be paid for? We have no idea. The crafters of this radical amendment did not bother to tell the public or to include a payment mechanism in their amendment.

AFTER-SCHOOL AND SUMMER PROGRAMS PRICE TAG: $680 MILLION PER YEAR

In addition to universal, taxpayer-funded pre-K, the ballot amendment would create universal “afterschool and summer programs necessary for the achievement of an adequate education.” These programs also include no income limit or cap and instead would be universally available and constitutionally mandated. That means the “rich people” that education freedom opponents so often decry would have their child care subsidized by taxpayers.

How much would it cost?

Assuming an average weekly cost of $100 per week for after-school programs—multiplied by roughly 36 weeks of school and slightly more than 475,000 children—suggests that if every family took advantage of this initiative, it could cost $1.7 billion per year. 

But, even conservatively estimating that only 20 percent of students took advantage of this proposal, it would still cost roughly $340 million per year.

It is likely that universal summer programs would cost a similar amount per week and have a similar take-up rate, adding another $340 million per year on top of after-school costs.

In total, these two proposals—universal after-school and summer programs—would create an estimated $680 million per year in unfunded mandates that Arkansas taxpayers would have to shoulder.

VAGUELY DEFINED NEW WELFARE PROGRAM PRICE TAG: WHO KNOWS?

The proposed ballot amendment would also create a new, poorly defined welfare program for families “who are within 200 percent of the federal poverty line” (which could be reasonably interpreted as up to 300 percent of the federal poverty level, since the poverty line starts at 100 percent).

These concepts are not fleshed out in any further detail by the authors of this poorly crafted ballot amendment.

However, depending on the interpretations of lawmakers, this one item alone could add tens of millions more—if not hundreds of millions more—that Arkansas taxpayers will be on the hook for, on top of the more than $1 billion in new spending they would already have to incur.

But much like Nancy Pelosi’s infamous comments on ObamaCare, it seems Arkansans won’t find out what’s really in it until after the amendment is passed. Let’s hope it doesn’t come to that.

BOTTOM LINE: THE COSTS COULD BE MUCH HIGHER AND THE AMENDMENT WOULD CEMENT A BLANK CHECK INTO THE STATE CONSTITUTION

Unfortunately, Arkansans won’t be given any clear understanding of what the costs are or how to pay for them when presented with petitions by far-left advocates. And if the amendment makes it to the November ballot, the spending provisions will remain as clear as mud. But these rough estimates alone show that taxpayers will be on the hook for hundreds of millions of dollars—exceeding $1 billion—if this radical amendment is adopted as part of the state constitution.

Just how much is $1 billion in context of the Arkansas budget?

It’s more than the state spent last fiscal year on the Arkansas Department of Agriculture, Department of Health, Department of Labor and Licensing, Department of Veterans Affairs, Department of Transformation and Shared Services, and Department of Energy and Environment combined.

One billion dollars is also equal to nearly one-third of Arkansas’s entire state income tax collections used to finance its general revenue spending.

But in reality, the costs could be much higher, depending on program rules, eligibility, benefit levels, and more, which are largely undefined in this proposal. Nonetheless, these programs would become constitutional rights for Arkansans. In this way, and many more, the proposal effectively would cement a blank check into the state constitution.

While voters are being told this amendment is only about “fairness” and “accountability,” the reality is that it proposes a series of massive new welfare programs and tax hikes on working Arkansans. It would also eliminate any prospect of phasing out the state’s income tax on workers, which the state is well on its way to doing.

Thanks in large part to Joe Biden’s inflationary policies, Arkansas taxpayers are already struggling. This union-backed amendment would add insult to injury and fasten this liberal wish-list into Arkansas’s constitution.

Image of the story authorHayden Dublois
Visiting Economist

Hayden Dublois is the Visiting Economist at Opportunity Arkansas. His primary research areas are welfare, health care, workforce, unemployment, and tax policy.

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