Evangelical Outpost: CFG Rebuttal

Check out this great article written by Joe Carter on his blog Evangelical Outpost. He writes a great rebuttal to all of these group that keep attacking Gov. Huckabee's fiscal record. It is a long article, but it is well worth it.

Fiscally Flawed? -- A Rebuttal to the Club for Growth

After being elected Governor of California in 1967, Ronald Reagan reneged on a campaign promise and signed into law the single biggest tax increase in the state's history: $1 billion. (At the time, the total state budget was only about $5 billion. Adjusted for inflation and population growth, the increase in today's dollars would be $10 billion.)

If the Club for Growth had been around in 1980, Reagan might not have become President. The influential fiscal conservative group would surely have done everything in their power to prevent the Gipper from gaining the nomination. They would have attempted to derail Reagan's campaign just as they are now doing to Gov. Huckabee.

For several months the Club for Growth has been attacking Huckabee's bona fides as a fiscal conservative. In the process, they've slandered the Governor's record, deceived numerous trusting conservatives, and cast doubts on the organization's honesty and trustworthiness. It's a disgraceful situation made all the more shameful by our continued willingness to be duped.
In January when Huckabee announced he was forming an exploratory committee, the CFG released a white paper on the Governor's record. (Oddly, Huckabee was the first candidate scrutinized even though he entered the race after McCain, Giuliani, Brownback, and Romney. For some reason, the CFG thought he was worthy of moving to the head of the line.) The following is an analysis of their white paper examining the question, "Is Arkansas Governor
Mike Huckabee a Pro-Growth, Economic Conservative?"

The CFG begins by grudgingly admitting Huckabee's accomplishments:
Governor Huckabee touts himself as an economic conservative, writing in his biography that he "pushed through the Arkansas legislature the first major, broad-based tax cuts in state history" and "led efforts to establish a Property Taxpayers' Bill of Rights" early on as governor (Arkansas Times 09/22/05), but he only offers a small piece of the picture. It is true that Governor Huckabee fought for an $80 million tax cut package in 1997 that was passed by the Arkansas legislature (Cato Policy Analysis No. 315, 09/03/98); cut the state capital gains tax in 1999 (The Commercial Appeal 02/29/99); and passed the Property Taxpayers' Bill of Rights in the same year, limiting the increase in property taxes to 10% a year for individuals and 5% per taxing unit (AP 03/16/99).

Before the CFG attempts to downplay these significant actions, let's take another look at what they've admitted he was able to accomplish:

Pushed through a Democrat legislature the first, major broad based tax cuts in the state's history.

Pushed through a Democrat legislature an $80 million tax cut package.

Cut the state's capital gains tax by 25%.

Established a Property Taxpayers' Bill of Rights

Limited the increase in property taxes to 10% a year for individuals and 5% per taxing unit

Here are a few that they left off the list:

Eliminated the income tax for families below the poverty line.

Increased the standard deductions.

Eliminated the marriage penalty.

Eliminated bracket creep by indexing the income taxes to inflation, thereby preventing taxpayers from moving into a higher bracket when their paychecks increase due to inflations.

Doubled the child care tax credit.

Eliminated capital gains tax on the sale of a home.

Now let's move on to the hit piece section of their analysis:

However, his record over the rest of his ten-year tenure tells a starkly different story.
A starkly different story? They imply that Huckabee made some radical tax increases that offset the cut in capital gains, the $80 million tax cut, and the other fiscally conservative policies. As you'll see, though, they have to dig deep to come up with any damning evidence to build their case:

Immediately upon taking office, Governor Huckabee signed a sales tax hike in 1996 to fund the Games and Fishing Commission and the Department of Parks and Tourism (Cato Policy Analysis No. 315, 09/03/98).

According to the Cato report cited:

Upon taking office in July 1996, Huckabee immediately backed a 1/8-cent sales tax hike to fund the Games and Fishing Commission and the Department of Parks and Tourism. The voters enacted that hike as a constitutional amendment in November 1996.Huckabee didn’t "sign a sales tax hike." An overwhelming 80% of the voters chose to do so through an amendment to their state's constitution.

Notice they also left off the rest of what Cato said:

In his first budget, however, he redeemed himself by proposing a sweeping overhaul of Arkansas's archaic income tax system. The $80 million tax cut package was enacted in 1997 and became the first broad-based state tax cut in more than 20 years. It increased the standard deduction, eliminated the income tax "marriage penalty," and indexed the state tax brackets for inflation.

He supported an internet sales tax in 2001 (Americans for Tax Reform 01/07/07).
Indeed, Huckabee joined 43 other governors in sending a "strong and unified message to Congress: deal fairly with Main Street retailers, consumers, and local governments."
The letter said, "If you care about a level playing field for Main Street retail businesses and local control of states, local governments, and schools, extend the moratorium on taxing Internet access ONLY with authorization for the states to streamline and simplify the existing sales tax system. To do otherwise perpetuates a fundamental inequity and ignores a growing problem….The loophole creates serious budget problems for schools, states, and local governments. A study estimated that states could lose as much as $14 billion by 2004 if they are unable to collect existing taxes on Web-based sales. Nearly half of state revenues come from sales taxes."

So Huckabee wanted his state to be the one to determine whether sales taxes were collected from goods sold within the state. Where are the defenders of federalism on that issue?
He publicly opposed the repeal of a sales tax on groceries and medicine in 2002 (Arkansas News Bureau 08/30/02).

What the CFG fails to note is that Arkansas law prohibits deficits and requires that the state budget be balanced. Because 89¢ of every general revenue tax dollar in Arkansas is spent on education, health, and human services, repealing that sales tax without instituting another tax would have required cutting needed services.

He signed bills raising taxes on gasoline (1999), cigarettes (2003) (Americans for Tax Reform 01/07/07), and a $5.25 per day bed-tax on private nursing home patients in 2001 (Arkansas New Bureau 03/01/01).

Again it should be noted that 90% of the state budget is spent on education, health, and human services. While the CFG are tax radicals that believe that such entitlements as education and highways should be done away with, most residents of Arkansas understand that taxes on gas are the way that revenue for road repair is generated.

In 2004, he allowed a 17% sales tax increase to become law (The Gurdon Times 03/02/04).
Notice the odd wording, "allowed…to become law"? Here is how the Cato Institute report describes it:

In response to a court order to increase spending on education, Huckabee proposed another sales tax increase, and the legislature sent to him a smaller sales tax increase with a corporate franchise tax to make up the difference. Hucakbee let it become law without his signature.
Complying with a court order is "allowing" something to happen?

He proposed another sales take hike in 2002 to fund education improvements(Arkansas News Bureau 12/05/02).

He wanted to raise funds to improve education? What is he, a Democrat?
In Arkansas, 49% of the tax revenue comes from Sales/Use taxes. Such increases were required to meet the legal requirement to balance the budget. Now I'm sure the CFG believes that balanced budgets are a bad idea. But that is something they should blame on the citizens of Arkansas rather than on the Governor.

He opposed a congressional measure to ban internet taxes in 2003 (Arkansas News Bureau 11/21/03).

So he opposed a federal measure that prevented the states from collecting taxes owed to them? Obviously, the CFG doesn’t have much use for the concept of federalism.
By the end of his ten-year tenure, Governor Huckabee was responsible for a 37% higher sales tax in Arkansas, 16% higher motor fuel taxes, and 103% higher cigarette taxes according to Americans for Tax Reform (01/07/07),…

A 37% increase annualized over 10 years is close to, if not less than, the annual rate of inflation. Why does the CFG not point that out. Are they intentionally being misleading? As Chris L. points out in the comments, this is a sales tax and thus not adjusted for inflation. I apologize for that error. I thought the CFG was using the percentages to be misleading, it didn't occur to me just how misleading they were willing to be. The CFG doesn’t provide the baseline tax rate so let's go with the current rate of 6%. If Huckabee increased the rate by 36%, then he raised the sales tax .0384 cents during his ten years in office. By using the percentage rather than the actual total increase, they are able to make it sound much more nefarious.
Also, a governor cuts income and capital gains taxes and they whine because he increased sin taxes in order to balance the budget?

…garnering a lifetime grade of D from the free-market Cato Institute.

I'm not sure exactly why fiscal conservatives should care how a libertarian think tank grades a candidate. Perhaps the CFG couldn’t find a conservative group that would aid them in their hit piece. Unfortunately, Cato's analysis is as weak as CFG's:

Thanks to a final term grade of F, Huckabee earns an overall grade of D for his entire governorship. Like many Republicans, his grades dropped the longer he stayed in office. In his first few years, he fought hard for a sweeping $70 million tax cut package that was the first broad-based tax cut in the state in more than 20 years. He even signed a bill to cut the state's 6 percent capital gains tax-a significant progrowth accomplishment. But nine days after being reelected in 2002, he proposed a sales tax increase to cover a budget deficit caused partly by large spending increases that he proposed and approved, including an expansion in Medicare eligibility that Huckabee made a centerpiece of his 1997 agenda. He agreed to a 3 percent income tax "surcharge" and a 25-cent cigarette tax increase. In response to a court order to increase spending on education, Huckabee proposed another sales tax increase.
After praising his accomplishments, Cato bashes Huckabee for proposing a sales tax to "cover a budget deficit caused partly by large spending increases that he proposed and approved…" Again, 90% of the Arkansas state budget is on education, health, and human services. I realize that the libertarians at Cato consider it blasphemous to have the state funding schools or paying the medical bills of the poor. But complying with state law in order to balance the budget and pay for such entitlements does not make a politician a "big-government conservative." (And they wonder why we don't put the libertarians in charge?)

The CFG then moves on to "spending":

Under Governor Huckabee's watch, state spending increased a whopping 65.3% from 1996 to 2004, three times the rate of inflation (Americans for Tax Reform 01/07/07).
That's odd. This week CFG president Pat Toomey claimed in an article at NRO, "…on his watch, and frequently at his behest, state spending increased by 50 percent, more than double the rate of inflation,…" Perhaps Toomey's ghost writer recalculated since his organization's last hit piece so let's use the latest figure. When Toomey says spending increased by 50%, that's 4.1%. Toomey notes that it was twice the rate of inflation, but ignores population growth (13.7% from 1990 to 2000). An increase in population means that there are more people who require--once again--education, health, and human services.

The number of state government workers rose 20% during his tenure (Arkansas Leader 04/15/06),…

CFG fails to note that the population also increased during that time. Someone has to teach the 449,000 public school children in kindergarten through grade 12 and the 100,000 students in college. Should the number of government workers--including teachers--decrease as the population increases?

…and the state's general obligation debt shot up by almost $1 billion, according to Americans for Tax Reform.

Let's put that claim in perspective: Arkansas spent $1.9 billion this year on public schools. An additional billion dollars could be accounted for in a 10% annual increase in the education budget. Considering that the population increased by 13%, that number seems remarkably low. Even if all other categories didn't increase at all, we should expect the education funding to increase by that amount.

The massive increase in government spending is due in part to the number of new programs and expansion of already existing programs initiated by Governor Huckabee, including ARKids First, a multimillion-dollar government program to provide health coverage for thousands of Arkansas' children (Arkansas News Bureau 04/13/06).

The ArKids First program provides health care coverage of Arkansas' uninsured low income children. If conservatives want to ensure that the Democrats remain in power for the next decade, let's publicly bash any politician that wants to provide health care for indigent children. Ironically, CFG includes a section on School Choice in which they claim that, "More competition in education can only lead to higher quality and lower costs." How can they support state funded education when they complain about complying with court-mandated tax raises to pay for said funding? How do they expect to pay for education when they oppose all taxes? And wouldn't increased quality require increasing the number, if not the pay, of the subset of government workers known as teachers? Does the CFG have any internally consistent logic when it comes to their critiques?

.(In order to limit the length of this post, I'll refrain from commenting on the Free Trade, Entitlement Reform, Regulation, Political Free Speech, and Tort Reform sections. They are either positive about him in those areas or having niggling concerns.)

I'm embarrassed that I initially relied on Andrew Roth's white paper when I formed my first impression of Gov. Huckabee. I'm even more embarrassed that others that have read this sloppy analysis believe it is a damning indictment. I've always considered The Club for Growth to be a respectable conservative organization. But their attempts to deceive their fellow conservatives by misrepresenting Huckabee's record have proven they are unworthy of such trust. Pat Toomey and his organization owe Governor Huckabee--and the rest of us--an apology for their attempted deception.

Permalink email: Joe Carter email this link trackback