Lest you’re taken by surprise when you go to vote in the general election please note that, in addition to scads of political races, there will be two issues of statewide importance on your ballot. Referred Question No. 1 seeks voter approval for the Arkansas Development Finance Authority to issue up to $ 250 million in general obligation bonds. Proposed Constitutional Amendment No. 1 would legalize charitable bingo and raffles. I mention them now because, although the election is still about three weeks away, you might want a little time to think them through. Besides, early voting begins Oct. 24. Referred Question No. 1 has already been rejected once by voters, in a special election last December, undoubtedly owing to the fact that it shared the ballot with Gov. Mike Huckabee’s ill-fated multimilliondollar highway bond issue. Proponents have taken a lower profile this time around. Controversy has been avoided as a result, but then so has public debate. The bare minimum that voters should know about Referred Question No. 1 is that it authorizes ADFA to (1 ) extend existing bond debt and (2 ) acquire new debt through the issuance of new bonds. The popular name of Referred Question No. 1 is the Arkansas Higher Education Technology and Facility Improvement Act of 2005. Its passage would authorize the state to restructure about $ 158 million in bond debt remaining from a $ 300 million bond issue approved in 1989. At present, that old debt is set to be repaid by the year 2017. It isn’t yet known how many years beyond 2017 this debt would be extended if the measure is approved, but the state’s cost in servicing the debt would continue to run no higher than the current $ 24 million a year.
The Arkansas Higher Education Coordinating Board has proposed allocating $ 100 million of the proposed $ 250 million bond issue to this end, although the actual sum could be raised or lowered depending on interest rates, fees and the like.
As is the case with existing bonds, the costs of the new bonds would be paid from the state’s general revenue fund, which is also what finances most of state government. Under state law, bonded debt has first dibs on the general tax revenues that largely support state government, so in the event of an economic downturn or other financial setback, the bond payments would have to be met before any other program or agency could receive money from that account.
(I mention this only because of the state’s recurring legal problems in the area of public school financing. Given the billions of tax dollars taken in each year, it seems highly unlikely that things could get so bad that vital services would suffer because of the state’s bonded indebtedness. )
The rest of the proceeds from the proposed bond issue, $ 150 million, would go to finance technology and facility improvement projects in higher education. Of this, $ 100 million has been proposed for four-year universities and $ 50 million has been proposed for twoyear colleges.
The other issue on the ballot, proposed Constitutional Amendment No. 1, would make it legal as of Jan. 1, 2007, for certain charitable organizations to host bingo games and conduct raffles and authorize the General Assembly to adopt laws licensing, regulating and taxing these practices. Under the proposal, the phrase “authorized bingo and raffles organizations” is defined to mean non-profit, tax-exempt religious, educational, veterans, fraternal, service, civic, medical and volunteer rescue, firefighting and police organizations that have been in continuing existence for at least five years. They would be required to use all net receipts over and above the actual costs of their gaming activities only for charitable, religious or philanthropic purposes and could not use any of the receipts to compensate people who work for or are otherwise affiliated with their organizations. Lotteries have long been prohibited under the Arkansas Constitution, and this proposal would not change that. What it would do is exempt authorized charitable, religious and philanthropic organizations from the existing prohibition against lotteries as long as the net proceeds of the money they make from bingo games and raffles are used solely for those purposes. It would be nigh on to impossible to project how much the state coffers might benefit should voters ratify the proposed amendment, although presumably the Legislature would want to take advantage of its taxing authority, at least as regards pay-to-play bingo games. Those games have all but disappeared in recent years because of crackdowns by local authorities, although raffles remain commonplace.
—–––––•–––––—Associate editor Meredith Oakley is editor of the Voices page.
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