story by Ryan Saylor
rsaylor@thecitywire.com
One of the few races garnering attention in the run up to the May 20 primary is the race for House District 96. The race pits Republicans Grant Hodges and Damon Wallace against each other in the largely rural Benton County District.
Rep. Duncan Baird, R-Lowell, is term limited for the District seat.
Hodges and Wallace said the state's income tax is a large concern, with Hodges falling in line with gubernatorial candidate Asa Hutchinson's proposal to cut the income tax over time.
"I fall more in line probably with Asa Hutchinson's plan, which would be a gradual phase out of the income tax over time," Hodges said. " think that's the most responsible way to cut taxes. It's still funding the services we need but moving toward a more pro-growth tax code."
Wallace said he had not researched Hutchinson or other gubernatorial candidates' tax cut plans, but said he is "for getting rid of any taxes we can."
"But I also realize that Arkansans have a certain expectation of, 'We want to fund our schools. We want to fund parks and some of the amenities that just go with living here in our state.' The lakes, and the mountains and the things like that. If we're going to get rid of the income tax, we of course need to find a way to make up for that lost income."
He said that some may argue that lower taxes could result in increased economic activity and therefore more revenue for the state. Wallace said regardless of what action is taken, something must be done to reduce the state's income tax, which he said is higher than many surrounding states, including Texas and Louisiana.
Wallace also said he would like to see more work done to attract business to the state, though he said it would take more than just cutting taxes. It would also involve finding other things to sweeten the deal for companies who may be looking to establish or re-locate from another state, such as incentives and tax credits.
"I think it's a combination. It depends on what the businesses need. But we also have to be out there asking for those businesses. There was a situation out in Colorado last year where they passed some legislation that was hurtful for some of the gun magazine makers. MagPool was one of them I believe. My understanding…I never read anywhere, and of course I'm not on the inside, but I didn't read anywhere where we had sent any representatives to MagPool and said, 'Hey, we want you here in Arkansas.' I think we need to be proactive on that. It's not just the big companies, but even the smaller and mid-sized companies. If we go after them and say, 'We want you here. Tell us what you need,' then we can structure some kind of plan in order to help facilitate their relocation here to Arkansas."
An area on which both men agreed is tackling the healthcare issue in Arkansas, with Hodges saying he was for a repeal of the Private Option.
"The main reason being that we can't afford it and there's no plan to pay for it on the state level. Essentially, if there's no plan to pay for it, we're going to raise taxes, which no one wants to do, or we'll have to cut spending from somewhere else. It may come from education, prisons or Medicaid. Higher education could be on the chopping block, as well. So that's my main reason for opposing it, is the cost."
Wallace did not fully come out for a repeal of the Private Option, but instead said each mandate dealing with the federal healthcare laws need to be looked at in depth to determine whether the state should fund certain federal mandates. He said his background as a respiratory therapist would give him insight that others may not have.
"Having someone in there that understands what the relevant studies are behind certain regulations or mandates will help us decide whether we fund those mandates or not."
The race for the District 96 House seat has not been without some controversy, as The Arkansas Project has run stories on Wallace's $30,000 debt to the Internal Revenue Service, as well as a question over the legitimacy of his bachelor's degree from LaSalle Extension University in Louisiana, which was raided by the FBI as a degree mill and eventually shut down.
Hodges said it was time for Wallace to "tell the truth."
"What is the truth about his college degree? Is it fake? Has he been honest about it? I haven't heard him respond to some of the other issues, as well. I think it's time for him to comment on it. I think he owes the people of this district the truth."
Wallace addressed the topics, first explaining that his degree was completed via correspondence, claiming that it took two years of coursework to complete the degree in business administration. It wasn't until later that he said he found out that the school was not necessarily on the up and up. "As far as whether the degree is from a reputable school or not, no. But I put forth the effort and stuff and as far as I can tell, I did the due diligence that I could at the time to make sure that they were a valid entity. But things just didn't work out for them."
Regarding the IRS debt, Wallace said he was in the process of repaying the debt that he incurred from the purchase of an auto repair store, where he ended up racking up the IRS debts and penalties due to his never having run his own business with a staff before.
"A lot of these (employer-paid) taxes caught me off guard and basically after we bought the shop, it was at the beginning of the recession and I wasn't charging high enough prices for what I was paying the people. And basically it just snowballed. And of course, with the IRS if you get penalties and interest, it can get out of hand pretty quick. It has been as high as $60,000 or more. I can't remember the exact figure. But again penalties and interest. But I've got it down to about $30,000 and on a regular payment thing."
Statewide Republican and Democratic primaries, as well as judicial races, will be held May 20. The winner of the District 96 GOP primary will face Democratic candidate Tom McClure and Libertarian candidate Michael Kalagias in the November general election.