Paul Jacob

Everyone knows what great fun it is to win an election, but what good can come from losing a vote?

The answer to that question was enacted last week by Arkansas’s Legislature, when the state Senate joined the House in voting to lower the state sales tax on groceries by another half-cent — down to 1.5 percent.

This refreshing outbreak of sanity was not enabled by way of a GOP legislative takeover. Though it helped that Republicans enjoy a far larger minority in both chambers after last November’s election than at any time in my half-century of existence (roughly 20 years of it living in Arkansas), Democrats still control both houses of the legislature and the governor’s mansion.

The cause of Arkansas’s 2011 tax-cutting is actually a constitutional amendment petitioned onto the state’s ballot back in 2002.

That initiative, had it passed, would have abolished the state’s sales tax on food and over-the-counter medicine completely.

But, dubbed “Ax the Food Tax,” it did not pass.

The issue earned a spot on the ballot thanks to the state’s Libertarian Party, members of which drafted and filed the language. Also responsible were activists, including my older brother, Tim Jacob, who served as a spokesperson and brought his experience from a successful initiative effort on term limits. Finally, the financial support of Steve Stephens — a well-known philanthropist who serves as chairman of the Arkansas Policy Foundation, the state’s foremost think tank, which has long advocated cutting the tax — proved a major factor in the petition drive’s success.

Once the initiative made that ballot, it was fiercely debated. Or, perhaps, “savaged” is a more accurate word.

Every special interest group hoping to remain on the gravy train of state spending — the state’s Chamber of Commerce, Arkansas Education Association, Municipal League, Farm Bureau, Arkansas Hospital Association and the list goes on and on and on — joined the campaign against what was labeled Amendment 3 on that year’s statewide ballot.

Supporters of Amendment 3 at the time reported numerous illegal mixes of government operations and politics. Opposition literature was passed out at the offices of various state agencies and was sent home from school in the backpacks of children. A humongous sign against axing the food tax covered several stories of Arkansas Children’s Hospital, a landmark in downtown Little Rock — and mostly funded by the state. (The hospital is located just off the Wilbur Mills Freeway, named for central Arkansas’s most powerful pork-barreling congressman. Mills rose to chair the Ways and Means Committee before his career hit the ditch in 1974, when he was stopped for driving under the influence and his companion, Argentine stripper Fanne Foxe, fled the scene by jumping into the Washington, DC, Tidal Basin.)

When petitions had been submitted that summer, the Ax the Food Tax measure enjoyed better than 70 percent support. The sales tax is a regressive tax that hits the poor hardest — and when slapped on essentials such as food and medicine, cannot be avoided. Even opponents of the measure (i.e. supporters of continuing to get lots of money from state taxpayers) admitted the sales tax on groceries was one of the worst. Nonetheless, they spent lavishly on a full-fledged media barrage warning of something approaching an all-out apocalypse if government lost that tax revenue.

On Election Day, Amendment 3 was crushed, 61 to 39 percent. The voters had spoken and they didn’t ax the tax at all; instead, voters axed the ax-wielding anti-tax activists.

But a funny thing happened as the Ax the Food Tax initiative was being thoroughly rejected by Arkansas voters. Voters continued to think about the food tax. And they didn’t like it. They might even prefer to abolish it. But it must be accomplished with care, not abruptly.

Four years later, in the 2006 race for governor, both the Republican, U.S. Rep. Asa Hutchinson, and the Democrat, then Arkansas Attorney General Mike Beebe, campaigned on their desire and commitment to cutting and ultimately ending the state sales tax on food and medicine. Who was more committed? Who would cut it further and faster?

When Governor Beebe took office the sales tax on food and medicine was six cents on the dollar. Today it is 1.5 cents. Someday soon it may be zero. Abolished.

Not bad for a losing initiative.

Some complain about the initiative process . . . because they didn’t win. And they complain when special interests spend lavishly to sink a proposal they favor — as was the case with Amendment 3.

Yet, no political process, at least no worthwhile process, can guarantee a perfect outcome every time. The initiative process guarantees something else. It assures that issues cannot be bottled up and ignored by politicians. It doesn’t promise that the little guy will defeat big business or big labor or big anything, but that the little guy gets a chance to participate and a chance to win.

That’s a winning system . . . even when we lose.


Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.