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Corporate profits next on agenda; cause is noble.

Corporate Profits Next On Agenda; Cause Is Noble

The tax-increase frenzy at the state legislature may not be over. Corporate income may be the next target. But it would be for a good and beneficial cause. Honest.

And it probably won't happen, since income taxes are buffered by a constitutional quirk requiring a three-fourths vote to raise them.

The proposal might have the backing of the Arkansas Business Council -- a.k.a., the Good Suit Club -- the all-star collection of the state's worldclass businessmen who are still together to advocate long-term educational and economic advancements in the state.

Raising the state's corporate income tax rates would come late in the session, if at all, and only if the legislature passes a bill that is considered by most educational progressives as one of the most integral to meaningful reform.

The bill would blend vocational-technical schools with community colleges, creating a new entity called technical colleges. An increase in the corporate income tax rate would be designed to pay for the upgrading.

The idea is that the state needs to do more for people than train them to be automobile mechanics or cosmetologists, which is not to say that those are not noble and needed professions.

The point is that while training people for specific occupations, the state should take the opportunity to require these people to take post-secondary educational courses in English, mathematics, applied sciences and history.

An ancillary advantage would be that technical colleges could be community centers where undereducated, disadvantaged adults could be trained for specific jobs while also being taught something so basic as how to read.

The purposes are to:

* Produce a better-educated population.

* Broaden the opportunities for many of our people.

* Occasionally encourage an able, otherwise uninspired individual to pursue a higher education.

* Create a system in which the state, while turning out automobile mechanics and cosmetologists, would be creating a base of people with sufficient post-secondary educational exposure that a high-tech industry might be willing to come to the state, believing our work force to be sufficiently sophisticated to adapt to computers, electronics and whatever else comes down the pike.

In 1988, the Arkansas Business Council commissioned a study of the state's educational system by the Carnegie Foundation for the Advancement of Teaching. The Foundation asserted that the state's top priority should be improving the elementary and secondary schools, which was no surprise and which has been the focus of most of our efforts for nearly a decade.

But the Foundation listed the aforementioned technical colleges as the second priority.

The third priority was teaching adults to read, and the technical colleges were deemed vital to that effort.

North Carolina has the model system of community technical colleges. One in seven North Carolinians has spent time at one of the colleges for something or other -- vocational training, post-secondary college courses that can be transferred to four-year institutions, specific industrial training or basic adult education.

In Arkansas, we have one proven model. It is Westark Community College in Fort Smith.

Two bills on the technical college subject have been chewed on during the current legislative session.

Both are compromise measures. Initial initiatives to turn all vo-tech schools into community technical colleges fell victim to the political mine field that is education turf in Arkansas.

The better bill is proposed by Sens. Allen Gordon of Morrilton and Nick Wilson of Pocahontas, among others, and is backed in the House by Rep. Jodie Mahony of El Dorado.

The lesser bill is proposed by Sen. Lu Hardin of Russellville, an excellent legislator who, in this case, may be overly influenced by a desire to protect the current system of governing of vo-tech schools, a desire based on the fact that his late father was the state's longtime vo-tech director.

The Gordon-Wilson-Mahony measure is further along at this writing, having passed the Senate and a House committee.

It would convert 10 of the state's 24 vo-tech schools to technical colleges, merging none, either with each other or with nearby community colleges. The 10 to be converted are the 10 whose directors, breaking with the protectionist view of the state Vocational-Technical Education Division, expressed an interest in being converted.

These 10 schools would embark on a six-year plan to convert to technical colleges, beefing up faculties and adding academic courses.

The 10 would be removed from the oversight of the Vo-Tech Division and made answerable to a technical college panel made up of six members of the state Higher Education Board, which would be expanded from 10 to 13 members.

Hardin's bill would call for all vo-tech schools to begin offering some academic courses, but would keep them under the existing Vo-Tech Division.

Both bills require additional money, and both sides advocate a second step that would raise the state's corporate income tax on the highest corporate incomes.

Currently, the highest rate of tax on corporate income is 6 percent, which kicks in after the first $25,000 of income. Ideas are to apply a flat 6 percent rate to incomes exceeding $25,000, or add a rate of 7 percent for incomes exceeding $100,000, or even a million dollars, or to do a half-percent variation of some of the above.

That would be worked out later.

The corporate income is the focus because it is believed that a better-educated and more-adaptable labor force will most directly benefit the state's successful businesses and industries.

My prediction is that effecting such a reform is job enough for the Arkansas General Assembly, and that raising the money is a likely candidate for two-year deferral.

But it all needs to be done.
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Title Annotation:Arkansas' corporate income tax policy
Author:Brummett, John
Publication:Arkansas Business
Article Type:column
Date:Feb 25, 1991
Previous Article:The Delta savior?
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