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Arkansas Gov. Asa Hutchinson on inflation, gun control and why governments shouldn’t punish businesses

David Brancaccio, Alex Schroeder, and Rose Conlon Jun 13, 2022
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"I don’t believe it’s the role of government to punish private businesses because we don’t like what they say or do," Hutchinson told Marketplace. Nicholas Kamm/AFP via Getty Images

Arkansas Gov. Asa Hutchinson on inflation, gun control and why governments shouldn’t punish businesses

David Brancaccio, Alex Schroeder, and Rose Conlon Jun 13, 2022
Heard on:
"I don’t believe it’s the role of government to punish private businesses because we don’t like what they say or do," Hutchinson told Marketplace. Nicholas Kamm/AFP via Getty Images
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For today’s taking of the Economic Pulse, we examine the viewpoint of a state: Arkansas. The governor, Asa Hutchinson, is a Republican who thinks his party needs to take a different tack from that of former President Donald Trump.

In response to persistently high inflation, Hutchinson is calling for his state’s legislature to convene a special session to cut taxes, an attempt, he says, to put more money into residents’ pockets for things like gas and food.

“We drive in Arkansas, and whenever you have somebody on even a good wage rate, it’s being eroded by the rising fuel costs. It’s also hurting our agricultural community with diesel costs going up,” Hutchinson said in an interview with Marketplace’s David Brancaccio.

But he’s less supportive of suspending fuel taxes in order to compensate for high prices at the pump, as other states like New York and Georgia have done.

“I believe it’s a better policy in order to lower the taxes and adjust the payroll withholding so they can have immediate cash in their pockets now,” he said.

On jobs, Hutchinson took some credit for Arkansas’ low 3.2% unemployment rate.

“What we add to this is a climate in the state of growth; of competitive tax rates, removing regulatory burdens and recruiting industry that provides those jobs. And that is something that we are working very hard on and have had success in in this state,” he said.

Hutchinson weighed in on Florida’s use of tax policy to retaliate against the Walt Disney Company’s opposition to what opponents have called the state’s “Don’t Say Gay” bill banning educators from discussing sexual orientation and gender identity in primary schools. Florida Gov. Ron DeSantis, who could be one of Hutchinson’s political rivals if he seeks the Republican presidential nomination in 2024, signed the law penalizing Florida’s largest private employer in April.

“I don’t believe it’s the role of government to punish private businesses because we don’t like what they say or do,” Hutchinson told Brancaccio. “I think the legislation that the Florida House of Representatives and Senate passed was good; made sense to me. But let’s don’t punish a business because they speak out and disagree with something. That’s not the role of government.”

Hutchinson also spoke with Marketplace about his views on gun control legislation that would restrict military-style assault weapons after recent mass shootings in Buffalo and Uvalde, and whether state abortion policy following an expected Supreme Court decision overturning Roe v. Wade could affect business investment.

The following is an edited transcript of the interview, which was recorded Friday, before senators laid out a bipartisan framework for gun safety measures.

David Brancaccio:  I look at the low, low unemployment in your state, Governor, and I want to say, “nice job” — but Tennessee has the same low percentage of jobless people; Oklahoma’s unemployment rate is lower still — how much of that do you think is really you and your policies?

Asa Hutchinson:  Well it’s part of it, absolutely. Whenever you look at the fact that we have more people working today than pre-pandemic, that’s a very good sign of growth. And that, to me, is the most important measuring stick — is not just the unemployment rate, which in Arkansas is 3.2%, but it’s how many people are working. Because, for some time, we had people during the pandemic that left the workforce; we had a hard time bringing them back. But we’re doing that, and now we have, really, record levels of employment; people that are working and in the labor force. That’s good news, along with the fact that the wage rate is going up in Arkansas, which is important and a time of inflation. But, you know, from the standpoint of governor, what we add to this is a climate in the state of growth; of competitive tax rates, removing regulatory burdens and recruiting industry that provides those jobs. And that is something that we are working very hard on and have had success in in this state.

Brancaccio:  When thinking about the Arkansas economy, is it good or bad — I mean, we just talked about the good. But of course, there’s terrible inflation — gas prices, food prices — I know you wish Washington approached the inflation issue differently. But isn’t there anything you could do?

Hutchinson:  Well, there is. And first of all, it’s a real problem. In Arkansas, we have factory workers that might live 30 miles out in the country that drive into the factory to work. They drive into different cities. So we drive in Arkansas, and whenever you have somebody on even a good wage rate, it’s being eroded by the rising fuel costs. It’s also hurting our agricultural community with diesel costs going up. And so inflation is a challenge for us. Now, what can we do about that? You know, some states look at suspending the gas tax. But, you know, you don’t always have a correlation between the amount of suspension of the gas tax and the price that drops. I believe it’s a better policy in order to lower the taxes and adjust the payroll withholding so they can have immediate cash in their pockets now. And so that’s what we’re looking at: a special session to accelerate tax cuts; make them retroactive this year. And that will give some relief to those that are struggling with higher gas prices.

Brancaccio:  I mean, that is that approach, right? You could lower taxes. I mean, it could hurt your ability to make ends meet in the state, though, with the state budget.

Hutchinson:  Well, thank goodness that we have a balanced budget in Arkansas. We have a very healthy reserve fund, and we have an even more healthy surplus has been created. So because of what we’ve experienced and economic growth and creation of jobs, because of our management of state government, we’re in a very good financial position. And we can move down our tax rate to give more of what we’ve collected back to Arkansans who are hurting right now because of higher fuel prices.

Brancaccio:  OK, I’ve got a question now about the, you could call it the role of government in the private sector. It goes like this: We live at a time when the stakeholders of companies — customers, investors, employees — expect these companies to take a stand on the big social issues of our time. Now, Walt Disney Company did and the governor in Florida punished Disney using tax policy. Now in your state, it’s the headquarters of no less than Walmart. And I’ve met the CEO there, Doug McMillon — you must know the man; I think I’ve seen you do joint appearances. He wants to make the world a better place, when you talk to him. And if he someday didn’t like Arkansas policy, and were to say something out loud, would you, Governor, be inclined to slap Walmart with penalties Florida-style?

Hutchinson:  No, I would not. I don’t believe it’s the role of government to punish private businesses because we don’t like what they say or do. You know, we don’t want to be an obstacle to their growth. But we also don’t want to use the power of government to punish a private sector business because we don’t agree with something. You know, whenever you look at the role of business in corporate America — sustainability is an example; we have a lot of companies that are trying to reduce their carbon footprint. You know, some people might disagree with that. Let’s don’t punish them for it. I think they’re doing, actually, a good thing. Now, I think that Disney stepped into an area that they should not have stepped into. I think the legislation that the Florida House of Representatives and Senate passed was good; made sense to me. But let’s don’t punish a business because they speak out and disagree with something. That’s not the role of government. I think that we should restrain government. I think we have to limit its power in terms of punishing businesses.

Brancaccio:  All right. So you think Disney was wrong to oppose what some called the “Don’t Say Gay” Florida law, but you think that Disney shouldn’t get in trouble for taking a position?

Hutchinson:  That’s right. And I don’t mean they were wrong in opposing it. I don’t think they handled the whole thing — from a public relations standpoint; from a policy standpoint — well. I disagree with their position, because I think the legislation that passed — and of course your terminology is not right; it simply says the lower grades should not be taught sensitive topics; let’s save that for parents at home or the older grades. So it’s a very limited bill. Disney disagreed with that.  They have a right to do it. Let’s don’t go back and punish somebody because they speak out on something we disagree with. That’s called freedom in America; it’s also the role of the private sector. But, you know, I agree with the law that was passed. And so in Arkansas, you know, I would like to have businesses stay in their lane. Which is: let’s make a profit, let’s grow, let’s create jobs. And you know, they don’t have to get involved in all the social issues, but let’s don’t punish them, because we disagree with something.

Brancaccio:  We’ll soon get the U.S. Supreme Court’s decision on abortion. And I know you feel strongly that abortion rights should be restricted. Your state has that law ready for a near-total ban on the procedure. If the high court, any minute now really, does overturn Roe v. Wade, you think your state should — I’ve seen you say this — revisit the Arkansas law. In what way should it be revisited?

Hutchinson:  Well, you’re correct that if Roe v. Wade is reversed, then we have a trigger law that would go into place that would ban abortion except in the cases of the life of the mother. When that bill was passed by the legislature, overwhelmingly it reflected the view of Arkansas that we’re a pro-life state, I expressed disagreement, and I would have liked to have seen the rape and incest exceptions in place. And so time will tell as to whether the legislature in Arkansas and the people want that revisited. That is my view. And that debate will intensify if Roe vs. Wade is reversed and the role comes back to the states. And states are going to make different decisions on this. To me, that’s under the Constitution. The states have that prerogative. They reflect the public will and some of these public health issues. And so it’s going to be a debate in the states, and I think it will intensify if the Supreme Court passes down that ruling that gives the authority back to the states.

Brancaccio:  Do you think a state’s abortion policy could affect the ability of the companies there to attract the talent that they want to attract? I mean, really on both sides of the abortion issue?

Hutchinson:  I don’t think so. But it’s something that people feel strongly about one way or the other. And that debate has been going on for 40 years; it’s going to continue. And people have to express themselves in terms of their convictions, they have to act upon those beliefs, and they have to respect if somebody disagrees with them. I don’t think, you know — while we might be divided on the issue, let’s not have that create such division and hostility that leads to violence or other type of conduct that doesn’t help us to solve the important issues and to care for the unborn children but also the mother, in those circumstances.

Brancaccio:  Firearms after the mass murders in Buffalo and Uvalde: You are a Second Amendment man; you served on the National Rifle Association school safety task force after Sandy Hook, I remember. Where are you now, Governor, on possibly raising the age from 18 to 21 on the purchases of certain firearms?

Hutchinson:  Well, I mean, I made the statement that when you’re looking at the 18-year-olds acquiring AR-15 military-style weapons, that that’s a conversation that’s fair to have. And there’s some challenges whenever you look at addressing the law or raising the age limit to 21. First of all, California passed such a law and the Court struck it down as unconstitutional. So you’ve got constitutional concern there. And then secondly — and this is where I think the conversation is important, but I haven’t seen a solution — is that it’s hard to define, specifically, what weapon should be prohibited versus what should be allowed. I think it’s too broad to say simply semi-automatic, because that covers too broad a range of weapons that we have, or even hunting tools that we have. But it’s a discussion that I think is fair, after what we saw in Uvalde. We just have some issues coming to the language that would work or being able to do it in a constitutional way.

Brancaccio:  You say it’s hard to define exactly which ones would be subject to 21 years, but, I mean, that would be a negotiation. I mean, people of good faith could work it out. There are certain weapons you just look at right now, Governor, and you’d say, “I don’t want a person who just turned 18 to have that one.”

Hutchinson:  Well, sure — that’s why we have a conversation on it. But that’s the challenge. You know, some weapons that look military-style, in fact, are the same as a semi-automatic rifle. It just looks military-style. And so it’s hard to define the law. But if we can have that conversation, I think it’s a worthwhile discussion. We want to make sure that we keep the discussion on making sure that citizens can have the right to bear arms under the Second Amendment, but also to keep them out of the hands of those that are mentally ill or that are convicted felons, or for some other reason, pose a risk to others. So that is a discussion we’re having. I applaud the Senate bipartisan group that’s working on finding something that is common ground. And so that, to me, is a conversation that is helpful. And I applaud the senators that are engaged in that. I hope that they can come up with some things that we can agree upon that actually makes a difference.

Brancaccio:  Do you think it’s different this time? Do you think they’ll come up with something?

Hutchinson:  Well, I think they’re trying very hard. I think they’re genuine about it. I think it’s hard. These are not easy issues when you’re talking about constitutional rights; when you’re talking about, you know, also the desire to protect our young children when they go to school. And the debate has to be broad. The debate should, as we have talked about in Arkansas, include investment in mental health services, but also in better protection for our schools. Whatever it takes, we’ve got to protect those children. And we’re addressing it at the state level in terms of increasing the safety for our schools. But it also has to be support from Washington in terms of enhancing school safety; providing more resources for that to protect our children. But also, obviously, the conversation will go into the mental health area as well.

Brancaccio:  Yeah, I mean mental health in Arkansas — I’ve seen some statistics suggesting that you could do better. You’re ranked 40 out of 50. And you’re not the biggest state, but you’re not 40 — you’re like 36 depending on what kind of ranking. Would you want to see more investment into mental health services as well in Arkansas?

Hutchinson:  Absolutely. That’s a crying need for us, from addiction counseling to school counselors. And we’ve made a great deal of progress, as you’ve noted. For example, we are requiring our school counselors to spend 90% of their time in direct counseling with students versus doing administrative work. We probably need to enhance that even more in terms of those resources. And we have pending with the Biden administration now a waiver request so that we can put more mental health services in our local rural hospitals in Arkansas to help those that are challenged mental health-wise and addiction. And those are things that we need to do; that’s very important and will make a difference. For whatever reason, coming out of the pandemic, our nation is struggling. And I don’t think has been thoroughly vetted and studied yet, but we’re facing some challenges. And it’s clear from what we see and reflected in violence across the country. And we need to do more in terms of those mental health services.

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