May and April reports on the closely watched U.S. shipping industry suggest that the national economy may be struggling to maintain the pace that began in 2014.

The Cass Freight Index shows that May shipments were down 1.3% compared to May 2014, and shipment expenditures were down 4.2%. However, the May shipments were up 2.3% compared to April and are at the highest level year-to-date.

“May shipment volume and payments have reached high points for 2015. Both indexes have been rising for the last four months after a dismal January due to bad weather and delays at West Coast ports,” Rosalyn Wilson, a supply chain expert and senior business analyst with Pasadena, Calif.-based Parsons, who provides economic analysis for the Cass Freight Index, said in the report.

Cass uses data from $26 billion in annual freight transactions to create the Index. The data comes from a Cass client base of 350 large shippers.

Wilson also said the 2015 numbers are being compared against a healthy 2014 shipping cycle.

“2014 was the best year for freight since the Great Recession, with the first six months of 2014 especially strong, which tends to dilute the performance of freight shipments for the first five months of 2015,” Wilson wrote.

She said GDP growth has been slower in 2015, but that freight activity is doing well. She said it may take the U.S. economy more time “to ratchet back up from the dismal start” of early 2015.

The American Trucking Associations’ Truck Tonnage Index was up 1.1% in May and followed a revised decline of 1.4% in April. Year-to-date, tonnage was up 3.7%.
 
The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, was 0.3% better than April. And the non-adjusted truck tonnage is down 2.7% from January.

“The good news is that truck tonnage increased in May,” ATA Chief Economist Bob Costello noted in his report. “But tonnage is certainly not strong at the moment as factory output is soft and there is an inventory reduction occurring throughout the supply chain. I believe the inventory correction should end this summer and truck freight, helped by better personal consumption, will accelerate, which is good because I think it is unlikely factory output will boost truck tonnage much until later this year or next year.”

According to the ATA, trucking serves as a barometer of the U.S. economy, representing 69.1% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9.7 billion tons of freight in 2013. Motor carriers collected $681.7 billion, or 81.2% of total revenue earned by all transport modes.

Employment in one larger sectors tied to the national shipping industry is doing well. The federal Bureau of Labor Statistics estimated that jobs in the transportation and warehousing sector totaled 4.76 million in May, up from 4.747 million in April and better than the 4.614 million in May. Employment in the sector is up more than 14% compared to May 2010.

A recent letter from Sebastian County Prosecuting Attorney Dan Shue to state and local law enforcement leaders adds another legal opinion to the controversial “Open Carry” law that emerged from the 2013 Arkansas Legislative Session. And it’s an opinion appreciated by at least one former leader of a group that pushed for the law.

Act 746 signed into law in 2013 modified existing law to read: “(A) person commits the offense of carrying a weapon if he or she possesses a handgun, knife, or club on or about his or her person, in a vehicle occupied by him or her, or otherwise readily available for use with a purpose to attempt to unlawfully employ the handgun, knife, or club as a weapon against a person.”

Key language in the new law was “attempt to unlawfully employ” the weapon. Shortly after the law was signed, then Attorney General Dustin McDaniel said the new law did not allow for an individual to do more than possess a handgun within that person's personal transportation when on a journey outside of the person's residential county.

“In offering this conclusion, I must stress that Act 746 in no way modifies the rights and obligations conferred upon those individuals who have obtained a concealed handgun permit pursuant to the pertinent provisions of the Arkansas Code.”

University of Arkansas Associate Professor of Law Laurent Sacharoff and law student Jacob Worlow issued a report in early 2014 that said the law does allow for anyone to openly carry a weapon without a concealed carry permit. While suggesting that the Legislature made a mistake with the permissive language, the authors said "since practically anyone can reasonably say they intend to use the gun for self-defense, that would mean nearly anyone can carry a gun without a permit, open or concealed."
www.thecitywire.com/node/31886

Sacharoff and Worlow said it is possible the law will face judicial scrutiny, largely based on questions of legislative intent and also the history of similar laws in the state.

Responding to law enforcement requests for clarity on the law, Shue wrote in his June 23 letter that the law is essentially “a return to the state of the law in 1975 after the passage of Act 696 of 1975.” Continuing, Shue said the law approved in 2013 says possession of a weapon is not enough of a reason for law enforcement to make an arrest.

“Mere possession of the handgun, knife, or club is no longer enough. When there is no evidence of a ‘purpose to attempt to unlawfully employ’ the weapon, then there has been no crime committed, and no criminal prosecution can be undertaken. Hopefully this will assist you in your efforts to enforce the law,” Shue noted.

The letter was sent to numerous state and regional law enforcement officers, including Capt. Bryan Davis with the Arkansas State Police; Sebastian County Sheriff Bill Hollenbeck; Fort Smith Police Chief Kevin Lindsey; and Greenwood Police Chief William Dawson.

Fort Smith resident Steve Jones, a former Board Chairman of Arkansas Carry, has organized several successful “open carry walks” around the state since 2013 to challenge McDaniel’s interpretation of the law. He sent this comment to The City Wire after reviewing Shue’s letter.

"Prosecuting Attorney Daniel Shue, with this memo, has cleared up any confusion caused by then-AG Dustin McDaniel's disastrous July, 2013 official opinion.  In an effort to give anti-gun legislators cover for voting for Act 746, McDaniel issued an awful opinion that put all Arkansas law enforcement agencies in danger of costly lawsuits and bad arrests of law-abiding citizens, while pitting these same citizens against the police.  Sebastian and Crawford Counties are very lucky to have public servants such as Daniel Shue and Marc McCune."

Link here for a PDF copy of Shue's letter.

Fort Smith School Board President Dr. Deanie Mehl is confident the board will on July 27 officially vote to do away with the “Johnny Reb” themed mascot at Southside High School. And a former Southside graduate who began an online petition to stop the mascot change has had a change of heart.

A committee of the Board made news Tuesday (June 23) when it voted 6-0 to recommend a full Board vote“to discontinue the use of ‘Dixie as the Southside High School fight song in the 2015-2016 school year and to change the Southside mascot from the Rebel in the 2016-2017 school year.”

The change was fueled in large part by the national discussion about racial imagery following the tragedy in Charleston, S.C., in which nine members of the Emanuel African Methodist Episcopal church were shot and killed by Dylan Roof.

Mehl told The City Wire that the change of mascot applies to the Confederettes, the name of the girls volleyball team, and the Dixie Belles, the name for the drill team. Having two daughters who were Dixie Belles, Mehl says she understands the emotional attachment to the names and the mascot. And as “a retired mom committed to education” whose children enjoyed their Southside experience, she struggled with the change. She recognizes the tradition and heritage of the mascot but said such traditions and heritage don’t translate to a bigger world.

“Unfortunately, when we get outside the River Valley, Dixie and Johnny Reb have a very different connotation ... and that’s not what Fort Smith is,” Mehl said. “I don’t think Fort Smith is a community that endorses prejudice.”

What she doesn’t understand are people who say the Board made a “knee-jerk reaction” to the South Carolina tragedy in voting to change the mascot. She said she and other Board members have over the years had hundreds of discussions with parents and others about the mascot.

“When people say that the board did not talk to constituents or did not talk to students, that’s simply not true,” Mehl said Wednesday. “This is something the board has considered for quite a few years. I think the incident in South Carolina and other movement around the South (pushed the vote)… but it was time for the Board to do something about it.”

To that point, Mehl said the July 27 board agenda will include an “extended period of citizen participation” before the Board vote on the change.

Mehl said she knew opinions would be strong on the issue, but admitted surprise at how negative were some of the responses received. She said her home voicemail has a few “brutal messages” criticizing the vote.

“But that goes with being on a school board,” she said.

The school board leader also said Southside is more than just a mascot.

“We’re changing a mascot, we’re not changing a school,” she said.

Mehl does regret not talking to Southside Principal Wayne Haver prior to the committee vote. Haver has been principal of the school since 1982. He told 40/29 news following the vote that he was “disappointed the school board didn't even let me know this was a possibility.”

Mehl said Haver is a “phenomenal individual and the heart and soul” of Southside, and she “deeply regretted” not talking to him prior to the vote.

Another person with a regret is Zack Gramlich. Shortly after news broke of the committee, Gramlich created a petition at change.org to save the Rebel mascot.

“The only reason I believe anyone can see changing this is because of an emotional fueled decision. Not to mention the amount of money required to change everything to a different mascot. It's not only a waste of money, but it irritates people over the entire city,” noted the statement on the petition’s page.

But on Wednesday, Gramlich contacted The City Wire to recant his original position. He has deleted the petition page.

“Originally, I was irritated. Irritated enough to go through the process of creating a petition to change this. Since then, I have had time to think. After reading multiple articles online and after reflection, I believe that chang(ing) the mascot and song (is) the right thing to do. My current views are to change to mascot to the Marshals. Personally, it would reflect well the history of Fort Smith and it's not offensive to anyone,” Gramlich said in his note to The City Wire.

Continuing, he wrote: “I myself made a knee jerk reaction and looking back, it wasn't the right thing to do. The school board was voted into the positions for a reason. I once had a dream to go back and be a teacher at Southside, or maybe even a principal, to be a Rebel once more. But I could handle being a Marshal or whatever the school board decides is a good replacement for the mascot. As many have said before, it's not the name that matters, it's what was done there.”

As more prominence and recognition has been given to the state’s burgeoning startup and entrepreneurial community over the past few years, Arkansas still fell from six spots in a highly-watched national index that ranks new business growth and startup activity among the 50 states.

However, the state was still able to hold its spot as one of 32 U.S. states where startup activity gained momentum in 2015, according to the annual Kauffman Index released earlier this month.

The influential report, released earlier this month by Kauffman Foundation in Kansas City, analyzes and ranks start up activity in all 50 states. This year, the study also expanded its research to look at entrepreneurial trends nationally, at the state level, and for the 40 largest metropolitan areas of the United States.

And although startup activity tended to be highest in the western and southern states overall, the five states that ranked at the top of the 2015 Index were Montana, Wyoming, North Dakota, Colorado and Vermont.

“There’s been an explosion of entrepreneurship programs and events across the country in recent years, and while we don’t fully understand their impact, last year’s rebound in new business creation is a good sign,” said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation. “State and local leaders need to understand how many startups they have in their regions and who’s starting them so they can make decisions on how to build on what they currently have.”

ARKANSAS STARTUP FIRMS ON THE DECLINE
Arkansas fell from its spot at 26th in 2014 to 32nd in 2015. The report shows that the actual rate of new entrepreneurs across the state fell from last year’s 0.28% to 0.25% in 2015. That component of the index, which measures the percentage of the adult population in Arkansas that became a business owner in a given month, has declined year-over-year since 2006 when that number peaked at 0.41%.

Also, the number of startup firms in Arkansas per 100,000 residents as measured by the Kauffman index fell from 110 in 2014 to 105.9. A states’ so-called “startup density” is defined as firms less than one-year old employing at least one person besides the owner. According to data from the Kauffman report, the number of startup firms topped out in 1977 at a robust density of 285.8 per 100,000 residents.

Arkansas, however, held steady at 82.5% in the area of entrepreneur “opportunity share,” which measures the percentage of new entrepreneurs who were not unemployed before starting their own business.

In the Kaufmann Foundation report, it was noted that the Plains and Rocky Mountain regions have not been thought of as hotbeds of entrepreneurial activity. “But entrepreneurship is closely associated with economic growth, so it should not be surprising that some of the states seeing increased levels of startup activity have experienced high rates of real GDP expansion in recent years,” said Arnobio Morelix, research analyst at the Kauffman Foundation, and one of the studies’ authors.

Nationwide, the rate of new entrepreneurs varied from 0.17% – or 170 entrepreneurs per month for every 100,000 adults – in Wisconsin to 0.54 % in Montana. Western states, including California, Nevada and New Mexico, fared particularly well on the rate of new entrepreneurs in the 2015 Index.

Opportunity share also revealed a divergent range of results between states. At the low end in the 2015 Index, Alabama had a 69.0% opportunity share of new entrepreneurs, which means that approximately three in 10 new Alabama entrepreneurs came directly from unemployment. On the high end, Idaho had a 90.3% opportunity share, or just one in 10 new entrepreneurs starting their businesses when they were unemployed.

States’ startup density in the 2015 Index ranged from the low end of 81.4 startups per 100,000 people in West Virginia to the high end of 244.7 startups per 100,000 people in North Dakota.

Meanwhile, the rate of new entrepreneurs, one of the components of the Kauffman Index, varied widely across metropolitan areas, from 0.55% to 0.13%.

Austin, Texas, came out on top, at 0.55% rate of new entrepreneurs, or 550 new entrepreneurs per month on average, followed by Miami at 0.52% and San Jose, Calif. at 0.41%. San Jose – often considered the heart of Silicon Valley – ranked highest, with an opportunity share of 91.2%. On the other end of the spectrum was Nashville, with a 60.0% opportunity share.

Startup density, considered a key indicator of vibrant entrepreneurial communities, tracks new businesses rather than entrepreneurs. Metros’ density range among the top 40 metros stretched from the lower end – 93.9 startups per 100,000 people in the Cincinnati, Ohio, metro area – to the high end – 247.6 startups per 100,000 people in metropolitan Miami.

The Fort Smith business community may not be as open to reinstatement of a business license fee as some members of the Fort Smith Board of Directors might hope.

Putting the fee back in play is one of the ideas for addressing a looming shortfall in the city’s contribution for police and fire employee pensions. According to City Administrator Ray Gosack, the city’s LOPFI (police and fire pension) fund will be insolvent by 2021. And that insolvency was pushed from 2019 to 2021 by a recent Board vote to reduce benefits under the pension plan.

Fort Smith in 2004 implemented a higher 3.28 multiplier for the “LOPFI” pension plan, up from the base multiplier of 2.94. When the base multiplier was adopted, the city had an $11.863 million balance in its pension contribution fund and was adding $1.346 million annually to the plan. That was before the financial crisis of 2008, when the plan started withdrawing more money than the city was putting in, setting it up for the eventual insolvency projected for 2019.

“Our projections show that the city’s LOPFI Contribution Fund will be depleted in 2021. In 2015, we project that the city will spend $900,000 more than it receives in this fund. The annual deficit grows to an estimated $3.1 million by 2026,” Gosack noted in a recent memo to the Board.

As to a business license fee, the Board is looking at three options. The first option could generate $1.976 million. It would collect $20 per employee for businesses with employees from 1 to 500. The fee would be capped at $10,000.

The second option could raise at least $1.435 million with a plan that would charge a business $20 per employee from 26 to 500 employees with a cap at $10,000 a year. Businesses with 25 or fewer employees would not pay a fee.

The third option would charge a flat fee of $150 for all businesses and raise an estimated $761,550 a year. The cost to manage all three options is estimated to be $107,000 a year.

Fort Smith Director Tracy Pennartz said during a Tuesday night (June 23) Board study session that she has talked to a dozen business owners who didn’t like the idea of a business license fee, but would support it if necessary.

Greg Carman, president of Carman Inc., a Fort Smith-based regional trucking company, said he is not not fully up to speed on what will be needed to resolve the pension issue, but does think the Board and city staff should consider as many cuts as possible before coming to the community seeking new revenue.

The trucking firm employs 64, and would pay $1,280 a year under two of the three proposed business license options.

“You know, I’m not against paying more if it’s really needed, but I’d like to know more about what the city has done to cut any fat it may have in its budget. ... And maybe they have done that, but they really need to communicate that to us, you know, really talk to us out here running our businesses and trying to keep people working,” Carman said.

Tim Allen, president of the Fort Smith Regional Chamber of Commerce and executive director of  the Fort Smith Regional Council, provided The City Wire a statement that leaned toward opposing a business license fee.

“The Chamber is open to all viable options that balance the city budget while concurrently addressing a long-term solution to the pension shortfall. It is our hope that any revenue increases are evaluated diligently and balanced with comparable spending cuts. As we always do, the Chamber supports a business-friendly environment that encourages both job retention and job growth. Any increases in the cost of doing business in Fort Smith would hamper the economic development momentum we have enjoyed in recent year,” Allen said in the statement.

Sam Sicard, president and CEO of First National Bank of Fort Smith, was more blunt, saying that reinstating the business fee is not a good idea.

“I applaud the city directors for their willingness to address the difficult task of covering the shortfall in the pension plan to ensure its long-term solvency for those who are here to serve and protect us. This is going to necessitate making hard choices that families and local businesses have had to make in the past when adversity has come their way,” Sicard noted in a statement sent to The City Wire. “However, I do not believe it is a wise decision to raise fees on our community’s small businesses that provide the jobs our community desperately needs more of. This IS NOT the message we need to be sending to our community’s employers right now after they have been told their sewer rates will be tripling over the next few years, nor is it the message we need to send to those employers we are diligently trying to recruit to our community.”

City staff was asked by the Board to present refined options – including a potential push for a 1/2 prepared food tax vote to raise $900,000 a year – during a July 14 study session. The Board could vote on other options to address the pension shortfall at a July 21 board meeting.

The Video Wire anchor Dawson Meadows reports that Sebastian County River Rats is a leading contender for a new mascot idea at Southside High School in Fort Smith. As usual, Meadows has bad information.

In another questionable report from Meadows, he said the Fort Smith Board of Directors may try to resolve a pension funding problem by “legalizing the pot.”

The Video Wire is a collaboration between The City Wire and Things To Do In Fort Smith.

The iconic ball cap worn by Sam Walton, a miniature Wal-Mart truck and short biographical stories of Walton’s retail rise are among more than 600 artifacts woven into the fabric of the “American Enterprise” exhibit set to open July 1 at the Smithsonian Museum of American History in Washington, D.C.

Rob Walton, son of Wal-Mart founder, told shareholders on June 5 that one of his dad’s baseball caps was headed to the Smithsonian. Peter Liebhold, one of the three curators for the massive new exhibit, said the group spent more than four years focusing on the procurement of artifacts and biographies that would tell the story of America’s interaction with capitalism and democracy.

The exhibit traces the country’s development from a small, agricultural nation to one of the world’s most vibrant economies through business enterprise. The exhibit spans 8,000 square feet in the museum’s new Innovation Wing. According to the Smithsonian, “American Enterprise” seeks to convey the drama, breadth and diversity of America’s business heritage along with its benefits, failures and unanticipated consequences along the way.

Liebhold told The City Wire that in many respects Wal-Mart’s rise from a single Five and Dime store in rural Arkansas to a global retail giant closely mirrors the rise of American business which is explored through four main themes in the exhibit. The curators sought to tell the American Enterprise story using the themes of “Opportunity, Competition, Common Good and Innovation” throughout four chronological eras.
• Merchant Era (1770s–1850s)
• Corporate Era (1860s–1930s)
• Consumer Era (1940s– 1970s)
• Global Era (1980s–2010s)

“Wal-Mart fits easily into these themes. The innovation with supply chain that helped Wal-Mart grow into an international giant is featured in the Global Era. The earlier days of Walton’s expansion of the discount model is part of the Corporate Era,” Liebhold said.

The retailer also is featured for its ability to democratize commodities for the masses with programs like $4 prescriptions and expanded organic foods. Liebhold said Walton and his ball cap are also featured on the biography wall among other iconic innovators such as Alexander Graham Bell and his experimental telephone, Eli Whitney’s cotton gin and Michael Bloomberg’s Bloomberg terminal.

While Walton didn’t invent an apparatus, he did reinvent the retail shopping experience with the supercenter concept. Liebhold said all the historical artifacts and biographical entries help to illustrate manufacturing, retail and service as well as technology in American business.

Molly Blakeman, corporate spokeswoman with Wal-Mart, said the Walmart Museum worked with Smithsonian curators to ensure accuracy of Wal-Mart's story points as well as authenticity of artifacts such as Sam’s baseball cap, which was one of two he wore during his final days before dying in 1992.

Alan Dranow, senior director Walmart Heritage Group, told The City Wire that curators with the Smithsonian reached out to Wal-Mart some time ago and this is the first time Wal-Mart or any of its memorabilia has been on display in the prestigious national archive.

“It’s a big deal because having these artifacts in the Smithsonian officially records them into American memory. In working with the Smithsonian on this exhibit we have developed a relationship and agreed to participate in future exhibits where relevant,” Dranow said.

FITTING CAP
Andy Wilson, a retired executive officer of Wal-Mart Stores, said the baseball cap bearing the Wal-Mart logo of that time is a fitting artifact for the Smithsonian exhibit.

“I saw Sam put on the hat many times. When he put it on his head that automatically readied him for operational work. He got focused on the business at hand and it also brought him down to the customer level,” Wilson said. “That ball cap has become symbolic for the sustained culture at Wal-Mart because it symbolizes two things — people, Wal-Mart’s greatest asset, and the customers.”

“The cap was Sam’s trademark. He knew a lot about branding. He traveled with these caps, he always wore them and he gave them out to associates as keepsakes. He believed this cap made him more relatable to associates," Dranow said.

Liebhold said Wal-Mart is also featured in its “People in History” display that is modeled after Parade Magazine’s “What People Earn” edition. The first 50-year Wal-Mart employee, Valeda Snyder, who worked with Sam Walton at Ben Franklin Stores first before joining Wal-Mart, is featured in that display.

“You know Sam owned 17 Ben Franklin stores before he ever started Wal-Mart. Valeda Snynder was there working with Sam during that era and then joined Wal-Mart for a total of more than 50 years,” Dranow said. "The display is being shown tonight (June 25)  to a select group ahead of the July 1 opening. I was unable to get there but we have sent two representatives from the Wal-Mart Museum for the event. I do plan to visit later this year."

Wilson also said he plans to get to Washington in the coming months to see the exhibit that will be on display for a minimum of 20 years.

"It’s pretty amazing to see our Wal-Mart on this prestigious stage of American history,” Wilson said.

ALSO APPEARING
Also appearing in the exhibit is Sam’s Club CEO Rosalind Brewer. Liebhold said Brewer was visiting the exhibit June 25 for a sneak peek. She is part of a business women’s biography video display. Other women in the display include Janet Yellen and Elizabeth Patterson Bonaparte. Liebhold said Brewer’s video biography appears next to Yellen, the Federal Reserve Board Chairwoman.

He said in the retail innovation segment, Brewer is next to Jeff Bezos, founder of Amazon.com. Liebhold said Brewer is part of the new era for Wal-Mart and chosen for the exhibit because of her work in retail and the 22 years she spent working her way up the management chain at Kimberly Clark. She has also championed the plight of small businesses and education.

Liebhold said the exhibit also looks at consumer marketing campaigns targeted to diverse audiences, including teens, African Americans and Latinos. Familiar brand names from 1950s radio and television ads to today’s digital marketing showcase how marketers created new ways of thinking about the relationship between consumers and products.

Something else of interest to visitors from Arkansas is the rise of the poultry industry which is covered in the agricultural, food segment. Liebhold said Arkansas’ soybean industry and poultry sector were among the major accomplishments in commercial food supply as the nation moved from an agricultural economy to a consumer-based economy.

In a 6-3 ruling Thursday, the United States Supreme Court upheld the use of healthcare subsidies in connection with the Affordable Care Act.

The case, King v. Burwell, faced a question over the phrase, “Established by the State” and whether Congress intended the portion of the landmark health care measure to apply to federal and state health exchanges or just federal-run exchanges.

Voting in favor of King v. Burwell were Chief Justice John Roberts and Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. Voting against were Justices Antonin Scalia, Clarence Thomas and Samuel Alito.

The ruling means that nearly three dozen states, including Arkansas, will not have to change their current health exchange systems created under ACA immediately, although Arkansas lawmakers are studying major changes through a Health Reform Task Force.

In the 47-page opinion released Thursday morning, Chief Justice John Roberts, who wrote for the majority, argued that the use of the phrase “Established by the State” should be looked at in a more complete manner. Meanwhile, Justice Antonin Scalia, who wrote the dissent, said the reasoning behind the ruling was “absurd” and said the law should be called “ScotusCare.”

ROBERTS OPINION
In his opinion, Roberts said justices needed to look at the wording of a law in full before making a decision.

“It is instead our task to determine the correct reading of Section 36B. If the statutory language is plain, we must enforce it according to its terms… But oftentimes the ‘meaning—or ambiguity—of certain words or phrases may only become evident when placed in context,’” Roberts said. “So when deciding whether the language is plain, we must read the words ‘in their context and with a view to their place in the overall statutory scheme.’ … Our duty, after all, is ‘to construe statutes, not isolated provisions.’”

As for the law, Roberts said it provides a clear rule for federal agencies to follow.

“As we just mentioned, the Act requires all Exchanges to ‘make available qualified health plans to qualified individuals’ — something an Exchange could not do if there were no such individuals. And the Act tells the Exchange, in deciding which health plans to offer, to consider ‘the interests of qualified individuals . . . in the State or States in which such Exchange operates’ — again, something the Exchange could not do if qualified individuals did not exist,” Roberts said. “This problem arises repeatedly throughout the Act. See, e.g., §18031(b)(2)(allowing a State to create ‘one Exchange . . . for providing . . . services to both qualified individuals and qualified small employers,’ rather than creating separate Exchanges for those two groups). These provisions suggest that the Act may not always use the phrase ‘established by the State’ in its most natural sense. Thus, the meaning of that phrase may not be as clear as it appears when read out of context.”

“Third, we must determine whether a Federal Exchange is established ‘under [42 U. S. C. §18031].’ This too might seem a requirement that a Federal Exchange cannot fulfill, because it is Section 18041 that tells the Secretary when to ‘establish and operate such Exchange.’ But here again, the way different provisions in the statute interact suggests otherwise,” the chief justice wrote.

Roberts also said the decision on the law was directly in the hands of Congress.

“In a democracy, the power to make the law rests with those chosen by the people. Our role is more confined — ‘to say what the law is.’ Marbury v. Madison, 1 Cranch 137, 177 (1803). That is easier in some cases than in others. But in every case we must respect the role of the Legislature, and take care not to undo what it has done. A fair reading of legislation demands a fair understanding of the legislative plan. Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt. The judgment of the United States Court of Appeals for the Fourth Circuit is affirmed,” Roberts wrote.

SCALIA DISSENT
In his dissent, Scalia said he believes justices were attempting to save the law in spite of a clear reason not to.

“The Court holds that when the Patient Protection and Affordable Care Act says ‘Exchange established by the State’ it means ‘Exchange established by the State or the Federal Government.’ That is of course quite absurd, and the Court’s 21 pages of explanation make it no less so,” Scalia wrote. “Words no longer have meaning if an Exchange that is not established by a State is ‘established by the State.’ It is hard to come up with a clearer way to limit tax credits to state Exchanges than to use the words ‘established by the State.’ And it is hard to come up with a reason to include the words ‘by the State’ other than the purpose of limiting credits to state Exchanges,” Scalia said.

“[T]he plain, obvious, and rational meaning of a statute is always to be preferred to any curious, narrow, hidden sense that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover,” he said. “Under all the usual rules of interpretation, in short, the Government should lose this case. But normal rules of interpretation seem always to yield to the overriding principle of the present Court: The Affordable Care Act must be saved.”

Scalia wrote that the majority opinion used seven different criteria to uphold the law.

“It is bad enough for a court to cross out ‘by the State’ once. But seven times,” Scalia wrote. “Congress did not, by the way, repeat ‘Exchange established by the State under [§18031]’ by rote throughout the Act. Quite the contrary, clause after clause of the law uses a more general term such as ‘Exchange’ or ‘Exchange established under [§18031].’ See, e.g., 42 U. S. C. §§18031(k), 18033; 26 U. S. C. §6055. It is common sense that any speaker who says ‘Exchange’ some of the time, but ‘Exchange established by the State’ the rest of the time, probably means something by the contrast.”

Scalia also included a stinging rebuke for the court.

“This Court, however, saw that the Spending Clause does not authorize this coercive condition. So it rewrote the law to withhold only the incremental funds associated with the Medicaid expansion… Having transformed two major parts of the law, the Court today has turned its attention to a third. The Act that Congress passed makes tax credits available only on an ‘Exchange established by the State.’ This Court, however, concludes that this limitation would prevent the rest of the Act from working as well as hoped. So it rewrites the law to make tax credits available everywhere. We should start calling this law SCOTUScare,” he said.

“Perhaps the Patient Protection and Affordable Care Act will attain the enduring status of the Social Security Act or the Taft-Hartley Act; perhaps not. But this Court’s two decisions on the Act will surely be remembered through the years. The somersaults of statutory interpretation they have performed (‘penalty’ means tax, ‘further [Medicaid] payments to the State’ means only incremental Medicaid payments to the State, ‘established by the State’ means not established by the State) will be cited by litigants endlessly, to the confusion of honest jurisprudence. And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites. I dissent.”

Continued growth in Fort Smith and Sebastian County sales tax revenue may take some of the budget pressure off a Fort Smith Board of Directors that is struggling to find money for a pension shortfall and other needs.

The city has in the first five reporting months of 2015 collected $8.766 million on its 1% street tax program and the same amount on a 1% tax divided between bonds, Fire Department and the city’s Parks Department. The amount is up 7.15% compared to the same reporting period in 2014, and is 8.04% above the budget estimate.

The city’s 1% street tax program collected $1.677 million in the May report, up an impressive 11.66% compared to May 2014. The amount was up 12.78% over the budget estimate. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in June are from taxes collected in April and transferred by merchants to the state in May.)

Fort Smith Finance Director Kara Bushkuhl said the gain in year-to-date tax collections has delivered $652,763 in extra revenue compared to what was budgeted for the year.

GENERAL FUND SUPPORT
However, the key collection for the city is its portion of the 1% countywide sales tax. Revenue from that tax funds a majority of the city’s general fund budget, with much of that budget paying for police, fire and other essential city services.

The city’s portion of the countywide 1% sales tax generated $1.297 million in the May 2015 report, up 12.71% compared to May 2014, and up 13.22% over the budget estimate.

For the first five reporting months of the year, the city’s portion of the countywide tax revenue is $6.73 million, up 6% compared to the same period in 2014. The revenue for the first five months is also 6.34% above the budget estimate. Bushkuhl said revenue received above what was projected totals $401,175.

The extra revenue might help with budget problems, but more will be needed. The Board and city staff are working on ideas to address a looming shortfall in the city’s contribution for police and fire employee pensions. According to City Administrator Ray Gosack, the city’s LOPFI (police and fire pension) fund will be insolvent by 2021. The city needs $900,000 in this fiscal year to help cover pension fund obligations, and the annual deficit could grow to $3.1 million by 2026 if no remedy is found.

City Director and Vice Mayor Kevin Settle said the May report does suggest that the local economy “is picking back up.” However, he is waiting for a full six months of collections before getting too excited about the trend line.

“I’d like to see half a year. That gives you six months of trending before you start making some plans on it,” he said.

He did express concern that the heavy rains and flooding in May may have dampened consumer spending in that month. The city’s July tax report will show May collections. On the flip side, Settle said the July report may also reflect increased commerce resulting from the May 1-2 Steel Horse Rally that was held in downtown Fort Smith. The event was estimated to have been attended by 30,000 people.

TAX TRENDS, FRANCHISE AND PROPERTY TAX REVENUE
Countywide sales tax revenue to the city hit a record in 2008 with $16.61 million. It fell to $14.89 million in 2010, but has posted four consecutive years of gains since 2010, with the 2014 total reaching $15.625 million.

Collections during 2014 of the Fort Smith’s 1% sales tax for the street program topped $20 million for the first time since 2008. The 1% tax generated $20.099 million for the January-December reporting period, up 3.24% over 2013, and was above the budget estimate by 0.78%. However, collections for the past five years have been inconsistent. Revenue from the city’s street tax was down 0.87% in 2010, up 3.9% in 2011, up 1.36% in 2012, and down 0.69% in 2013.

The franchise fees received to date in 2015 total $1.824 million, down 5% compared to the same period in 2014. Year-to-date property tax revenue directed to the city’s general fund is $1.874 million, down 6.5% compared to the same period in 2014.

“The (franchise fee) revenues are basically the first quarter and it is difficult to determine if this trend will continue for 2015,” Bushkuhl said in a note to The City Wire.

She also said it is difficult to determine a trend with property tax collections because “there is no set history for the level of payments received from the county year to year.”

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2014: $40.198 million
2013: $38.938 million
2012: $39.210 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2014: $15.625 million
2013: $15.353 million
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million

The Arkansas Regional Innovation Hub and the Fayetteville Chamber of Commerce have formed a partnership to develop a new Innovation Hub in a building that the Chamber of Commerce is acquiring on the Fayetteville downtown square.

The announcement was made in downtown Fayetteville on Thursday (June 25).

Arkansas Gov. Asa Hutchinson applauded the partnership that he said will better serve start-up businesses in Northwest and Central Arkansas.

"This is the type of partnership that links our state geographically, economically and intellectually. It also signals to entrepreneurs and creative thinkers outside our borders that Arkansas is fast becoming the ‘innovation state,’" Hutchinson said.

The new Innovation Hub on the Fayetteville Square will be located at 21 West Mountain St., in the Bradbury Building which is being acquired by the Fayetteville Chamber of Commerce for an undisclosed amount. After renovations, the building will have 4,500 square feet of space dedicated to the Innovation Hub and its Launch Pad maker space. All current tenants, such as Tiny Tim's Pizza and Jammin' Java, will remain in their existing space.

The first phase of the new Innovation Hub will be the Launch Pad maker space on the lower floor of the renovated building. Like the original Launch Pad maker space in North Little Rock, the new facility will include 3-D printers, laser-cutting tools, and other equipment for rapid design and prototyping. The Innovation Hub will direct the creation of the new space and assist with the development and implementation of the programming there. Educational opportunities will be provided for people of all ages as well as support for local manufacturers and corporations that want to solve problems or provide additional training.

"We are very excited about this opportunity to work with the Fayetteville Chamber of Commerce to bring our facilities and programs to Northwest Arkansas," said Warwick Sabin, executive director of the Arkansas Regional Innovation Hub. "Our mission is to extend access to entrepreneurial education and resources across the state, and this new partnership with the Fayetteville Chamber is a major step forward in that direction."

Steve Clark, president and CEO of the Fayetteville Chamber, said there is clear evidence of growing entrepreneurial education opportunities and resources being created in the state.” He said this new partnership should strengthen the innovation ecosystem and further elevate the startup culture throughout Arkansas.

CO-WORKING, STEM, ARTS
The new hub in Fayetteville will be an extension of the Innovation Hub’s headquarters in North Little Rock. The new facility also will include entrepreneurial co-working space that has been lacking in Fayetteville since the re-organization of the Iceberg co-working space took place in early 2014.

The Silver Mine co-working space for entrepreneurs and small business owners looking for networking in the new facility is modeled after what is being offered in the Little Rock. It will also be the home to vertical business acceleration programs that will seed and mentor promising new enterprises from Arkansas and around the world. According to leaders of the effort, the Silver Mine will be able to incubate and give birth to a steady stream of new businesses, where ideas can connect with capital and other resources.

Another important feature of the new site is a STEAM (Science, technology, engineering, arts, and math) Lab that will be operated in partnership with the EAST Initiative to offer science, technology, engineering and mathematics education across a variety of ages and disciplines. STEAM is the new STEM, but with an arts component added in.

The STEAM education model has been championed by Wal-Mart managers like Rick Webb, senior vice president of global processes, who said there is an immense talent shortage in science and engineering fields. Webb said Wal-Mart has somewhere around 800 open positions for technology-related jobs. He said the retailer is forced to off-shore many projects because it can’t find the STEM-educated problem-solvers its needs.

Lastly, the new Innovation Hub also will feature the Art Connection, an afterschool and summer work program for high schools students designed to develop leadership and innovation through hands-on training in the visual arts industry. Modeled after the Artists for Humanity program in Boston, the Art Connection works with arts organizations, local artists, business owners, city government and others in the community to provide practical skills for under-resourced youth.

NEEDED ASSET
Most involved in the startup scene say there is a real need for a stronger startup ecosystem in Northwest Arkansas, despite the success that a few ventures born in the region are having today. More than 300 startups launched in Northwest Arkansas in the last five years, raising more than $190 million in funding to do so, according to Jeff Amerine, co-founder of Startup Junkie Consulting.

He said the bulk of that capital raised in recent years helped to put the region on the map as a viable place to start a business. Amerine works with startup ventures on everything from LEAN Canvas business planning to seed money investments. The position of the new Innovation Hub is in close proximity to the University of Arkansas where so many of the local startups originate.

Also recently locating on the Fayetteville Square is Hayseed Ventures, a startup capital investment group led by John James, co-founder of Acumen Brands. He founded Hayseed Ventures in March and moved June 1 into the Old Post Office on the Fayetteville Square. He, too will offer a small co-working space in the basement. James and his small team also recently launched a Kickstarter campaign to raise $25,000 for building renovations.

James is in the process of raising $6 million in investment capital for startups.

"We have more than half of the capital committed, and should close the rest of the round quickly," James noted in an e-mail.

Earlier this year he told the Northwest Arkansas business community that there is a major need for more venture capital in this region. Overtime he believes the region can raise $100 million in capital venture funds which is an effort underway by Newroads Ventures which James also advises.

He said $100 million is a challenge and he’s more than ready to do his part. James said at the time he had secured soft commitments for almost 30% toward the $100 million.

Arkansas severance tax collections fell more than 50% in May from year ago levels as the state’s rig count plummeted to single digits and drilling crews are leaving the state for other richer wet shale plays across the U.S., according to state severance tax and employment data and industry reports.

That has left state tax revenue for natural gas production at just over $4 million in May, down 54.5% from $8.8 million a year ago, according to monthly tax data compiled by the Revenue Division of the Arkansas Department of Finance & Administration.

Earlier in the week, the state Department of Workforce Services (DWS) reported employment in the mining sector that comprises the oil and gas industry had lost more than 400 jobs over the past year. That total is slightly ahead of the 230 jobs that DWS predicted the natural resources and mining sector would lose in 2015 in its annual Labor Market and Economic Report.

Additionally, oil and gas industry reports and data show that drilling crews from dry gas plays like the Arkansas Fayetteville and Barnett shales are migrating to more prolific wet shale plays that produce crude oil and natural gas liquids. For instance, Fayetteville Shale leader Southwestern Energy placed a total of 35 new wells into production at its newly acquired properties in the Northeast and Southwest Appalachian regions located primarily in Pennsylvania’s Marcellus shale play, one of the nation’s largest exporters of liquid natural gas.

Baker Hughes also reported last week that Arkansas’ rig count has fallen to its lowest level in more than a decade. The number of rigs operating in Arkansas as of June 19 is down to only five, a level not seen since the week of May 5, 2005. A year ago, there were 11 rigs actively drilling for oil and gas across the state of Arkansas.

According to state revenue officials, severance tax amounts reported by the state’s Revenue Office are based on the “revenue month, not the report month.” For example, tax payments received in July may not be due until August.

In 2009, the Arkansas Legislature raised the levy on natural gas production, applying tax rates of 1.25%, 1.5%, and 5% depending on the well classification by the Arkansas Oil and Gas Commission.

Officially, the fiscal year for the state of Arkansas begins on July 1 and ends on June 30. In fiscal year 2014, the highest monthly severance tax collection occurred in April, when state severance tax coffers brought in $9.1 million. The highest total in fiscal 2015 came in March when the state collected nearly $8.7 million in revenue on natural gas sales.

In fiscal year 2014, collections had state tax coffers brimming as severance tax revenues rose to their highest level ever since the state began keeping such records at $77.6 million. Through the first 11 months of the fiscal year, revenues for natural gas taxes total $69.5 million.

According to DFA’s severance data, tax collections were on a pace to top year ago levels through the first six months of fiscal 2015, but have since dropped off precipitously over the second half of the year. That drop-off coincides with announcements by Southwestern Energy and other drillers earlier in the year of plans to substantially cut spending in the unconventional Arkansas dry natural gas play. In March, Southwestern Energy announced it was slashing 40% of its investment in the unconventional Arkansas shale play. Australian mining conglomerate BHP Billiton has also cut its budget in the Arkansas shale play to only $100 million – a fraction of its original spending plans when it bought those assets for $4.75 billion in 2011.

Almost a year ago Wal-Mart held an “open call” for manufacturers to present product ideas. Hugh Jarratt showed up with a plastic taco plate. It’s been a hit. He just sent more plates to 49 Wal-Mart distribution centers, and he’s got two new ideas for the open call set for July 7 in Bentonville.

Jarratt, an entrepreneur and lawyer from Fayetteville, had his taco plate invention produced at PolyTech Plastic Moldings in Prairie Grove. He said the past year has been an exciting ride for his company, Jarrett Industries, and for PolyTech.

“We met with Wal-Mart several times after I got the purchase order the day of Open Call. We shipped a promotional order out to stores last fall and just finally got a place on the retail shelf in April and are shipping to 49 distribution centers for replenishment,” Jarratt told The City Wire.

He said working with Wal-Mart has been easier than he thought, so much so that he will back in front of buyers on July 7 at this year’s Open Call to pitch two more products — tailgate plates with the images of college mascots, and his patent-pending Wader Socks designed to keep feet dry while wearing waders for duck hunting or fly fishing.

“Wal-Mart deserves a lot of credit with this American manufacturing agenda because it not only is giving U.S. manufacturers new opportunities but it has also changed the attitudes to can-do, instead of make it cheaper abroad,” Jarratt said. “It is giving this country’s manufacturing sector an optimistic outlook and there’s a quality element that also instills a source of pride for the country.”

STAYING FOCUSED
Michelle Gloeckler recently told The City Wire that Wal-Mart Stores remains focused on helping return manufacturing jobs to the U.S., with the number of success stories growing and the 2015 manufacturing summit being moved to Bentonville to better connect buyers with products “that are ready to go.”

“It is still alive, well and very strong,” Gloeckler, executive vice president, consumables and health and wellness and U.S. manufacturing lead, said when asked about Wal-Mart’s focus on the manufacturing push.

Gloeckler has said this is a long-term process which is why the retailer expanded the initiative to 10-years and $250 billion in incremental spending toward products made or assembled onshore.

Since 2010, about 300 companies have returned to the U.S., according to the Reshoring Initiative, an industry-supported not-for-profit that focuses on bringing manufacturing jobs back.
Manufacturing jobs are growing to the tune of 646,000 between 2010 and May 2014. While that has not fully made up for the losses in earlier years, it is a step forward of 46% manufacturing output increases between 2008 and 2014, according to the U.S. Department of Commerce.

The Reshoring Initiative said 2014 was the first net gain of U.S. manufacturing jobs in at least 20 years. At least 10,000 jobs were added during the year. Better innovation and research and development, higher productivity, shorter supply chains, and faster response to changing market conditions are some of the reasons touted by the Reshoring Initiative as why reshoring makes sense.

A recent report published by Consumer Reports indicates that 8 in 10 Americans say they would rather buy an American-made product than an imported one. Also, more than 60% said they’re willing to pay 10% more for “American Made” products.

POLYTECH PROFITS
While Arkansas manufacturing has not fared as well as the national trend, Polytech Plastics of Praire Grove said it’s growing sales at a 25% clip year-over-year thanks largely to Wal-Mart’s effort to buy U.S. made products.

“We work with three Arkansas companies that are selling products to Wal-Mart and this has helped fuel us to a record month of sales in March, which we are going to break in June,” said John McCutcheon, co-owner of Polytech Plastics.

McCutcheon said he will attend the U.S. Manufacturing Summit being held in Bentonville on July 7-8, in hopes to attracting more possible jobs.

“Working with Wal-Mart on the taco plate deal has pretty much gone as planned. There has been a little hurry-up and wait, but that’s to be expected given a brand new item and the advanced time calendar retailer’s have to use,” McCutcheon said, adding that Wal-Mart buyers and manufacturing auditors inspected his plant to ensure it passed the requirements.

So far this year he said the plastics injection molding operation has added about 10 full-time workers bringing its employee count to 55.

“We are still hiring if we can find the qualified candidates. We have ordered two new machines with the help of our lenders and we are running 24-hour shifts, six days a week most of the time. This week is a 7-day run because of the demand we’re seeing from our customers,” he said.

This year McCutcheon said PolyTech should do $7.4 million in revenue, up from the $6.1 million it did last year. He credits much of that increase to Jarratt Industires and the taco plate, plastic lids produced for Hanna’s Candles sold to Wal-Mart, and for Smith’s Products of Conway who sells knife sharpeners to Wal-Mart.

McCutcheon said his tool shop inside Polytech also fashioned cutting tools for other local plastics company’s like Bentonville Plastics and Creative Things in Lowell that each sell directly to Wal-Mart.

“We don’t have any of our products to sell to Wal-Mart, but we are happy making products for our customers to sell. That’s our market,” McCutcheon added.

JARRATT INNOVATIONS
Jarratt said Polytech handles all the manufacturing and shipping to Wal-Mart for the taco plates but he hopes to expand with the Tailgate Plate if he can convince Wal-Mart to sell them. He’s working on a 100% sustainable plan for this product. He told The City Wire he has added a full-time “make it happen” (MIH) officer to his lean team.

“The greatest thing I did this year was to hire an ex-kindergarten teacher, Carol Cooper, to organize this business. She is my Make-It-Happen officer. This has afforded me more opportunity to concentrate on product development which is what I most enjoy,” Jarratt said.

Jarratt Industries sells several products in other retail outlets and also runs an online commerce marketplace with Amazon.com, which takes more time than Jarratt has as he already holds down a full-time job as a lawyer. He said the family also added a new baby, which has taken up the time of his other employee, wife Nicole.

In addition to the tailgate plates, Jarratt has high hopes for the wader socks.

“I scoured the country for the right manufacturer and I found them in North Carolina at Mayo Knitting Mill. They have manufactured products sold at Wal-Mart and have been great to work with on this project. My initial run is being delivered this week. I will find out soon enough if Wal-Mart is interested selling them,” Jarratt said.

Link here for more info on the upcoming open call event for manufacturers.

The United States Supreme Court ruled Friday that same-sex marriage in the United States is legal, granting marriage rights to couples on a politically divided issue. In the 5-4 ruling on Obergfell v. Hodges, the court ruled that the Equal Protection Clause of the 14th Amendment superceded both state and federal law on the issue.

Voting in the majority were justices Anthony Kennedy, Sonia Sotomayor, Elena Kagan, Ruth Bader Ginsburg and Stephen Breyer. Voting in the minority were Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Samuel Alito.

The Court has often ruled that marriage is a fundamental right a state cannot restrict without real justification. It has said that prisoners have the right to marry, and so do people too poor to make child support payments. In 1967, the court struck down state bans on interracial marriage. Gay marriage is legal in 36 states.

Discussion on the case was held April 28 in front of the U.S. Supreme Court Justices.

John Bursch, the lawyer arguing on behalf of the states to retain gay marriage bans, said in the April hearing that promoting families is a “legitimate interest” in Michigan’s right to ban gay marriage.

“Michigan has a legitimate interest in encouraging opposite-sex couples to enter into permanent, exclusive unions within which to have and raise children,” Bursch argued. “Having that diversity of both the mother and a father can be a good thing for children.”

Justice Ruth Bader Ginsburg, 82, asked Bursch the following question after his argument that heterosexual marriage was to ensure a stable relationship for procreation: “Suppose a couple, a 70-year-old couple, comes in and they want to get married? … You don’t have to ask them any questions. You know they are not going to have any children.”

She also said changing the definition does nothing to weaken the “rights” of heterosexual marriage.

Justice Anthony Kennedy said during the hearing he was not sure the issue was for the high court to decide.

“This definition has been with us for millennia, and I think it’s very difficult for this court to say, ‘Oh well, we know better,’” Kennedy said according to a Reuters report.

There have been several high-profile rulings and actions in Arkansas related to same-sex marriage.

In late April, the U.S. Eighth Circuit Court of Appeals delayed a decision on the constitutionality of Arkansas’ ban on same-sex marriage pending the outcome of the case before the U.S. Supreme Court. Approved by Arkansas voters in 2004, Amendment 83 banned gay marriage in the state.

In May 2014, Pulaski County Circuit Judge Chris Piazza ruled that Arkansas’ ban on gay marriage was unconstitutional. Licenses were issued briefly in some counties across the state, but a stay was eventually issued halting same sex marriages in Arkansas while the case goes through the appeals process. Following that, U.S. District Judge Kristine Baker ruled in November 2014 that the ban was unconstitutional, but stayed her ruling allowing for an appeal.

Pulaski County Circuit Court Judge Wendell Griffen ruled June 9 that same-sex couples who married May 10-16, 2014 in Arkansas as a result of Piazza’s ruling, must be provided the same access to state employee benefits as male-female married couples.

State policy leaders say Arkansans should look for “prudent progress” and an “Arkansas-centric approach” to health insurance reform in the wake of the Supreme Court’s landmark ruling last week in the King v. Burwell decision.

The U.S. Supreme Court on Thursday upheld the federal health care laws provision to allow subsidies for state and federal health insurance exchanges.
www.thecitywire.com/node/37974

Sen. David Sanders, R-Little Rock, and Cheryl Smith Gardner, the director of the Arkansas Health Insurance Marketplace, appeared on this week’s edition of Talk Business & Politics, which airs Sundays at 9 a.m. on KATV Ch. 7, in central Arkansas.

Sanders said legislators have been waiting on the Supreme Court case to eliminate potential options the debate may have gone. Now, attention can turn to specific directions.

“So now, I think for me, and a lot of the lawmakers, we will begin focusing more on on what is in the best interest from a policy standpoint,” Sanders said. “As we move forward, the state of Arkansas has the maximum amount of flexibility to determine its own future and its own fate with regard to health care reform. And the exchange does, in fact, play a large role.”

Gardner said the Arkansas legislature has always practiced “prudent progress” in regards to its health exchange decisions.

“With the state-based exchange, that is the mechanism whereby states can be innovative with their health care reform solutions, and frankly, it’s the only mechanism whereby states can retain what has always been what’s under the state’s purview: insurance regulation,” she said.

Sanders said the upcoming 1332 waiver – which gives states tremendous flexibility, if approved by the federal government – could be the “ultimate customization” for state health insurance reform.

Both guests agreed that lawmakers and the governor would push for an “Arkansas-centric approach” as a task force studies potential recommendations for reform by the end of this year.

The Health Insurance Marketplace Legislative Oversight Committee is scheduled to meet Monday at 10 a.m. in the Big Mac building on the state capitol campus.

Arkansas’ political leaders and activists had a wide range of reactions to the U.S. Supreme Court’s ruling on same sex marriage. Gov. Asa Hutchinson said he disagreed with the ruling but would direct all state agencies to comply. Arkansas Democratic Party Chairman Vince Isalaco said the ruling ensures that “government does not have the authority to discriminate against anyone who marries.”

The 5-4 U.S. Supreme Court ruling handed down on Friday (June 26) legalized same-sex marriage in all 50 states, with the majority opinion by Justice Anthony Kennedy arguing that the 14th Amendment’s Equal Protection Clause protected the rights of gays and lesbians to get married.

However, a series of dissenting opinions from Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Samuel Alito argued that the ruling pushed judicial activism to its limits.

Locally, here are statements from federal and state officials as well as several activists on the ruling:

U.S. Rep. Steve Womack, R-Rogers
“My views are rooted in my faith and are shared by the majority of my constituents and fellow Arkansans. I am disappointed that the Supreme Court took away our constitutional sovereignty to make decisions about the sanctity of marriage for ourselves, and I continue to believe that marriage is a sacred union between one man and one woman. Now, more than ever, we must work to ensure the closely held religious beliefs of millions of Americans are protected.”

Arkansas Democratic Party Chairman Vince Isalaco
“Today the United States Supreme Court ruled in favor of Marriage Equality. Those of us in the Democratic Party who support this vital issue realize the importance of this decision. Individual liberty is a core value of the Democratic Party. To those in our party who disagree with this decision, I want to take a second to make sure we all understand what this ruling does. This ruling does not mandate what religious groups must do. It mandates what government must do. That is to respect the rights of every single American. That government does not have the authority to discriminate against anyone who marries.”

“Today is a milestone for same sex couples and we celebrate with them. But it is also crucial to recognize that the job is not finished. LGBT Arkansans can still be fired from their jobs for who they are. Today, we have just as much religious freedom today as yesterday. But today all people are more free under the law. We should all celebrate that.”

Gov. Asa Hutchinson, R-Ark.
“Today the Supreme Court in a 5-4 decision requires the State of Arkansas to recognize same-sex marriage. This decision goes against the expressed view of Arkansans and my personal beliefs and convictions. While my personal convictions will not change, as Governor I recognize the responsibility of the state to follow the direction of the U.S. Supreme Court. As a result of this ruling, I will direct all state agencies to comply with the decision.”

“It is also important to note that the Supreme Court decision is directed at the states to allow and recognize marriage between two people of the same sex. It is not a directive for churches or pastors to recognize same-sex marriage. The decision for churches, pastors and individuals is a choice that should be left to the convictions of conscience.”

U.S. Rep. Rick Crawford, R-Jonesboro
“The opinion of five lawyers, not elected by the American people, should not and cannot define what millions of Americans affirm as the true and divine institution of marriage. Despite ruling two years previous that this decision rightly belonged to the elected officials in each state, the Supreme Court today removed the people’s right to uphold their own beliefs, which are based on deeply held religious and personal convictions, and instead chose to force their own definition of marriage onto the entire country.”

Craighead County Clerk Kade Holliday
“Myself, as well as, all deputy clerks in my office took an oath to uphold the Constitution of the United States regardless of our opinion of any issues that come through this office. Seeing as today the Supreme Court ruled 5-4 in favor of upholding Same Sex marriages as they have interpreted the Fourteenth Amendment of the Constitution to do so, we will begin selling these licenses here in Craighead County today (Friday) to be in compliance with the United States Constitution and United States law.”

Tippi McCullough, leader of the Arkansas Stonewall Democrats
“Honestly, my first reaction is just pure happiness. Tears just started running down my face,” McCullough told content partner KUAR.

Jerry Cox, director of the Arkansas Family Council
“Marriage has always been under the purview of the states. States have generally defined marriage generally in line with our Judeo-Christian heritage,” Cox said. “If a marriage can be two men or two women, why can’t it be three men, or four women?” Cox told KUAR in a telephone interview.

Arkansas Attorney General Leslie Rutledge
“Although this decision does not reflect the will of Arkansas voters, we are a nation of laws, and the judicial system has an important role to play. I am disappointed that the justices have chosen to ignore the role of the States to define marriage. The justices have issued a decision, and that decision must be followed.”

“We are continuing to review this landmark decision to make sure the full implications are understood and that implementation is consistent with the rule of law. I urge those seeking to marry to be respectful as the State seeks to follow this ruling. Moving forward, it is critically important that the rights of religious freedom be protected, and I am committed to doing so.”

A Pentagon official confirmed over the weekend that a decision on the $30 billion award for Joint Light Tactical Vehicle (JLTV) project remains on schedule for an award in the fiscal fourth quarter, which for the U.S. military concludes at the end of September, Talk Business & Politics has learned.

Local congressional sources have recently shared that they believe a winner of the hotly-contested defense contract will not be made in July, as has been previously predicted. An Army spokesperson said, however, the “source selection” timetable has always been at the end of fourth quarter for fiscal 2015.

Pentagon officials also shared a video podcast with TB&P of the recent Atlantic Council in Washington, D.C., where Honorable Heidi Shyu, Assistant Secretary of the Army for Acquisitions, Logistics and Technology, spoke briefly about the JLTV project at the Brent Scowcroft Center on International Security. Shyu, head of Army acquisition, refused to provide details of the JLTV decision-making process during the hour-long June 10 presentation on modernizing the U.S. military. However, she did offer that the selection of a winner for production of the next-generation, armed tactical vehicle is forthcoming.

“It (the JLTV project) is in source selection, so I really can’t say much about what is going on, but we are hoping to make an award probably late this summer,” said Shyu, whose office will choose the winning contractor.

According to the U.S. Army’s $127 billion budget request for fiscal 2016, which runs from Oct. 1 through Sept. 30 of next year, there are 12 critical programs that support mission command, joint combined arms maneuver, and broad joint mission support. The JLTV joint program between the Army and the Marine Corps makes the list as a contributor to the joint combined arms maneuver mission. Lockheed Martin, Oshkosh Defense and AM General are the three commercial contractors competing to win the JLTV program contract.

In April, Col. Michel Russell Sr., Army G-8 FD division chief for focused logistics, said the Army expects to exit the current engineering and manufacturing development stage of the JLTV competition, and down-select from three contractors to one as part of an acquisition decision in the fourth quarter. The winning contractor would build approximately 17,000 JLTVs for the Army and Marines during three years of low-rate initial production, followed by five years of full-rate production.

The Army plans to eventually purchase 49,099 JLTV’s, while the Marine Corps plans to eventually buy 5,500 of the vehicles. For the Army, initial operating capability on the JLTV is expected in the fourth quarter fiscal 2018.

Russell said in light tactical vehicles, the Army looks for three primary components: payload, performance and protection. Those three characteristics together, he said, are referred to as “the iron triangle.”

“What JLTV does is it meets the capability gap that allows us to bring all three of those back into balance,” Russell said. “We gain all that back, and it’s deployable in all the different environments.”

In a March report to Congress provided to Talk Business & Politics, the Army and the Marine Corps call for $456.9 million in procurement funding for 559 of the JLTV vehicles.

“The Army — on behalf of itself and the Marines — plans to select a winner and issue a single contract award in the late summer of 2015,” the March 9 report by the Congressional Research Service said.

Interestingly, the congressional report also states there are currently no foreign military sales planned for the JLTV, despite previous program participation from Australia and interest from Canada, Great Britain and Israel.

“Congress might wish to examine why these countries are no longer interested in the JLTV program, as foreign participation in these types of programs not only increases interoperability but can also benefit these programs from a cost perspective,” the report concludes.

In late May, the Arkansas Legislature overwhelmingly approved an $87 million incentive-laden financing package for Bethesda, Md.-based Lockheed Martin. Executives with the defense contracting giant said the company plans to bolster the state’s $87.1 million bond financing with a total investment of more than $125 million for infrastructure improvements in Camden, as well as reach job-creation and wage milestones set by the state during the next 25 years if it wins the military contract.

Members of the U.S. Supreme Court ventured far into the debate about the overall legality of the death penalty in a Monday (June 29) ruling that Oklahoma could continue with its process to carry out lethal injections. The 5-4 opinion in Glossip v. Gross should also move Arkansas forward with executions.

The genesis of the issue began when production of sodium thiopental or pentobarbital was limited or discontinued by drug companies. Some states, including Oklahoma, began using midazolam as part of a standard three-drug lethal injection process for death-row inmates.

21 Oklahoma death-row inmates filed in June 2014 a lawsuit claiming that the use of midazolam violates the Eighth Amendment. They argued that midazolam does not do enough to cover the pain associated with the second and third drugs in the process.

Florida officials were the first in October 2013 to use midazolam instead of pentobarbital in the injection process. Oklahoma has used this three-drug process to execute Clayton Lockett in April 2014 and Charles Warner in January 2015.

With the ruling, Oklahoma Gov. Mary Fallin (R) said she has set in motion the process to set execution dates for Richard Glossip, John Marion Grant, and Benjamin Robert Cole.

“The Constitution is clearly not intended to prohibit the death penalty by lethal injection or the use of the sedative midazolam,” Fallin said in a statement. “I appreciate the Court’s ruling, which upholds the letter and the spirit of the law as it is written. My thanks go out to Attorney General Scott Pruitt, Solicitor General Patrick Wyrick and their legal team for aggressively and successfully representing the state on this issue.”

ARKANSAS IMPACT
Arkansas Attorney General Leslie Rutledge said the Court’s ruling is an “important step” in allowing the state to move forward with pending executions.

“The U.S. Supreme Court today has once again ruled that capital punishment by lethal injection is constitutional. Today’s decision is an important step toward ensuring that executions can be carried out and that justice is served,” Rutledge said in a statement. “The Attorney General’s Office continues to handle ongoing litigation concerning Arkansas’s lethal injection statute, and I am confident the State will prevail in the end, allowing executions to resume.”

Rutledge said in late March that Arkansas has 32 inmates on death row with eight of those having exhausted all appeals. Arkansas has not had an execution since 2005.

The Arkansas Supreme Court ruled earlier this year that a process used by the Arkansas Department of Correction to select a chemical used in executions does not violate state law or separation of powers.

The Arkansas Supreme Court voted 4-3 in overturning a ruling by Pulaski County Circuit Judge Wendell Griffen that Act 139 of 2013 violated the state’s Constitution on the issue. In a 24-page ruling, Associate Justice Karen Baker said the law, passed by the Arkansas General Assembly, was legal.

U.S. SUPREME COURT DEBATE
In the 5-4 vote, Justices Samuel Alito, Anthony Kennedy, Chief Justice John Roberts, Antonin Scalia, and Clarence Thomas affirmed lower court rulings that the Oklahoma process did not violate the Constitutional rights of the inmates. Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor dissented.

In his dissent, Breyer questioned whether the death penalty has a valid purpose.

“Almost 40 years of studies, surveys, and experience strongly indicate, however, that this effort has failed. Today’s administration of the death penalty involves three fundamental constitutional defects: (1) serious unreliability, (2) arbitrariness in application, and (3) unconscionably long delays that undermine the death penalty’s penological purpose. Perhaps as a result, (4) most places within the United States have abandoned its use,” Breyer noted in the overall 127-page ruling.

Breyer closed his dissent by saying the Court should “call for a full briefing on the basic question.” Sotomayor was more brutal in her dissent, saying that the majority opinion theoretically allows states to “have petitioners drawn and quartered, slowly tortured to death, or actually burned at the stake: because petitioners failed to prove the availability of sodium thiopental or pentobarbital, the State could execute them using whatever means it designated.”

Alito said continual efforts to suggest the death penalty is a violation of Eighth Amendment rights continue to fail.

“Time and again, the People have voted to exact the death penalty as punishment for the most serious of crimes. Time and again, this Court has upheld that decision. And time and again, a vocal minority of this Court has insisted that things have “changed radically,” and has sought to replace the judgments of the People with their own standards of decency,” Alito noted.

In his dissent with which he took time Monday to read from the bench, Scalia chastised Breyer’s opinion by saying it contained a “gobbledy-gook” argument that had nothing to do with the Constitution.

Writing in the SCOTUSblog, Amy Howe said the death penalty debate is not over.

“Today’s decision ends the legal debate over the use of midazolam and clears the way for states to use the sedative in future executions. It almost certainly does not end the broader public debate over lethal injections and executions, particularly if any of those future executions go awry. But – absent a change of personnel – don’t expect the Supreme Court to re-enter the fray anytime soon,” Howe wrote.

Hospitality tax collections in the Fort Smith area are showing gains after getting off to a slow start for 2015. The tourism industry is doing well statewide, with collections of the state’s tourism tax setting records for January through April revenue.

Food and hotel tax revenue in Van Buren for the first four reporting months of the year are $144,380, up slightly over the $141,309 in the same period of 2014. April collections of the two taxes totaled $37,718, up 1.97% compared to April 2014. The city collects a 1% tax on lodging and a 1% prepared food tax.

“We continue to see an upward climb in revenue for 2015. We are beginning to see the same percentage of increase that we saw before the downturn in the economy in 2009. A good indication that the economy continues to recover and consumer spending habits for travel and dining are slowly returning to the post recession levels,” said Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission.

Hospitality tax collections in Van Buren during 2014 totaled $430,278, up 1.4% compared to 2013.

Fort Smith hospitality tax revenue in the January-April period is $252,701, up 4.6% compared to the same period in 2014. April collections were $69,565, up almost 7% compared to the $65,127 in April 2014. The city collects a 3% tax on lodging.

The Fort Smith Convention & Visitors Bureau collected $761,826 in 2014, up 4.2% compared to 2013.

Employment in the Fort Smith metro tourism sector posted records in 2014, but those levels have not been maintained so far in 2014.

Employment in the region’s tourism industry was 8,900 during April, down from 9,100 in March and below the 9,300 in April 2014. The sector reached 2014 employment highs of 9,300 in May, June and August. The numbers were recently revised by the U.S. Bureau of Labor Statistics. That revision lowered the top monthly 2014 employment in the sector from 9,900 to 9,300. The peak employment for the sector is 9,400 which was first reached in June 2007.

STATEWIDE TOURISM NUMBERS
Collections of Arkansas’ 2% tourism tax during the first four months of 2015 totaled $4.247 million, up 7.25% compared to the same period in 2014. Collections for each of the four months of 2015 set a new record for that month.

Collections of the tax in 2014 totaled $13.677 million, up 7.48% compared to the $12.716 million collected in 2013. The 2014 tally set a new record for the tax. Following are the past five years of 2% tax collections.
2014: $13.677 million
2013: $12.716 million
2012: $12.404 million
2011: $12.025 million
2010: $11.492 million

Employment in Arkansas’ tourism and travel industry also has had a record year in 2015. Sector employment in May was estimated at 113,900, up from 113,300 in April and well ahead of 107,500 in May 2014. Sector employment reached a record of 114,800 in February.

FORT SMITH HOSPITALITY TAX COLLECTIONS
2014: $761,826
2013: $731,057
2012: $746,182
2011: $708,141
2010: $678,934

VAN BUREN HOSPITALITY TAX COLLECTIONS
2014: $430,278
2013: $423,221
2012: $425,554
2011: $429,561
2010: $395,195

County clerks do not have discretion when it comes to issuing same-sex marriage licenses, Gov. Asa Hutchinson said Monday (June 29).

Hutchinson made the statement after being asked about social media comments by Sen. Jason Rapert, R-Conway, who has encouraged county clerks opposed to same-sex marriages to resist the U.S. Supreme Court’s ruling legalizing gay marriage.

“You cannot deny as a state or governmental entity a marriage license because it would be a same sex couple, and so the county clerks under my interpretation do have a nondiscretionary function of issuing those marriage licenses,” he said.

Hutchinson said granting a same-sex marriage license is simply a “ministerial act.” New software will not require clerks to sign the document. Hutchinson said churches and individuals outside of government have a First Amendment right not to preform a gay marriage. However, he said uncertainty remains regarding how the ruling overall will apply to private businesses and nonprofit organizations. He said the Religious Freedom Restoration Act passed by the Legislature earlier this year will provide a “framework for those issues to be resolved.”

Hutchinson welcomed a ruling by the U.S. Supreme Court Monday that the federal Environmental Protection Agency should have considered costs before setting air pollution limits in 2011. Hutchinson said the ruling would be significant for Arkansas.

“The EPA has had a habit of pushing regulations out regardless of the cost impact to the states,” he said.

He later said the ruling “is good news for those that are very concerned abut the burdensome EPA regulations and the cost that is to Arkansas.”

Hutchinson said he’s waiting to see the effects of today’s Supreme Court decision allowing certain states to use a three-drug combination in lethal injections that includes the sedative midazolam. Arkansas has not executed a prisoner since 2005 but plans to use a different combination that includes the drug phenobarbital when it resumes the practice.

Hutchinson said he has directed the Department of Corrections to initiate a search for the appropriate drugs, which have been hard to find. He expects more litigation on the topic.

John Woodham works for a company that provides benefit and human resources services to more than 300 companies in 38 states. His world got a lot busier following Friday’s (June 26) ruling by the U.S. Supreme Court that legalizes same sex marriage in all states.

In a 5-4 vote, Justices ruled that the Equal Protection Clause of the 14th Amendment topped state and federal law on the issue of same sex marriage.

The Court has often ruled that marriage is a fundamental right a state cannot restrict without real justification. It has said that prisoners have the right to marry, and so do people too poor to make child support payments. In 1967, the court struck down state bans on interracial marriage. Prior to Friday, gay marriage was legal in 36 states.

Woodham, an HR specialist with Van Buren-based SPMI, said the company is working with their clients to “get ahead of all the issues” with respect to employee benefits and HR policies.

“It is causing us to ensure that all of our benefit policies are compliant now. Of course, a lot of benefit policies were seeing the trend, and were already compliant to some degree to include domestic partners,” he said.

Much of the work is focused on reviewing policies and educating themselves and their clients on needed changes to ensure “no unintentional action is being taken.”

“One of those ... is that maybe some of the jokes they were telling as late as last week might now get them in trouble,” Woodham said.

He said there has been some pushback by employers on the issue. However, Woodham has seen several benefit and HR policy changes in more than 20 years, and knows there are times SPMI agents are “really, really aggressive” with some business owners and managers to ensure they comply with the law.

“We do get some pushback, but we do our best to educate them and provide some information and say, ‘This is the law, and you may not personally agree with it ... but it is the law now,’” Woodham explained.

The Little Rock-based law firm of Cross, Gunter, Witherspoon & Galchus also is advising employers to respond to the “sweeping impact” of the Court’s ruling. In a press release, the company identified four key changes employers must address:
• Provide leave to same-sex spouses if covered by the Family and Medical Leave Act;
• Review existing benefit plan documents to ensure that benefits are fully available to same-sex spouses;
• Provide COBRA benefits to same-sex spouses; and
• Update federal and state employee taxation information.

“We recommend a complete audit of your company's policies and practices to determine how your company can quickly come into compliance with the law,” noted the law firm’s press release.

Little Rock-based Stephens Insurance also sent out a note outlining other “practical implications” of the Court ruling, to include working with accountants to accurately post tax withholdings. The Stephens note suggested that companies adopt a broad interpretation when revising benefit and HR policies.

“Although the ruling does not explicitly extend to same-sex marriages performed out of the country, other federal regulations on the issue would indicate that employers should also recognize same-sex marriages performed validly wherever the marriage took place. It is likely that the Department of Labor and other agencies will issue guidance on this issue, but employers should be prepared to change spousal policies excluding same- sex marriages as soon as practicably possible.”