HomeMy WebLinkAboutS-1422 Application 16A c MONDAY, APRIL 12, 2004 s • ArkamsasDemocrat " (fette,*
Loophole Thursday and Friday and un- ers didn't rely solely on an in -
Taxes: A regional comparison available for an interview to an- crease in the general sales tax toIf
swer questions about his pre- fund education reforms. 0
• Continued from Page lA pared comments, said Bill Pad- HB1105 was rejected Jan. 200'
public policy debate about fair dack, the chamber's vice presi- by the House Revenue and Tax-
tax policy, but also about look- Here's a look at corporate income tax rates in Arkansas dent for communications and ation Committee. It was opposed
SOURCE: Federation Federation of and six surroundingstates. The listed income tax rates and events. Russell "handles all tax by the state chamber.
ing at more progressive ways Tax Administrators
to restructure the tax system Mo. income tax brackets are corresponding. For example, in issues" for the chamber, Paddack Ultimately, the Legislature
so that everybody pays their fair Arkansas, the corporate income tax rate is 1 said. passed a $370 million tax in-
Huddleston pointed out that crease. All but 6 million of it
share for the future," said Rich I TERN. percent on the first $3,000 of taxable income, with p $
Huddleston, Arkansas Advo- OKLA. IARK ,;'-,,. the rates increasing at various intervals to a maximum the 3 percent income tax stir- came from an increase in the
cates' research and fiscal policy `ti.' ' of 6.5 percent on all taxable income of $100,000 or more. charge doesn't raise tax rates, state sales tax rate from 5.125 per -
director. _?MISS. In states that have a flat corporate income tax rate, that just the final tax due, if any. cent to 6 percent, and expansion
State government collected The surcharge, which took ef- of the sales tax to cover 15 serv-
rate applies to all of the corporation's taxable income.
feet for taxes due in 2004 on ices not currents taxed.
$22G2 million in corporate in-
TEXAS >LA.�— PP y
come tax in the fiscal year that p 1 . , r . 4 t income earned in 2003, applies The $6 million came from an
ended June 30, 2003. Individual only if tax is due by the indi- increase in the state's corpo-
income tax collections totaled TAX'RATES, TAX BRACKETS, NUNJBER OF vidual or business to the state. rate franchise tax.
$1.83 billion in the same year. The `Act 38 of the LOWEST TO HIGHEST ; LOWEST TO HIGHEST YSTATE BRACKETS The surcharge level in future Jackson, who is unopposed in
state's general revenue budget, First Extraordinary ° a years will be linked to the level his bid for a third term, has said
session of 2003 Arkansas* 1 /° to 6.5 /o $3,000 to $100,000 6
which pays for most government _ __ ------- ___ —__ _ of projected state revenue he plans to push reforms during
imposed a 3 percent
operations, is about $4 billion a surcharge ooincome tax Louisiana 4% to 8% $25 000 to $200,000 1 5 growth. It can stay the same or the next regular legislative ses-
year. owed by individuals and ° o go down, to the point of being sion that would result in a more
businesses. The Mississippi 3 /° to 5 /o $5,000 to $10 000 3 removed if growth reaches a cer- "progressive" tax system that
OPPOSING VIEWS surcharge; which took Missouri 6 25% (flat rate) _. - _1 tain level. It can't go up with- doesn't rely so much on the sales
The Arkansas State Chamber effect for taxes due in -- ---- -- ------ ------ - ---- ----------- out further legislative action.` tax to fund major initiatives.
of Commerce/Associated In- 2004 on income earned in Oklahoma 6% (flat rate) i 1 The surcharge will be re- Jackson didn't immediately
dustries of Arkansas, one of the , theses only if tax is — _ — -- — — moved for the fiscal year that return a message Friday seeking
due
individual
or Tennessee 6 5% (flat rate) 1
slate's most powerful business business. The surcharge " ' "" - starts July 1, 2005, if Gov. Mike comment on whether a version
lobbying groups, disputed the level in future years will Texas Huckabee's administration in of HB1105 might be a part of such
study's conclusions. be linked to the level of November 2004 forecasts that reforms. The next regular ses-
Ron Russell, the chamber's projected state revenue growth. The surcharge can ** Texas levies a franchise tax on businesses at the greater of 0.25 state revenue growth will reach sion convenes in January 2005.
president and chief executive of- stay the same or go down, to the point of being percent of a business' net taxable capital or 4.5 percent of its net at least 4.3 percent. Jackson and groups such as
fiver, noted that the study de- removed if growth reaches a certain level. The taxable earned surplus, which is calculated based on corporate If the administration projects Arkansas Advocates and the
scribes declining corporate in- surcharge can't go up without further legislative action. Income, officer and director compensation and other factors. revenue growth of 3.8 percent Winthrop Rockefeller Founda-
come tax proportions nation- but less than 4.3 percent, the sur- tion of Little Rock say sales tax -
wide. State rankings on measures of business taxes charge would be reduced to 1 es are paid disproportionately
"Yet it discounts the view that for fiscal 2003, among the 50 states, with 1 meaning a high burden and 50 meaning a low burden percent. by lower -income people.
this national trend is largely due If the administration projects Under current Arkansas law,
to such factors as the loss of
manufacturing jobs, the de-
pressed economy, and new laws
that encourage businesses to pay
income taxes as partnerships
as small business corporations,"
Russell said in a statement last
week.
Huddleston said a slumping
economy doesn't explain away
the drop in corporate taxes. In
2002, 58 percent of the 28,212
companies that filed Arkansas
corporate tax returns reported
no net taxable income and had
no state income tax liability the
Measure
Arkallaaa , Louisiana
1 Mississippi 1 M43ouii'i ; Oklahoma -Tennessee
Texas
Business share
i
of all taxes
37
5
21
39
23
11
6
1.
Buslnesstaxes
-....I..
..........-
per employee
451.
5....
25
46:......
28
38
13
Business taxes per dollar of
.
i
........
..........
private sector economic activity
31
12
11
t
43
�.
16
34
21
Business taxes per dollar of
capital income
---------- - ----
27
35
—
1 11
41
�
8
23
i 15
Change in business
:
I
taxes,2000-03
... _
42 _.
3
18
--......
T _ 26
22
35
16
Business share of tax
;
revenue growth, 2002-03
45
21
i 12
37
36
41
I 28
revenue growth of at least 3.3 each member company of a uni-
percent, the surcharge would be tary business group calculates
reduced to 2 percent. income separately, then com-
bines REPORTING' bins the members' Arkansas net
taxable income into a consoli-
One of the main recommen- dated net taxable income figure.
dations of the Advocates study HB1105 would have required
is for the state to require the Iil- members to file a return that
ing of a combined state corpo- combines the income for the uni-
rate income tax return by cor- tary group when determining the
porations that are members of a Arkansas combined net taxable
unitary business group. income.
This practice, known as "corn- Under HBll05, a corporation
bined reporting," is used by 16 would be presumed to be a
states, none of which border Ar- member of a unitary business
kansas. The study, which used group if the group of business -
study said.
SOURCE: January 2004 Ernst and Young study commissioned by the Council on State Taxation, cited in Arkansas Advocates for Children and
research by the Center on Bud-
es of which the corporation is
Four years earlier — "one of
FamiliesApril2004 The Vanishing Arkansas Corporate Income Taxreport.
get and Policy Priorities of
a member share functional in -
the boom years during the late
Arkansas Democrat -Gazette
Washington, D.C., estimated that
tegration, centralized manage-
1990s" — 53 }percent of corporate
Arkansas could increase its cor-
ment and economies of scale.
income tax filers showed no net
porate income tax revenue by
The study said that seven
taxable income and paid no state
for of the Arkansas Policy Foun-
describe corporations' means of
are the third -highest in a 13-state
$26 million to $52 million a year
states recently have considered
income tax, I-Iuddleston said,
dation, also was critical of the
lowering their income taxes
region, he said.
by adopting "combined report-
adopting this practice. Russell
The Tax Foundation in Wash-
Advocates study. The foundation
when trying to explain the prat-
Arkansas' top corporate in-
ing,"
said the study doesn't mention
ington, D.C., released a report in
is a Little Rock -based economic
tice to the general public.
come tax rate is 6.5 percent on
Rep. Phillip Jackson, R-
that none of those states enact-
2003 that classified Arkansas
research organization that has
"It doesn't matter to me if you
all taxable income of $100,000
Berryville, introduced a bill dur-
ed it, and no state has done so in
as one of the 10 states with the
tended to take a conservative
call it 'tax shelter; 'a favorable
or more. Louisiana's top corpo-
ing the recent special legislative
more than 20 years.
worst business tax climates in
stance on issues.
tax provision' — you can call it
rate tax rate is 8 percent on tax-
session on education, House Bill
Kaza said the policy founda-
the country, Russell said. Ar-
"Here's the fundamental dis-
whatever you want," he said.
able income of $200,000 or
1105, that would require affected
tion doesn't take positions on
kansas was ranked 48th out of
agreement: Bashing
job
"The fact remains is that it's a
more. The top rate in Mississip-
businesses to file a combined re-
specific pieces of legislation, in -
the 50 states in the tax burden
providers will not allow families
provision in the tax code that
pi is 5 percent on taxable income
turn. The state Department of
eluding HB1105.
and complexity of its tax system
to put more food on their tables,
companies with the expertise
of $10,000 or more.
Finance and Administration said
Huddleston acknowledged
on business, he said.
or to enjoy better -paying jobs
and the money can use to avoid
Three other states have flat
the revenue impact of HB1105
that no states have adopted com-
Huddleston responded that a
and income growth;' Kaza said.
paying taxes:
tax rates on all taxable corporate
was "undeterminable."
bined reporting recently. He said
study cited in the Advocates re-
Kaza said an example of such
SURCHARGE ROLE
income of 6 percent (Oklahoma),
If a business' activities out-
it's a testament to the power and
port, commissioned b the
P Y
"bashing" is the stud s repeat-
g" � Y' P
6.25 percent (Missouri) and 6.5
P
side the state were operating at
P g
influence of business lobbying
Y� g
Council for State Taxation and
ed reference to the "pejorative
Russell said that Arkansas'
percent (Tennessee). Texas
a loss, it would pay less tax in
groups in state legislatures.
performed by Ernst and Young,
term 'loopholes' instead of ex-
corporate income tax rates "are
levies a franchise tax on busi-
Arkansas, while if those out of
"Even a modest increase in
shows that Arkansas ranks low
emptions" and a "lack of under-
higher than any of our six sur-
nesses at the greater of 0.25 per-
state activities generated a prof-
a state corporate income tax by
on most measures of business
standing that capital flight is a
rounding states. When the 3 per-
cent of net taxable capital or 4.5
it, business would pay more tax
closing loopholes really is going
taxation compared with its six
very real problem in this state:'
cent income tax surcharge en-
percent of net taxable earned
in Arkansas, the department said.
to have very little impact on bust -
neighbors.
Huddleston responded that
acted in 2003 is included, Ar-
surplus.
Jackson described HB1105 as
nesses' overall state and local tax
Greg Kaza, executive direc-
"loopholes" is the best way to
kansas' corporate income taxes
Russell was out of the office
one way to ensure that lawmak-
burden;' Huddleston said.
Protect
• Continued from Page lA
torney contracted by the utili-
ty, cautioned the Central Ar-
kansas Water Commission on
Thursday that if the utility sues
for condemnation it would be
forced to pay landowners the
amount a jury determines the
land is worth.
"This isn't a lawsuit you can
file and two weeks later say,
'Never mind, we didn't mean it,"'
Jones said. "I have yet to see a
condemnation when anyone can
predict with any kind of preci-
sion what a jury will do."
Using Ferguson's land as an
example, Jones explained that
the award would fall somewhere
between what utility leaders ex-
pect to offer — less than $1 mil-
lion — and high -end estimates
closer to $10 million.
Commissioners took a sober-
ing look last week at the chance
that a jury could make top-dol-
let awards for both the Ferguson
and Deltic properties.
"If we paid $35,000 an acre for
300 acres for the Ferguson prop-
erty and the same amount for
the 700 acres of Deltic's prop-
erty, that would be $34 million
total as the outside risk," Water
Commission Chairman Craig
Wood said.
Neither Ferguson nor his at-
torney could be reached for com-
ment Friday.
Central Arkansas Water budg-
ets $1 million per year for wa-
tershed property acquisition. A
higher sale price, reached either
through negotiations or con-
demnation, would likely cause
the utility to issue bonds backed
by higher water rates.
"Rates are the only thing we
have;" Harvey said.
Little Rock began pumping
water from Lake Maumelle in
1958. Central Arkansas Water can
draw up to 143 million gallons
a day from Lake Maumelle and
a second water source, Lake
Winona. The utility serves
360,000 consumers.
Central Arkansas Water,
formed with the merger of the
water departments of Little Rock
and North Little Rock two years
ago, has not condemned land
since the consolidation. The
former Little Rock Water Works,
however, used eminent domain
to acquire property within the
lake's watershed.
The only thing that could stop
Central Arkansas Water from
raising rates is if both the North
Little Rock City Council and the
Little Rock Board of Directors
object to the increase.
In recent years Central Ar-
kansas Water has been work-
ing to buy as much of the lake's
137-square-mile watershed as
possible, investing millions of
dollars.
The utility has bought 1,005
lakeside acres — at a cost of
about $4 million — over the past
11 years. Most purchases have
been friendly, but a handful had
to be condemned.
Utility leaders decided Thurs-
day to temporarily make buying
the Deltic property a second pri-
ority to buying Ferguson's prop-
erty because Deltic officials have
said they don't plan to develop
the property for at least a year.
Last month, Harvey wrote Lit-
tle Rock Planning Commission
Chairman Mizan Rahman to re-
quest that the commission delay
considering Deltic's proposal.
The commission is set to review
the project April 22. Little Rock
leaders must approve the plan
because the property — outside
the city — lies within Little
Rock's extraterritorial planning
jurisdiction.
"The development proposed
... imposes significant risks to the
safety, quality and condition of
the water supply serving resi-
dents of central Arkansas," Har-
vey's letter reads. "Completion
of the proposed development
would constitute a major setback
to years of careful watershed
protection and likely lead to in-
creased water treatment costs:'
Deltic spokesman Jack Mc -
Cray responded to Harvey's let-
ter on Tuesday with his own let-
ter to Rahman asking that the
Planning Commission not "ab-
rogate its duties and responsi-
bilities."
"Mr. Harvey's letter disclos-
es the extraordinary admission
that it has been [the utility's] his-
torical policy to 'prevent devel-
opment' in this area of the coun-
ty for many years," McCray's let-
ter said.
If the utility begins condem-
nation proceedings, McCray said,
Deltic wouldn't move forward
with development until the
courts decide the matter.
McCray, who couldn't be
reached for comment Friday, dis-
agrees with Harvey's assertion
that the Ridges at Nowlin Creek
would harm water quality.
"Evidently, the arbitrary po-
sition of CAW is that there are
no kinds of measures whatso-
ever that can be employed which
would protect the watershed;"
he wrote to the Planning Com-
mission. "After careful review,
Deltic is convinced the safe-
guards and measures it has
adopted ... are fully protective of
the environment and watershed
of Lake Maumelle:'
McCray said the development
will create no need for the util-
ity to spend money on additional
treatment measures.
"We believe Mr. Harvey's rate
payers may become truly out-
raged when they get the bill for
CAW's unnecessary land ac-
quisition program," McCray
wrote.
Damaging drought worsening across Western states
BY SCOTT SONNER
THE ASSOCIATED PRESS
RENO, Nev. — From the brit-
tle hillsides of Southern Cali-
fornia to the drying flelds of Ida-
ho, from Montana to New Mex-
ico, a relentless drought is wors-
ening across most of the West,
water supplies are dwindling and
the threat of wildfires is rising.
"Most of the West is headed
into six years of drought, and
some areas are looking at sev-
en years of drought," said Rick
Ochoa, weather program man-
ager at the National Interagency
Fire Center in Boise, Idaho.
Arizona is facing its worst
drought on record. Two enor-
mous reservoirs on the Colorado
River are only half -full. Some
farmers in southern Idaho might
not get any irrigation water this
summer, and irrigators in west-
ern Nevada are threatening war
with a country club that wants
green grass for a national golf
tournament.
The mountain snowpack, a
crucial reservoir, was half of the
normal March level or less in
many areas.
"We had one of the warmest
Marches on record ... and we did-
n't get any precipitation almost
anywhere in the West," said Kel-
ly Redmond, regional climatol-
ogist for the Desert Research In-
stitute's Western Regional Cli-
mate Center in Reno. "So not on-
ly did we not add to our supply
in March, which is usually a very
healthy month, but the tem-
perature was so warm that the
melting started early."
The mountains of Colorado
and northern New Mexico got
more than a foot of snow during
the weekend, and meteorologists
said the Albuquerque area could
be looking at record rainfall this
month, but it's only a start to-
ward recovery.
The U.S. Natural Resources
Conservation Service says there's
a potential for water restrictions
and widespread crop and pas-
ture losses in central Nevada,
southern Idaho, most of south-
central Montana and eastern and
southwestern Utah.
Most of southern Idaho and
parts of southwest Montana are
in "exceptional drought;' the U.S.
Department of Agriculture says.
That's a step worse than "ex-
treme drought;' which the US-
DA says best describes other
parts of Montana, Utah,
Wyoming, Arizona, New Mexi-
co, Nevada, Oregon and Col-
orado.
Dick Larsen, spokesman for
the Idaho Department of Wa-
ter Resources, said, "Pray for
rain. That's about all we can do."
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Democrat
7VOazette 1 1 .
1 .I l
NEWSPAPER„. Arkansas Democrat -Gazette, Inc.
Printed at Little Rock e Monday, April 12, 2004 arkRISMS (>dif,/�9www.ardemgaz,CioM 44 PAGES 7 SECTIONS 500
In the news
■ Sen. John McCain, R-
Ariz., told NBC's Meet the
Press that Congress should
consider canceling Lockheed
Martin Corp.'s $257 million F/A-
22 fighter airplane, conceived
during the Reagan adminis-
tration to counter Soviet MiG
jets, to help pay for needed
troop increases in Iraq.
■ James Hefner, the presi-
dent of Tennessee State Uni-
versity, regretted in a letter sent
to students, faculty and staff
that he may have placed the
school in an "unflattering light"
but did not admit to wrong-
doing after an audit found he
used his position to obtain free
Super Bowl tickets.
■ Paul "Danny" Benko, a
mentally disabled 16-year-old
with cerebral palsy who
weighed just 40 pounds when
brought to a St. Louis hospital,
has improved under treatment
as authorities considered pos-
sible charges against his moth-
er, Lora Benko, the St. Louis
Post -Dispatch reported.
■ Vice President Dick Che-
ney attended Easter services
with his wife, Lynne, at a non-
denominational English-speak-
ing Protestant church in Tokyo,
the first stop on a week-long
Asia trip that also is taking the
vice president to China and
South Korea.
■ Anne Burke, an Illinois ap-
pellate judge and head of a Ro-
man Catholic bishops review
board on sexual abuse, ac-
knowledged a friendship with
Thomas O'Gorman, a former
priest once accused of sexual
misconduct, but said the rela-
tionship has not affected her
work
■ Danielle Bimber, 29, a sur-
rogate mother in Pennsylvania
who gave birth to triplets and
then refused to give them up,
saying the biological father and
his fiancee showed a lack of in-
terest in the babies, was award-
ed legal custody by Erie Coun-
ty Judge Shad Connelly.
■ Glenn Bradford, attorney
for Michael Edward LeBrun, a
former Navy seaman accused
of killing Ensign Andrew Mons
while their ship was stationed
in the Philippines during
the Vietnam War, said he
planned to appeal after a fed-
eral appeals court reinstated a
confession thrown out by a
lower court.
■ Mitchell Maddox, a 13-
year-old Florida boy accused
of accidentally shooting his 7-
year-old brother David Lanford
with a .410-gauge pump -action
shotgun during et game of
"cowboys and Indians" while
their parents were not at home,
has been charged with
manslaughter, officials said.
■ Tony Blair, the British
prime minister, wrote in an ar-
ticle for the Observer news-
paper that if the U.S. led coali-
tion forces fail in their strug-
gle against insurgents in Iraq,
the hope of freedom and re-
ligious tolerance in Iraq would
be snuffed out. Dictators would
rejoice; fanatics and terror-
ists would be triumphant:'
LITTLE ROCK
Today Mostly cloudy and cool;
chance of morning showers.
High Mid-SOs,
north winds at 10
to 15 mph.
Tonight Partly
cloudy and cold. ! 1*
Low Mid-30s
Arkansas
1B
Health -Fitness 1 E
Business
10
Heloise 5E
Classifieds
1F
Movies 6E
Comics
4E
Sports 1C
Crossword
4E
Television 2E
Deaths
n
voices 70
Editorials
6111
Weather 4111
Home delivery
378.3456
Outside Pulaski County
1.000-482.1121 .
Gunmen down U.S. helicopter in Iraq
Associated Press
An Iraqi man shouts in anger over the grave of his son Sunday at a soccer field in Fallujah. Though an Iraqi
hospital official said many of the 600 civilians killed in fighting in Fallujah were women, children and the eld-
erly, the U.S. military said most of the dead were probably insurgents.
Protecting
watershed
is crucial,
u ' sty says_
Lake Maumelle
projects at issue
BY C.S. MURPHY
ARKANSAS DEMOCRAT -GAZETTE
Central Arkansas Water
leaders resolved last week to
play hardball with developers
who want to build within Lake
Maumelle's watershed.
If need be, water officials
will use eminent domain to
protect the watershed, and the
utility is prepared to raise wa-
ter rates to bankroll condem-
nation proceedings.
For the past two months,
utility officials have been fend-
ing off efforts by two devel-
opers who want to build
homes in the watershed.
"It's a benefit to such a few
to build in there and a possi-
ble detriment to so many," said
Jim Harvey, the utility's chief
executive officer. The lake pro-
vides 60 percent of the area's
drinking water.
Deltic Timber Corp. has
filed plans with Little Rock
to build a 225-home subdivi-
sion to be called The Ridges
of Nowlin Creek on 1,170 acres
between Arkansas 10 and the
lake. Similarly, developer Rick
Ferguson has plans to build 85
to 87 homes near the lake's
northeastern shore.
Both developers have prom-
ised to install various precau-
tions to protect the Jake's wa-
ter quality, including grass
filtration systems, periodic
testing and restrictive
covenants.
But water officials worry
that the developments carry
too many risks, beginning with
bulldozers disrupting soil and
continuing with lawn fertiliz-
er from homes built near the
lake.
Protecting the watershed is
key to assuring water quality
because storm water flows off
surrounding property and in-
to the 9,000-acre Lake
Maumelle.
"We're very dedicated to
protecting the water quality
that were so extremely proud
of," Harvey said Friday. "Our
rates are very reasonable and
we want to keep it that way,
but we've seen many places
around the country where de-
velopment has caused prob-
lems and tremendous increas-
es in rates for treatment costs:'
Sam Jones, A Little Rock at -
See PROTECT, Page 6A
Tenuous Fallujah cease-fire
lets residents bury their dead
BY ABDUL-QADER SAADI
AND LOURDES NAVARRO
THE ASSOCIATED PRESS
FALLUJAH, Iraq — A fragile
cease-fire held between Sunni
insurgents and U.S. Marines on
Sunday in the besieged city of
Fallujah, where Iraqis said more
than 600 civilians lost their lives
in the past week. Near Baghdad
gunmen shot down a U.S. attack
helicopter; two crewmen died.
Also, the military suggested
it would welcome a negotiated
solution in its showdown with a
radical Shiite cleric in the south.
Most of the Iraqis killed in
Fallujah in fighting that started
last week were women, children
and the elderly, the director of
the city hospital, Rafie al-IssawL
said. Disputing that, a U.S. Ma-
rine commander said most of the
dead were probably insurgents.
Fallujah residents took ad-
vantage of the lull in fighting to
bury their dead in two soccer
fields.
The Fallujah violence spilled
over to the nearby western en-
trance of Baghdad, where gun-
men shot down an American
AH-64 Apache helicopter. As
a team moved in to secure the
bodies of the two dead crew-
men, a large force of tanks and
troops aiming to crush insur-
gents pushed down the highway
outside the Iraqi capital.
Gunmen have run rampant in
the Abu Ghraib district west of
Baghdad for three days. They at-
tacked fuel convoys, killed a U.S.
soldier and two Americans and
kidnapped another American.
The captors of Thomas
Hamill, a Mississippian who
works for a U.S. contractor in
Iraq, threatened to kill and burn
him unless U.S. troops end their
assault on Fallujah, west of
Baghdad. A deadline passed
with no word about Hamill.
China's official Xinhua News
Agency reported that gunmen
had kidnapped seven Chinese
in central Iraq. The report cit-
ed a Chinese diplomat in Bagh-
dad, but gave no details. The
Arab TV station Al-Arabiya re-
ported insurgents seized the
See IRAQ, Page 2A
Briefing lacked specifics, Bush says
DEMOCRAT -GAZETTE PRESS SERVICES
WASHINGTON — President
Bush said Sunday that the intel-
ligence briefing he got on al-Qai-
da one month before the Sept.
ll, 200L strikes contained no spe-
cific "indication of a terrorist at-
tack" on American soil. He al-
so defended the adequacy of his
response to the warnings that
terrorists in the United States
might be planning hijackings.
In his first public remarks
since the declassification of his
top-secret briefing Saturday
evening, Bush played down the
urgency of the information he
received at his ranch 36 days be-
fore terrorists flew airplanes in-
to the World Trade Center, the
Pentagon and a field in Penn-
sylvania. In doing so, Bush
echoed the testimony given last
week by his national security ad-
viser, Condoleezza Rice, be-
fore the commission investigat-
ing the attacks, which had
pushed for the release of the
briefing notes.
"I am satisfied that I never
saw any intelligence that indi-
cated there was going to be an
attack on America — at a time
and a place, an attack," Bush said
after attending Easter services
in Fort Hood, Texas. "Of course
we knew that America was hat-
ed by Osama bin Laden. That
Associated Press
As national security adviser Condoleezza Rice waits under an umbrella,
President Bush answers reporters' questions Sunday after attending an
Easter service at an Army chapel at
Fort Hood, Texas, near his ranch at
Crawford, where the president began a holiday break April 5.
was obvious. The question was:
do: run down every lead, look at
Who was going to attack us,
every scintilla of intelligence and
when and where, and with
follow up on it."
what?"
Still, Bush for the first time
Bush agreed with a reporter
suggested that others in his ad -
who characterized the memo as
ministration might not have
containing "ongoing" and "cur-
done enough to head off the
rent threat information." But he
attacks. "That's what the 9/11
added that if the FBI or CIA
commission should look into,
"found something, they would
and I hope it does;" he said.
have reported it to me ... We
Bush, who said he understood
were doing precisely what the
in the summer of 2001 that the
American people expects us to
See BUSH, Page 3A
`Wall' in FBI
often blamed
in 9/11 laps..
PC
PRESS SERVICES
WASHINGTON — The
legal wall that for years di-
vided FBI intelligence and
criminal agents is blamed
largely for the government's
failure to grasp the threat
posed by al-Qaida inside the
United States before the
Sept. ll, 2001, attacks.
One FBI agent, frustrated
at his inability to track two
soon -to -be hijackers known
to be in the United States,
wrote in an August 2001 e-
mail that "someday someone
will die, and wall or not, the
public will not understand
why we were not more ef-
fective and throwing every
resource at certain prob-
lems."
The Sept. ll, 200f attacks
killed almost 3,000 people.
The problem, since re-
solved, is expected to be
among the topics when cur -
See FBI, Page 3A
Closing tax `loophole'
would yield big cash,
advocacy group says
BY MICHAEL ROWETT
ARKANSAS DEMOCRAT -GAZETTE
Arkansas could generate up
to $52 million annually in new
state revenue by closing a key
corporate income tax "loophole"
and also make the state's tax sys-
tem fairer, a child -advocacy
group says.
The new report by Arkansas
Advocates for Children and
Families of Little Rock is the lat-
est in a series of studies released
by the group that recommends
tax changes that would require
corporate taxpayers and wealthy
individuals to dig deeper into
their pockets.
This latest report is titled
"The Vanishing Arkansas Cor-
porate Income Tax: Should We
Close the Loopholes?" It says
that the share of Arkansas in-
come tax revenue generated by
the corporate income tax was
10 percent in 2002, compared
with 31 percent three decades
earlier.
During the same period, the
individual income tax share in-
creased from 69 percent to 90
percent, the study found.
This decline in corporate in-
come tax reflected a national
trend. The study showed that
nationally, the share of state and
local income tax paid by cor-
porations declined from 22.6
percent in 1972 to 13.5 percent
in 2001.
This decline "was much
steeper" in Arkansas, the study
said, dropping from 31 percent
in 1972 to 11.5 percent.
The study attributed the de-
clining state corporate income
tax share to "tax loopholes and
shelters" and "write-offs" that
cost state government $44 mil-
lion annually in tax revenue.
These devices also contribute
to more than half of all com-
panies filing state corporate in-
come tax returns in Arkansas
paying no tax, the study said.
"One major goal in this re-
port is to stimulate a broader
See LOOPHOLE, Page 6A