Two legislators said they will not offer competing tax cut proposals after Gov. Asa Hutchinson called in his State of the State speech Tuesday for the creation of a Blue Ribbon Legislative Task Force to consider comprehensive tax reform. However, the House majority leader said other bills still could be proposed.
Hutchinson has called for a $50.5 million income tax cut for Arkansans with incomes below $21,000 as well as exempting military retiree benefits. Two years ago, the Legislature passed a $100 million tax cut. In his State of the State address, Hutchinson said those two packages have reduced the tax burden for more than 90% of all Arkansans.
Some legislators have called for more cuts, or for different packages. Among them was Sen. Bart Hester, R-Cave Springs, who had proposed a $105 billion tax cut. Hester said Tuesday he would back off that proposal and that he is optimistic others would as well. He said he and other legislators have had long meetings with the governor and that he hopes a comprehensive tax reform package emerges.
“If what the governor just mentioned is what I’m interpreting it to be, then I would foresee me backing down this time for a more comprehensive plan,” he said. “I think if I back off right now, I can get more than I wanted next time around.”
Also on board with the governor’s proposal is Rep. Charlie Collins, R-Fayetteville, who had pushed for more broad-based tax reform affecting all income levels.
“I am all for the governor’s plan now with the understanding that next time we come back, we will have a task force that has some done some work … and from that work we will have a path forward on significant tax reform and relief in Arkansas,” he said. “Now it needs to be done wisely and smartly. We’re not going to do a Kansas. We’re not going to slash and burn tax rates while we leave spending at a level that can’t be supported by the revenues.”
Sen. Jake Files, R-Fort Smith, chair of the Senate Revenue and Taxation Committee, said the governor’s speech addressed Files’ own concerns.
“We have talked for a while about trying to come up with some comprehensive reform in every session. It still seems to be cobbled together a little bit by virtue of how much money we have,” he said.
Files said the proposals would reduce the likelihood of other proposals passing.
“I think it will put a dent in them, because I think the easy response, is, ‘Hey, let’s do that next time.’ What I don’t want to happen is us to push it further down the road and nothing ever happen, conceivably,” he said.
But House Majority Leader Mat Pitsch, R-Fort Smith, said the governor’s proposals would not prevent legislators from offering their own.
“If somebody has a great idea for a tax cut that spurs job growth there at all, I think they’re more than willing to run that,” he said.
Sen. Joyce Elliott, D-Little Rock, praised the governor’s address, saying, “I thought the speech was aspirational in ways and uplifting, and I know going from words to actual policy can be a challenge, but everything he mentioned are actual issues that we need to address.”
As for tax cuts, she said she would have liked to have seen a proposal for an earned income tax credit, which is a credit offered to lower-income individuals.
“It can be in the Blue Ribbon commission, but actually we have enough evidence now to know that it is one of the best ways to help those who are really struggling, and there is just practically no reason to continue studying it,” she said.
The speech featured a list of the governor’s policy proposals for the session, which, except for the Blue Ribbon Legislative Task Force, previously have been announced. Among those are increasing funding for the state’s foster care system.
House Majority Leader Michael John Gray, D-Augusta, said, “Our caucus is encouraged by what we’re hearing from the governor’s office. Obviously, we would like to have some conversation with him about priorities in some of his tax reform ideas. We applaud the efforts on foster care. We appreciate the gesture of the lower income side of the tax breaks. We still have some questions about a long-term highway fund that has really not been talked about the last few days, which is interesting.”
The speech traditionally begins the legislative session. Now the lawmaking begins. As Rep. Bob Ballinger, R-Hindsville, said, “It’s pomp and circumstance, right? It’s what you do in order to show how important all the stuff you’re doing is and go on. I’m ready for the real stuff to get started.”