Arkansas governor pitches tax cut, vows more coming later

LITTLE ROCK, Ark. — Arkansas Gov. Asa Hutchinson urged lawmakers on Tuesday to approve his $50 million plan to reduce rates for low-income residents and promised to push for bigger changes later to the state’s tax code, an effort to appease fellow Republicans who are seeking even deeper cuts.

 

Hutchinson touted his plan to cut income taxes for those making less than $21,000 a year but acknowledged concerns from GOP lawmakers who want larger tax cuts that will take effect sooner. Hutchinson has also asked lawmakers to approve a $13 million tax break for military veterans.

“I know that some of you say this is not enough and that we need to have a more comprehensive tax reform package. I agree with you,” Hutchinson told a joint session of the House and Senate a day after lawmakers began the 2017 session. “We need a specific plan for the future so that the public knows the direction we are heading and how we can get there.”

Hutchinson said he’ll also propose a legislative task force that will come up with recommendations before the 2019 session on ways to further reduce income taxes in the state. Hutchinson was elected in 2014 on a vow to slash income tax rates, and lawmakers approved a $102 million reduction the governor championed two years ago.

“We need to have a plan to reduce the tax rate over time to a more competitive level,” Hutchinson said.

At least two GOP lawmakers who had been pushing for deeper cuts said they’re dropping those efforts during this year’s session after Hutchinson’s proposal to pursue more tax code changes.

“There are still some unanswered questions, but I’m optimistic that we’re going to be looking at a major overhaul of our tax system in two years,” said Republican Sen. Bart Hester, who had been calling for a $105 million income tax cut. “If that’s the direction we’re headed, I’m happy to get on board right now.”

Republican Rep. Charlie Collins, who had suggested halting a planned grocery tax cut to pay for further income tax reductions, also said he backed the governor’s plan.

“We’re going to set the task force up so it’s actually recommending things before the 2018 election cycle so this is stuff people are going to have to own,” Collins said.

The top Democrat in the House said he was encouraged by Hutchinson calling for the panel to look at tax changes rather than call for cuts that could hurt vital services. Republicans hold a majority in both chambers of the Legislature, but Democrats hold half the seats on the House committee that’s expected to take up any tax cut bills.

“The governor and I are on different sides of the fence on a lot of issues, but the governor understanding that the budget matters and before we just do tax cuts in the name of tax cuts that we ought to take a reasonable, responsible look at this I think you’ve got to say that’s a good move,” House Minority Leader Michael John Gray said.

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Follow Andrew DeMillo on Twitter at www.twitter.com/ademillo

 

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