Ark. House approves tax cuts, unemployment changes

LITTLE ROCK The Arkansas House of Representatives approved nearly $15 million in tax cuts on Wednesday, despite warnings from the Joint Budget Committee chairman that it's getting too late in the session to accommodate revenue drops for the state's balanced budget.

The Senate, meanwhile, approved requiring health insurers to provide coverage for autism diagnosis and treatment, a moves that its sponsor estimates could raise Arkansans' premiums by an average of $1.48 a month.

The House voted 77-14 in favor of a once-a-year sales tax holiday on clothing that costs less than $75 per item. The bill by Rep. Tiffany Rogers, D-Stuttgart, now heads to the Senate.

"I'm running this in an attempt to stay competitive with the other states surrounding us ... and to alleviate some of the tax burden on working families," Rogers said.

The bill calls for the sales tax holiday to come on the first Saturday in August, during the back-to-school shopping season. Passage of the bill comes as lawmakers are preparing to pass the revenue stabilization bill, which sets spending priorities based on expected revenue and is typically the last major piece of legislation they take up during the session.

"At this stage in the game, if we take revenue out, there's something that's not going to be funded," said Rep. Bruce Maloch, D-Magnolia, the chairman of the Joint Budget Committee. "If we take out $1.6 million then it's got to come from somewhere."

The House also agreed to exempt active military members' pay from state income taxes. The bill by Rep. Jonathan Dismang, R-Beebe, is expected to cost the state about $5.5 million.

The House also voted in favor of a measure aimed at easing corporate tax burdens. The bill by Rep. Keith Ingram, D-West Memphis, extends the "net operating loss carry-forward" period, in which companies can offset future profits with current losses to save on taxes.

Ingram's bill is expected to cost the state $7.6 million, beginning in 2015. His bill extends the carry-forward period from its current five years to 20 years. The bill passed on a vote of 82-4.

The Senate unanimously approved a bill by Sen. Mary Anne Salmon that would require health insurers to provide up to $50,000 in coverage for the diagnosis and treatment of autism spectrum disorders. Salmon said that more than 2,400 children under the age of 10 are diagnosed each year with the disorders, and that requiring the coverage would lower the state's costs for caring for them.

"It's a pretty good trade-off for not having an autistic child, and it's a good deal for those who have autistic children," said Salmon, D-North Little Rock.

The Senate also approved legislation that would allow round-the-clock alcohol sales at a Hot Springs horse track and a West Memphis dog track. The measure, approved by a 20-6 vote, allows Oaklawn Park in Hot Springs and Southland Greyhound Park in West Memphis to serve alcohol on any day of the week during hours that they are open. The measure would not allow alcohol sales on Christmas day, and would only allow alcohol sales between midnight and 2 a.m. on Easter.

The measure now heads to the governor's desk. A spokesman for Gov. Mike Beebe has said he plans to sign it into law.

The Senate gave final approval to legislation that puts Toughman competitions and mixed-martial arts under the regulation of the state's Athletic Commission. The proposal, which now heads to Beebe's desk, was proposed following the death of an amateur fighter in a Toughman competition in Texarkana last year.

By a 28-2 vote, senators backed legislation that would require brewers of beer to be consistent in the prices they charge distributors. The measure heads to Beebe's desk.

Senators rejected a proposal that would have required counties to honor employees' requests to withhold dues for unions and other professional organizations from their paychecks. The measure by Sen. Joyce Elliott, D-Little Rock, failed on a 10-15 vote, but Elliott asked to have the vote expunged so she can bring the bill back before lawmakers.

Also Wednesday, the House approved changes to the state's unemployment benefit law so Arkansas can get $59 million in federal stimulus funds.

The legislation changes the amount of time the state uses to calculate unemployed workers' benefits, which the state estimates would add about 1,650 people a year to the benefit program and is a requirement for using the stimulus money.

The bill passed Wednesday on a 66-22 vote.

Backers say the legislation also puts into law two changes required by the federal government that the Department of Workforce Services already has adopted as policy. One would allow benefits for people seeking part-time work and the other would allow benefits for someone who quit work because of a compelling emergency.

The measure also increases the amount of an employee's salary that businesses must pay unemployment taxes on, from $10,000 to $12,000 starting in 2010. The increase would bring in an additional $46 million annually for the benefits, the department said.

The House also approved a new method for how the state calculates a school district's enrollment for the purposes of consolidation.

Now, a district can be consolidated if its enrollment falls below 350 students two years in a row, but a district's fourth quarter isn't counted. A bill by Rep. Buddy Lovell of Marked Tree would count all four quarters for consolidation purposes.

The bill's backers say it will benefit districts that are "on the bubble" of being consolidated for example, a school that has 348 students. But opponents say the state shouldn't tamper with the consolidation process approved as part of Arkansas' effort to exit the long-running Lake View school-funding case.

"I'm tired of getting beat over the head with Lake View. That's history," said Rep. Roy Ragland, R-Marshall.

The bill passed the House on an 89-8 vote Wednesday and now heads to the Senate.