Arkansas legislators held the first meeting of a newly formed task force on taxes on Monday and selected its leadership. Senate Majority Leader Jim Hendren (R-Gravette) was confirmed as chair.
The Tax Reform and Relief Task Force was formed as part of a compromise last legislative session that helped deliver a $50-million tax cut for low-income Arkansans. Some conservatives had called instead for a $100-million-plus tax cut for the state’s wealthiest earners.
Senator Hendren, who is Governor Asa Hutchinson’s nephew, says he’s generally open to cuts for higher income earners but cautions repercussions to the rest of the state budget need to be addressed simultaneously.
“That’s going to be a very expensive tax cut because we’re talking about a couple-hundred-million dollars to move it just a point or two. Before we make decisions of those magnitude we ought to spend some time studying it and seeing what’s the best path forward because it’s very, very expensive decisions,” he said
More so than any tax cut commitment, task force leadership has largely reserved public commentary to a focus on studying the worth of existing exemptions. Hendren advised the 16-member task force to brace for the months ahead.
“Don’t make commitments and promises about exemptions or policy until we go through the process. You will get tremendous pressure to do that,” he said. “This is intended to be and designed to be a top to bottom look.
Hendren talked to reporters afterward about pressure lawmakers are likely to face with so much money at stake.
“I’ve already gotten calls from a half a dozen lobbyists wanting to protect their exemption,” said Hendren. “Farmers are going to try to protect exemptions for farmers. I expect that and I would be disappointed if they didn’t. Businesses are going to try to protect exemptions for manufactured parts and different things.”
The task force is charged with issuing a preliminary report by December 1st. A list of recommendations for tax cuts, changes to exemptions, and general adjustments to policy is to be delivered before the next regular legislative session in 2019.
Senator Larry Teague (D-Nashville) served on a 1999 tax study group that didn’t lead to much in the way of legislative action during Mike Huckabee’s time as governor. He told his fellow legislators he hopes for a better outcome this time around.
“I served on the Blue Ribbon Commission,” said the current Democratic chair of the Joint Budget Committee, “I recall that I learned a lot. I don’t recall that a lot came out of that but I’m optimistic we can accomplish something.”
Representative Lane Jean (R-Magnolia) was selected as co-chair. He told task force members, appointed by legislative leadership and the governor, that recommendations needed to be based in part on a geographic consensus.