Legislative leaders filed details Wednesday for a bill mirroring much of Governor Asa Hutchinson’s signature campaign promise, a $100 million tax cut for the middle class. An agenda for 90th General Assembly is beginning to take shape.
Senate President Jonathan Dismang (R-Searcy) said he hopes to bring the three-page tax cut proposal before lawmakers as early as next week. The move would precede both the Governor’s promised address on health care reform, and his comprehensive budget proposal.
House Speaker Jeremy Gillam (R-Judsonia) too expects a supportive body to quickly take up the proposal aimed at middle class families.
“I do expect strong support for the concept. The members probably are just now getting a chance to read the language so we’ll kind of wait and see where that goes from there,” said Gillam.
State finance officials predict the 1 percent income tax cut for Arkansans earning between $21,000 and $75,000 a year would cost the state just over $100 million a year when fully phased in by 2017.
Joe Jett, a rare Democrat in a leadership role, heads the committee that will take up the Governor’s plan. Jett said there is a possibility of delaying nearly $50 million in capital gains and manufacturing tax cuts passed last session, to help accommodate the cost of Hutchinson’s plan.
“Well you know, back last summer I actually floated a thing, floated a thing with some leadership about taking the tax cuts that we did for the one-tenth of one percent and then incorporating that back into this, whether it was Mike Ross or Asa Hutchinson winning the race because both of them were talking about a middle class tax cut,” said Jett.
Back in late November, the incoming Republican Governor Asa Hutchinson too said he had thought about delays to tax cuts from 2013 to help facilitate his individual income tax cut.
“We will look at what’s already been passed to see whether they need to be folded into my priority, whether they need to stand separately, need to be adjusted. I’ll work with the legislature on those but I’ll take a fresh look at those too,” said Hutchinson.
There is already one proposed change to a package of tax cuts from 2013, rolling back a tenth of a percent cut to the top bracket. However, Jett said he doesn’t know of anyone in the House Revenue and Tax Committee that at this point has said they would carry legislation delaying any more tax cuts from last session.
“Most people that I’m talking to are just kind of wanting to sit back on the sidelines and see where the budget numbers are at, where the money is coming for the tax cut. Until we see the specifics of stuff nobody is really wanting to say, 'listen, let’s roll back this or roll back that,'” said Jett.
Concern does persist among some in the legislature, though likely a minority, that rather than creating an economic boost, as Hutchinson predicts, tax cuts could instead lead to cuts in needed state services. While tax cuts are now on the table, how they relate to the rest of the budget is not. However, the session is only three days old.