LITTLE ROCK — Gov. Asa Hutchinson said Tuesday he wants to create a legislative task force to recommend a plan for future tax reductions.
Addressing a joint meeting of the House and Senate on the second day of the legislative session, Hutchinson said that if lawmakers this year approve his proposed $50 million income tax cut for low-income Arkansans, after approving a $100 million middle-class income tax cut in 2015, “we together will have reduced the tax burden for more than 90 percent of Arkansas taxpayers.”
Some legislators have complained the governor’s proposed income tax cut for Arkansans earning less than $21,000 a year would do nothing for the top 10 percent of earners in the state. Hutchinson said in his speech Tuesday that “there is more to do,”
“I pledge to continue down the path of lowering the income tax rate for all Arkansans,” he said.
Hutchinson asked lawmakers to support the creation of a blue ribbon legislative task force to recommend a longer-term plan for cutting taxes.
“The priority goals are fairness, competition, simplification and economic growth,” he said. “The focus of the plan is to reduce the high income tax rate in Arkansas. We need to have a plan to reduce the tax rate over time to a more competitive level.”
Among the legislators who have criticized Hutchinson’s plan for not providing tax relief to high earners is Rep. Charlie Collins, R-Fayetteville. Collins said after the governor’s speech, “I am on board now with the whole program.”
“I’m very optimistic,” Collins said. “I feel the governor has a lot of commitment to it. 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, and I’m very excited about it.”
Hutchinson was first elected governor in 2014. He is expected to announce as a 2018 candidate for re-election later this year.
Sen. Jake Files, R-Fort Smith, chairman of the Senate Revenue and Tax Committee, said be believed creating the task force would make the governor’s tax plan an easier sell.
“From what I’ve heard, there were several members who felt like this task force was enough to allow them to move forward and have some semblance of, there’s going to be more cuts in the future, let’s plan them out,” Files said.
House Majority Leader Mathew Pitsch, R-Fort Smith, said he was “excited” by the governor’s effort to seek a long-term tax plan but said he did not expect it to discourage lawmakers from offering other tax-cut proposals during this session.
“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.
Hutchinson said his proposed low-income tax cut would affect 600,000 Arkansans. He has said previously he wants to delay implementation of the cut until the 2019 tax year.
The governor also voiced support for exempting military retirement benefits from the state income tax; paying tuition for students at community colleges and technical schools who pursue a high-need job skill or degree and agree to work in the state for three years after college; setting aside $5 million for mental-health stabilization centers and crisis intervention training, to reduce the number of mentally ill people being jailed; and using a portion of the state’s tobacco settlement money to reduce the waiting list for home- and community-based services for the disabled.
Discussing the state of the state, Hutchinson said that last year, Arkansas’ economy grew faster than three-quarters of the states, its unemployment rate was below the national average and its per-capita income increased at a faster rate than the national average. He predicted that the state’s population will cross the 3 million mark this year.
Hutchinson noted that Tuesday was the 50th anniversary of Winthrop Rockefeller’s inauguration as Arkansas governor.
“Today, we have our own moment in history, and we can only be worthy of this moment if we work together,” he said.