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Arkansas lawmakers give initial OK to massive tax cut plan

December 8, 2021 GMT

LITTLE ROCK, Ark. (AP) — Arkansas lawmakers on Wednesday gave initial approval to the largest tax cut in the state’s history, as legislative leaders hoped to wrap up a special session without taking up a Texas-style abortion ban or other items.

The Senate and House approved identical versions of the tax cut legislation, clearing the way for final votes on the plan in both chambers on Thursday. Republican Gov. Asa Hutchinson called the special session this week to take up the tax cut plan, which it is estimated will cost the state nearly $500 million a year once fully implemented in 2026.

The proposal calls for gradually cutting the top individual income tax rate from 5.9% to 4.9% in 2025. It also includes corporate income tax cuts and a $60 low-income tax credit.

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The bill passed 30-4 in the Senate 82-16 in the House. Hutchinson said the vote “recognizes that we are cutting taxes in a responsible way with a commitment to robust funding of the many obligations of the state from education to public safety.”

But critics of the plan have said the cuts are skewed toward higher income Arkansans and argued that the money would be better spent elsewhere. House Democrats on Wednesday detailed other ways the money could be spent, including eliminating the state’s waiting list for services for the developmentally disabled and expanding pre-kindergarten.

“Concentrating tax cuts to serve the wealthy will serve far fewer Arkansans than would using those dollars to fund popular programs that serve families and help grow our economy,” Democratic Rep. Denise Garner said before the vote.

Hutchinson and legislative leaders have said they hoped to keep the session focused primarily on the tax cut legislation, though some GOP lawmakers have said they hoped to expand the scope to include the abortion ban and other bills.

The proposed abortion ban is modeled after one in Texas that’s being argued before the Supreme Court.

The proposal closely mirrors an outright abortion ban Hutchinson signed earlier this year that’s been blocked by a federal judge, but would allow Arkansas residents and entities to sue to enforce it.

It will take a two-thirds vote of the House and Senate to extend the session up to 15 days to take up bills that weren’t originally on the agenda.

House Speaker Matthew Shepherd and Senate President Jimmy Hickey said they expected the Legislature would adjourn Thursday rather than extend to take up the other bills. Hickey noted that extending the session would open the door for any bills to come up during what was intended to be a limited session.

“I think the majority of the members feel they want to exhaust what’s on the call and then we’ll be finished with this,” said Hickey, who noted lawmakers will be back in February for another session.

Republican Sen. Jason Rapert, the abortion ban’s sponsor, said he still planned to push for extending the session to take up the legislation as well as another proposal of his granting a tax credit to law enforcement officers. Other proposals GOP lawmakers are trying to add to the agenda include new limits on the way race is taught in public schools.

“We all have the right and obligation to offer legislation, to make amendments, to offer motions and to engage in debate that represents the will of the people of Arkansas,” Rapert said.

The House and Senate also gave initial approval to legislation aimed at helping the state land a steel mill expansion in east Arkansas, including tax credits for recycling equipment for the project.