With $1.6 billion surplus, Arkansas governor wants to accelerate tax cuts
Gov. Asa Hutchinson says he is talking with leaders of the Arkansas Legislature about calling a special session in August to be focused on providing economic relief to taxpayers impacted by rising prices.
The state ended the 2022 fiscal year last Thursday with the final revenue report to be released on Tuesday by the Department of Finance and Administration. In an interview with Arkansas PBS broadcast over the weekend, Hutchinson said the state is now sitting on a budget surplus of $1.6 billion.
“What we’re trying to do is simply put more money in people’s pockets,” Hutchinson said.
He suggested there is support from legislators to accelerating tax cuts approved last year. The law gradually reduces the state's tax rate from 5.9% to 4.9% by 2026. It's scheduled to fall to 5.3% in January, but Hutchinson said dropping it to 4.9% earlier than planned would provide financial relief faster to those struggling with inflation.
"There is broad consensus that's a good plan. There were other ideas out there, but that's the simplest. We can afford to do that," Hutchinson said. "We have sufficient reserves that we can make sure to continue to provide services that are needed and still accelerate the reduction of those tax cuts."
Hutchinson has also voiced support for using surplus money to enhance school safety, with a recently reconvened commission expected to release a report with recommendations in October. The governor has also said he wants to raise teacher salaries. Some lawmakers have said they would rather address teacher pay during next year's regular session.
If a special session is called, he said legislators may also want to consider increasing funding for adoption services programs. The demand for such programs is expected to increase as a result of the recent Supreme Court ruling that said there is not a constitutional right to abortion. An Arkansas law that went into effect on the day the decision was released now bans the procedure except to save the life of the mother.
"We're going to have to have time to adjust to this," Hutchinson said. "Let's make this successful in terms of adoption alternatives, services that provide greater education. It's going to take some resources to do that and I think that's the most important direction that we can take."
State Sen. Jason Rapert, R-Conway, has suggested Arkansas should pass legislation making it difficult for women to get abortions in other states where the procedure remains legal. In the interview, Hutchinson said he wouldn't support such a proposal.
"I don't see a constitutional basis for restricting the freedom of travel even though it might be traveling for a purpose not supporting the policy of Arkansas," Hutchinson said. "I don't see that as constitutional. I think the Supreme Court of the United States indicated that as well."