Gov. Asa Hutchinson touted his proposal to cut the state’s top individual income tax rate for new residents, called for reducing the used car tax, and said his new budget includes a $240 million surplus during a speech at the Arkansas State Chamber of Commerce/Associated Industries of Arkansas’ Annual Meeting Tuesday.
Hutchinson said his budget calls for reducing the top individual income tax rate for new residents to 4.9% for five years. Doing so would attract tech and manufacturing talent and also retirees.
“You say, ‘Well, that doesn’t help me any,’” he said. “Well, it sets the standard that we want to get all Arkansans to 4.9% in an individual income tax. So we’re giving new residents a little jump start, incentivizing, bring in tech talent, grow our economy, and let’s keep marching forward to reduce that individual income tax rate for Arkansans.”
The top tax rate will fall from 6.9% to 5.9% next year because of legislation passed in 2019.
Hutchinson also called for reducing the sales tax on used vehicles from 6.5% to 3.5% for those with sale prices between $4,000 and $10,000. There is no tax for cars sold for less than $4,000.
Tuesday morning, the governor had presented to the Legislature’s Joint Budget Committee a state budget with a $240 million surplus. He said that $50 million should be set aside for tax reductions. Another $100 million should be placed into the state’s long-term reserve account, which has accumulated $180 million since it was created in 2016.
“You add $100 million into that, you’re talking about a quarter of a billion dollars in savings, and pretty soon you’re talking about real money,” he said.
The governor said he is asking the Legislature to approve an additional $30 million to expand broadband internet service to rural areas. The Legislature would have room for further tax cuts. He asked meeting attendees to support his push for hate crimes legislation, saying Arkansas is one of only three states that lack it.
Regarding the presidential election, Hutchinson called for patience in the vote count as each state has different rules. He noted that he traveled to Florida in 2000 to help with the recount when President George W. Bush was elected over Vice President Al Gore. He said people should allow the process to work. At the same time, he said it’s likely that former Vice President Joe Biden and Sen. Kamala Harris won the election, and they need to be given the latitude to plan as the counting finishes.
He expressed hope that a vaccine for COVID-19 is forthcoming following the announcement by Pfizer Nov. 9 that data is showing its vaccine is 90% effective. However, he called for vigilance and for continued mask wearing, social distancing and hand washing.
“We cannot wait for a vaccine and say, ‘Well, it’s around the corner,’” he said. “We have to be engaged day by day now in terms of our safety and protecting others and following the public health guidelines.”
Following his remarks, Hutchinson was presented with the first-ever Public Servant of the Year Award by the Chamber and the Associated Industries.
Hutchinson was followed by the event’s keynote speaker, American Bankers Association Chief Political Strategist Rob Engstrom, who appeared remotely.
Engstrom said the nation’s political attention will be focused on his home state of Georgia. Control of the U.S. Senate will depend on two runoff elections there Jan. 5. Democrats must win both to reach a 50-50 split so that Harris would cast the tie-breaking vote. Republicans would control the upper chamber by winning one of the two Georgia seats.
Engstrom said the stakes are high and that major players from both parties would practically move to Georgia. In fact, Democratic presidential candidate Andrew Yang had announced he would literally do so to work for the Democratic candidates. However, he said voters will consider the races to be about Georgia’s interests and values.
Engstrom noted that Senate races “have turned into mini-presidential races,” with enormous sums of money spent on them – $250 million in the North Carolina Senate race.
On the House side, Democrats were denied the gains they were expecting and in fact lost seats. He said groups like his American Bankers Association and the Chamber will contrast their beliefs with liberal ideas such as the Green New Deal and “Medicare for All,” both of which he said are dead on arrival, and reversing the tax cuts signed into law by President Trump.
However, he said he is optimistic that progress can be made in infrastructure, expanding funding for the COVID-based Paycheck Protection Program, trade and immigration reform.
He said that Biden, 77, has privately indicated he may not run for re-election, so the 2024 presidential campaign is now underway. Individuals in both parties are privately making their interests known. He told attendees to watch who on Biden’s cabinet has presidential aspirations.
Engstrom said it is nearly certain that Biden will be the next president. Asked whether he believes voting irregularities have occurred, he said each state and county has different rules. He said he personally witnessed problems when he monitored the Florida recount in 2000. He also saw issues in a 2008 Senate race in Minnesota.
“I’m going to keep an open mind,” he said. “Right now, I’ve seen no evidence beyond anecdotal of systemic irregularities that would change the outcome, but we have a process in place to account for that.”