Our View

Our View

Is Arkansas healthy enough for a tax trim?

We can just imagine how many of our liberal Democrat lawmakers are in absolute shock after hearing Republican Gov. Asa Hutchinson announce the other day that he believes the state could conservatively afford a $50 million-a-year income tax cut, even amid some economic uncertainty.

And, we suspect that within the near future we’ll hear these very same liberal Democratic lawmakers come out and announce to all to hear their doomsday predictions. Oh sure, we’ll probably hear such political rhetoric such as how our little children will be denied proper education, that the state’s poor, who are taking full advantage of the state’s socialistic subsidies, will be denied free health care and reductions in their food stamp benefits and how our highway funding will be slashed, and that teachers won’t get their fair compensation and that the poor Arkansans will suffer at the expense of the struggling tax paying middle class.

We further expect to hear from these political critics that this aggressive, forward progressive Republican governor is running Arkansas in the ground by slashing taxes at the expense of the poor people, public education and social programs.

Meanwhile, the Republican governor said his goal is to unveil a proposed income tax cut plan on Nov. 9 which just happens to be the day after the presidential election. That will also be the time his administration presents its general revenue forecast and proposed budget for fiscal 2018 to the Legislative Council and Joint Budget Committee.

If Hutchinson is able to pull this tax cut plan off he wants it to become effective Jan. 1, 2018. The challenges he has in giving the hard working middle- class Arkansans a tax break is that he’ll have to convince lawmakers who want to consider requests for more general revenue funding for public schools, the Department of Human Services and prison-related agencies that cutting the state’s income tax won’t negatively impact their own political funding agendas.

Furthermore, there will be those skeptical political critics who will spread the fear factor that general revenue collections won’t meet the necessary projections and lack of tax dollars will harm the needs of children the poor and overcrowded prisons. There will be those skeptical politicians who will say giving the middleclass Arkansans a little tax break may very well jeopardize funding needs for the state’s needy road, highway and bridge projects.

For example, Senate President Jonathan Dismang, R-Searcy, said he’s “pretty hesitant” about trying to build an income tax cut into the Revenue Stabilization Act.

Hutchinson cautiously said he doesn’t want to create hope or promises of future tax cuts that are unrealistic and said, “I think we can absorb $50 million. I think that’s realistic. If you try to do more than that, then you could be putting the budget at risk if the economy is uncertain, so that’s where the Revenue Stabilization Act trigger mechanism could be helpful.

But, Dismang responded by saying, “Our tax code needs to be predictable for anyone that is moving to the state and for families that live here right now, and I don’t think the Revenue Stabilization Act trigger helps accomplish that.”

Let’s not hold our breath on this tax cut promise but by the same token let’s keep our fingers crossed and hope Hutchinson can pull this off.