The 92nd General Assembly has just two weeks left, and final bills are being filed and heard in committees. This week tax increase legislation hit snags in the House Revenue and Tax committee. SB571 as passed in the Senate would have raised taxes on cigarettes and vaping to pay for a redistribution of wealth program (EITC) and other tax reform for low income earners. That bill has received little to no support from the House Revenue and Tax committee leading the sponsor Jim Hendren to drastically amend the bill. Now, the bill just adds the new tax on vaping products in exchange for a 1% income tax cut on income between $4,500 to $8,999 for low income earners. No updated fiscal impact has been filed.
The Internet Tax 2.0 stalled in the House Revenue and Tax committee this week after disagreement over taxing car washes. The bill includes the Internet Tax 2.0 with phased in corporate tax reform. A $5 million tax increase on online hotel bookings was added through an amendment. To date, the net result is a tax increase until 2027.
Other Tax Legislation Status:
SB336 – Gas Tax Increase – Signed into law. Will go into effect on October 1, 2019.
HJR1018 – Half Percent Sales Tax Increase for Highways – Passed both chambers and will be on the general election 2020 ballot.
Combined, SB336 and HJR1018 would provide $418 million in additional revenue for roads.
SB447 – Homestead Property Tax Credit – this bill was amended this week. Previously this bill to raise the homestead property tax credit included provisions to raid the property tax relief trust fund for general revenue. With the amendment the property tax relief trust fund would transfer money to the long-term reserve fund. This passed the House Revenue and Tax committee and the full House last week.
HB1565 – Cigarette Paper Tax Increase, Increased Smoking Age – this bill has passed the Senate and House and signed into law.
A good bill that would increase the sales tax exemption on used cars, making them more affordable for working families failed in the Senate Revenue and Tax committee after the Governor opposed the bill.
A federal judge this week struck down work options as part of the Obamacare Medicaid Expansion program called Arkansas Works. That triggered the House failing the appropriation for this program to debate the issue further. It is estimated that about $20 million in additional money may be needed to cover the loss of the work options. Legislation from Rep. Josh Miller to move to a traditional fee for service model of Medicaid Expansion was filed last week. This would move away from the monthly payments to private insurance companies, regardless of whether people use the insurance. Only actual health services used would be paid for by taxpayers.
You can read details on some of the top stories from last week below, courtesy of Conduit News and Conduit for Action:
- Clarification Needed from Arkansas Republicans. Please Respond
- Internet Tax 2.0 – Numbers Don’t Add Up
- Federal Judge Strikes Arkansas Medicaid Work Requirement
- Elimination of Gun Free Zones in Arkansas Dropped
Week 11 Scorecard
SUPPORT – HB1929 – Ends Arkansas Works, Changes to Fee for Service Medicaid Expansion
By: Rep. Josh Miller (R – Heber Springs)
This bill would end the current form of Obamacare Medicaid Expansion, called Arkansas Works. In its place a task force would be formed to study a transition to a more traditional Medicaid fee for service program. Currently, insurance companies are paid premiums of over $500 per month for every person enrolled in the program. The insurance companies receive the payments regardless of whether a person ever uses the insurance or receives healthcare services. The change to the more traditional “fee for service” structure would only pay for services that are actually used by the Medicaid Expansion beneficiaries. Thus taxpayers would only pay for healthcare, and not health insurance that lines the pocketbooks of big insurance companies.
While Obamacare Medicaid Expansion itself is a massive expansion of welfare and dependency on government costing billions, this version should be cheaper than the current Arkansas Works setup. A cheaper alternative is supportive over a more expensive one. This change may also undermine the big insurance company’s stranglehold over the Arkansas General Assembly with their massive donations and lobbying pressure. Insurance companies stand to lose nearly $2 billion with this change.
SUPPORT – SB539 – School Choice Tax Credit
By: Sen. Blake Johnson (R – Corning)
This bill would provide educational scholarships for students to attend the schools and educational facilities that are best for them. It would be funded by private donations to private organizations who would oversee the scholarship program. The donations would qualify for tax credits to offset income tax liability for the donors. The program is capped at $3 million per year.
This bill is being proposed in place of SB620. This is a good bill that increases a parent’s choice for the best education of the child. There are no mandates that a student participate. School choice long term should increase a person’s economic freedom with less dependence on government schooling.
SUPPORT – HB1928 – Recording of All Public Meetings
By: Rep. Vivian Flowers (D – Pine Bluff)
This bill would require that all public meetings either be audio or video recorded. The recordings must be kept for at least one year and are subject to the Arkansas Freedom of Information law.
This bill would increase transparency and provide a more honest and open government.
Courtesy of Conduit For Action