Some Arkansas legislators are saying the Revenue and Taxation Committees of the Arkansas Senate and House should once again hold all tax relief bills and not consider the bills until it is clear what new spending obligations will be passed by the General Assembly. They are claiming this is “the conservative thing to do” since it ensures the state will have adequate funds for spending.
No, the conservative thing to do is look at our high taxes and bring them down as much as possible. Then decide first what spending should be done, and second what existing state expenditures can be eliminated and redirected to new spending.
The hold the tax cut bills strategy was used during the 2021 Regular legislative session. How did that turn out? No major tax relief was passed in the Regular session despite state tax collections skyrocketing. Only minor tax cuts on a few items were passed in the Regular session.
It wasn’t until surplus general revenues reached record levels that a special session was called in December 2021, and a phased-in income tax cut passed.[i] Meanwhile, the general revenue surplus surpassed $1.6 Billion. It wasn’t until August 2022, right before the election, that another special session was called. In that session, the phase-in delay was dropped for fully implemented tax cuts.[ii] With that change, the top individual income rate still will be higher than five of the six surrounding states. (Arkansas would have been better than two of the surrounding states, but Mississippi is phasing-in a lower rate than Arkansas.)
Holding the tax relief bills in committee sounds more like a Democrat plan than a conservative plan. Is that what you sent them to Little Rock to do?
[i] Identical Acts 1 and 2 of the Second Extraordinary Session 2021
[ii] Identical Acts 2 and 3 of the Third Extraordinary Session 2022
