Natural State News

Gov. Asa Hutchinson says he plans to call the Arkansas General Assembly for a special session Monday, Dec. 6 to discuss income tax cuts.

"I want to make sure we have the support for the main purpose of the special session, which will be the tax cut session," Hutchinson said, as reported by the Arkansas Democrat Gazette.

The governor made the special announcement during Thanksgiving week.

After the state went 31 straight months with tax revenues exceeding projections, Hutchinson said in a release, "Our decision to keep the economy open for business was important for our families and protected workers' income. The surplus trend line puts Arkansas in a good position to have another gradual reduction in the income tax rates."

The financial surplus means the governor thinks it's time to cut taxpayers a break.

"That's exciting [after] coming through a COVID-19 pandemic, that we have a good economy coming in Arkansas, and that we can look at tax reductions even during this time because of a surplus we've built and because of the growing economy that we have in Arkansas," Hutchinson said, as previously reported by Natural State News.

The current draft of the bill would cut the top tax rates and combine the low- and middle-income tax tables.

Rep. Joe Jett (R-Clay County) said he has around 65 Republicans from the House to co-sponsor the bill, the Arkansas Democrat Gazette reports. The House has 100 seats total.

In the 34-seat Senate, which has one vacancy, Sen. Jonathan Dismang (R-Bebee) says he has 25 backers.

Jeremy Horpedahl, associate professor of economics at the University of Central Arkansas and research scholar at the Arkansas Center for Research in Economics, previously spoke with Natural State News regarding cutting the state's tax rates.

"I would not say the effect of our current tax rates are detrimental but keeping Arkansas's income taxes at the same level while other states are lowering theirs will make us less competitive," Horpedahl told Natural State News. "Two of Arkansas' neighbors have no income tax [Texas and Tennessee]. A third [Mississippi] has looked seriously at eliminating the income tax too. Our other three neighbors [Missouri, Oklahoma and Louisiana] have either recently cut income taxes or have definite plans to do so in the near future. Standing still means falling behind in terms of tax policy."