Republican Asa Hutchinson spent months talking about a $100 million income tax cut in his first year in office if elected governor. Democrat Mike Ross said he’d cut taxes, too, but only as the state could afford a systematic re-ordering of tax brackets as revenue allowed.
But in an interview with the Arkansas Democrat-Gazette, Hutchinson finally acknowledged the reality of arithmetic. The money isn’t there for such a huge instant tax cut, not without bankrupting the state in other ways as Sam Brownback proved in Kansas. The campaign of Mike Ross noted the retreat in Hutchinson’s interview with the Democrat-Gazette and pounced:
The Ross news release:
Hutchinson Already Breaking Campaign Promises
Beebe Says Arkansas Can’t Afford Hutchinson Plan; Hutchinson Says He’ll Break His Tax Cut Campaign Promise
LITTLE ROCK – After facing intense criticism over the fiscal irresponsibility of his signature tax cut proposal to cut taxes by $100 million in 2015, Congressman Asa Hutchinson said in an interview with the Arkansas Democrat Gazette that he will now delay his proposed tax cuts until the 2016 calendar tax year, meaning most working Arkansans wouldn’t see tax relief until 2017 – already breaking a signature campaign promise.
“If Congressman Hutchinson is already breaking his campaign promise to voters before we even have the election, how can voters trust Congressman Hutchinson not to break his promises as governor?” asked Mike Ross, Democratic nominee for governor. “Congressman Hutchinson knows his tax cut plan is dangerous for Arkansas and will lead to budget deficits, massive cuts to education, Medicaid and public safety and even credit downgrades. My tax cut plan has consistently followed Governor Mike Beebe’s fiscally responsible approach – we’re going to first balance the budget, fund essential state priorities, then cut taxes for working families and small businesses.”
As recently as June 13, 2014, Congressman Hutchinson told the Mississippi Delta Caucus:
“We have a beginning point, and that is I want to devote $100,000,000 in tax relief in 2015. And that is the surplus that we have and I expect that surplus to grow between now and 2015 and that is so it starts there and you rely upon economic growth as to be able to have further reductions down the road.”
However, in Sunday’s Arkansas Democrat Gazette, Congressman Hutchinson said his tax cut plan will not fully take effect until FY2017:
“[Hutchinson’s] proposal would cut the state’s income-tax rate from 7 percent to 6 percent for people earning between $34,000 and $75,000, and from 6 percent to 5 percent on those earning between $20,400 and $34,000.
Hutchinson’s tax cut would reduce state general revenue by $50 million in fiscal 2016 and by $100 million in fiscal 2017, he said.
Even Governor Mike Beebe is concerned about Hutchinson’s tax cut proposal, telling the Arkansas Democrat Gazette that he doesn’t think the state can afford Hutchinson’s plan. Beebe said it would affect “essential services such as nursing homes, colleges and prisons.” Beebe did, however, commend Ross’ fiscally responsible approach saying through a spokesperson that Ross “made his tax-cut plans dependent on the state’s ability to afford the cuts.”
Mike Ross’ “Lower, Fairer Tax Cut Plan” will modernize the state’s income tax code in a way that cuts taxes for nearly every working family and small business in Arkansas. In fact, the average working family in Arkansas would save nearly $665 a year when his plan is fully implemented.
“Governor Beebe’s leadership demonstrates that we can cut taxes for working families and small businesses and protect vital state services,” said Ross. “My tax cut plan will bring fairness to the tax code by cutting taxes for working families and small businesses who need it most. And, it will be implemented in a fiscally responsible way by phasing it in gradually as the state experiences revenue growth – maintaining our state’s balanced budget. I will always campaign and govern as a fiscal conservative, because, unlike my opponents, I will not bankrupt this state to win an election or make a campaign promise I cannot keep.”