TALKING BUDGET: Gov. Asa Hutchinson

Gov. Asa Hutchinson
talked to the Legislative Council this morning about his $5.75 billion budget for the next fiscal year. It emphasizes the broad strokes of his campaign promises: tax cuts, reduction in some agency spending; a teacher pay increase; a $29 million “rainy day” set aside; and a reduction in the governor’s “quick action closing fund” to aid economic development projects, an expenditure that has drawn some criticism in the past.

He proposes a $4,000 increase in minimum starting teacher pay over four years, to $36,000. This will cost $60 million over four years. He also said he’d suggest putting $24 million into the state match for teacher retirement, as the current law requires, assuring teachers of a sound retirement system.  There has been concern among teachers about a state retreat fro the current defined benefit retirement system.


He said he’d add $1.1 million to base funding of the Agriculture Department and $1.5 million to that for UAMS.

The State Police will get an additional $2.3 million to add 24 troopers. Another $900,000 will go to a new crime lab in Lowell. More money will add to the number of probation and parole officers.


As to taxes, he said he anticipates a $38 million reduction in revenue thanks to a tax cut given to two existing casinos under the casino expansion amendment. He said this will result, not in a cut in services, but a reduction in surplus accounts.

He proposes $111 million for tax cuts over next two years., the biggest cut to come from a reduction in the top income tax rate from 6.9 to 6.5 percent in 2020 and further reductions to 6.3 percent in 2021 that he said would make Arkansas an economic magnet. He said he’d like to see it reduced to 5.9 percent in four years.


He anticipates an increase in revenue from Internet sales taxes, which will require legislative action to implement a recent U.S. Supreme Court decision.

He anticipates a “restricted reserve” fund of $127 million.

He offered no specifics on increased spending for highways, as sought by the road construction lobby. He had said in a talk yesterday that he was committed to providing more money, but offered no specifics.

Here’s the governor’s letter on transferring school money to an account where it could be used only for teacher pay minimums. Here’s his letter to the legislature.