The governor’s bill to cut the income tax by more than $150 million, with most of the benefits going to the wealthy, passed on a second vote without debate today thanks to Democratic votes.
The bill fell two votes short yesterday of the 27 needed. Today, it passed 28-5. Republican Sen. Terry Rice voted for the bill along with Democratic Sens. Bruce Maloch and Eddie Cheatham. The three had not voted Tuesday, the same as a no vote.
Five Democrats voted no. Two senators didn’t vote, Democratic Sen. Stephanie Flowers and Republican Sen. Bill Sample, who is withholding support until he sees a highway funding bill.
Sen. Jim Hendren presented the bill but said the arguments made yesterday still applied. He and his uncle Asa think the bill will make Arkansas a corporate and residence lure by putting the top marginal tax rate at 5.9 percent, down from 6.9 percent, for people making more than $80,000. They’ve estimated the lost revenue at $97 million based on 2016 income, but an independent analysis says the loss will more likely be more than $150 million when it fully takes effect two years. 75 percent the benefit, more than $73 million, will go to people making more than $450,000 a year.
Democrats objected to the size of the cut given the potential impact on state services, where funding is already inadequate in areas ranging from education to public safety.