Governor Hutchinson today outlined his agenda for tax cuts but said that the special session will have to be delayed.
“There’s not going to be a special session next week,” he said at his daily press conference. The session tentatively scheduled for next Monday will take place at a later date. The governor did not give any details on when the session would take place. Asked whether it would happen prior to Thanksgiving, he would not commit to that, but said he hoped so.
He said that the delay was for “a number of reasons” and said “we need more time.”
Does that mean he doesn’t have the votes?
Hutchinson said that there was “broad agreement [in the legislature] that these ought to be elements of the plan.” He said he would work with the legislative leadership “in finalizing this outline into hopefully bill form that we can generate the support that is needed to pass.” Hmm.
More from the presser today, including the governor’s normal COVID briefing:
The governor’s tax cut outline
The governor outlined three principle parts to his tax cut plan:
1) A low-income tax break — increasing the individual tax credit from $29 to $60 for Arkansans making less $22,900. This would cost the state $19.6 million annually in general revenue when fully implemented.
2) Combining the low- and middle-income tax tables, “which focuses on a tax break for middle-income individuals, the governor said. That would cost $132.7 million annually when fully implemented.
3) And of course, tax cuts for the rich. “A critical element,” Hutchinson said. The governor proposes lowering the top rate from 5.9 percent to 5.5 percent next year (109.6 million when fully implemented), and then 5.3 percent in 2024 (54.8 million annually when fully implemented).
“There’s also discussion about reduction of the corporate tax rate,” Hutchinson said. “Some of that would have to be triggered,” he said, by the state meeting certain revenue thresholds to make sure that the government was properly funded.
If the governor’s income-tax cut plan was adopted, it would cost a total of $321.3 million in fiscal year 2024. “That is a very large tax reduction package,” Hutchinson said. The governor said that nearly 57 percent of the tax cuts would go to Arkansans making less than $82,000 a year.
An even lower top rate?
Asked about certain legislators who might want to cut the top rate even further, to 4.9 percent, the governor said, “that’s under discussion as well.” He said that would require “the right trigger” in terms of state revenue streams. “That’s something that’s important to many members and I have no objection to it as long as the services to the state are protected…that remains to be seen as to whether that will be part of it or not.”
Other topics at the special session
Whenever the special session does happen, will the legislature also try to take up abortion? Critical race theory? Vaccine shenanigans?
“There’s other issues that have been brought up,” Hutchinson said. “It gives more time to analyze that and hopefully we’ll have some Supreme Court guidance in the coming weeks that might shed some light on other items that members have mentioned might want to be discussed during that special session.”
Guidance from the Court could provide context for how the state might respond to a changing legal landscape on abortion, the governor said. (Sen. Jason Rapert, among others, wants to enact a law similar to the anti-abortion measure recently passed in Texas, and would like to do so during the special session.)
The governor will establish what items are on the “call” for the session, but a two-thirds vote of the legislature could add others (avoiding the latter could be another possible reason for delay if the governor is short on votes).
Asked whether he would consider putting the abortion issue on the call — with or without guidance from the Court — the governor responded: “We have a very restrictive anti-abortion law that’s been passed in Arkansas that prohibits all abortion except to save the life of the mother. That has been enjoined by the courts so that’s working its way through the courts.” Other cases are likewise working their way through, he said. “What we need right now — we have restrictive abortion laws — we need resolution by the courts and it would be wiser to wait until we get that guidance before we start passing laws again,” he said.
“If we get guidance, I’m open to looking at that guidance and seeing what step Arkansas should take, if any,” he said. “But at this time…that is not something that we should do now.”
Revenue forecast to be revised upward
With slashes to revenue potentially on the horizon Hutchinson also said that updated revenue figures painted a rosy picture. “The forecast will be revised this afternoon,” the governor said. “That will be revised upward in terms of revenue…for the current fiscal year as well as the next fiscal year. What that means is with the growing economy we have, with the revenue picture we have, with the surplus that’s being built up…which will allow recurring revenue for the tax cuts that have been outlined.
There were 661 new cases yesterday, down from the previous week. There were 19 deaths. Active cases were down by 99 as compared to yesterday.
“We still lose Arkansans to a disease that kills,” Hutchinson said.
The state has given out 7,255 doses of the vaccine over the last 24 hours; over the same period the number of fully immunized Arkansans has gone up by 3,046.
Hospitalizations and patients on ventilators held roughly steady as compared to yesterday.
There were 1,080 cases in K-12 schools as reported yesterday, which represents a decline from last week.
Changes in COVID school policy
The governor announced changes to quarantine policy in schools. The definition of a close contact in a school setting will be changed from within six feet to within three feet (for fifteen minutes).
“That’s a significant change that will help our schools minimize the quarantining” and balance the needs of public health and the students, he said.
Hutchinson said that the change was meant to address “severe hardships in our schools to the students” in terms of learning loss due to quarantines, and cited falling case numbers in the schools. “You have to balance the risk and the losses…. We’re giving a little bit on the perfect science in order to increase the opportunity for students to participate and not have to undergo quarantine with the minimal risk at this point,” Hutchinson said.
The change impacts K-12 schools but not daycare centers, childcare centers, or higher education.
Health Secretary Jose Romero said that the Department of Health would continue to monitor cases in schools. If there’s an increase in school cases after this modification, he said, a recommendation would be made to the governor to go back to the six-feet definition.
Hutchinson also touted the “Test to Stay” pilot program allowing people to avoid quarantine if they submit to rapid testing that comes back negative and wear a mask (people can also avoid quarantine if vaccinated or if both people involved in the exposure were wearing masks).
That program will now be extended to extra-curricular activities as well as the regular school day, Hutchinson said.
Both Hutchinson and Romero again stressed the importance of vaccination. Romero said that the rate of vaccination in children aged 12-18 has stalled — 49.9 percent have had one dose and 39.8 percent are fully immunized. “We need to get them vaccinated,” he said.
Romero added that he expected to see vaccines available for children 5 to 11 at the beginning of next month.