Governor Wants To Cut Taxes For 650,000 Arkansans


LITTLE ROCK, Ark. – Arkansas’ Governor wants to cut taxes for more than half-a-million residents.

Governor Asa Hutchinson laid out plans for the media Tuesday to cut taxes for low-income individuals and military retirees in the state.

“My long-term goal is to reduce and flatten the tax rates — like to get it down to five percent,” he said.

Hutchinson says achieving that goal has to be taken one step at a time, with each step taking care to keep the state’s budget balanced.

He says his first tax cut of $100-million, in 2015, was absorbed by economic growth.

Hutchinson believes the same strategy will offset his new proposal to cut $50-million in taxes for residents making below $21,000 a year.

The proposal would lower the tax rate for the following groups:

Bracket                       Current Rate              Reduced Rate            Revenue Reduction

$0 – $4,299                   0.90%                          0.00%                          $ 22,283,558

$4,300 – $8,399           2.40%                          2.00%                          $ 7,508,244

$8,400 – $12,599         3.40%                          3.00%                          $ 5,617,899

$12,600 – $20,999       4.40%                          3.40%                          $ 10,898,058

The savings for a person could be upwards of $156 per year, or $312 per household.

“This gives us the best opportunity to expand consumer confidence,” he says, “and help us in our overarching goals of helping the economy and increasing spending.”

The second part of the Governor’s plan would benefit military retirees like Doug Bourquin — the Veteran Services Officer for Boone County.

The proposal would eliminate the taxation of military retiree pensions.

“I was elated [to hear the Governor’s plan],” Bourquin says, “because I think that’s just a continuation to benefit the service member.”

“We can spend a lot of money to have a combat situation, but we don’t spend near that much money when our veterans come home,” he says.

The cost to the state of eliminating the military pension tax is expected to be around $13-million.

The Governor’s proposal would offset the cost by closing three of the state’s current tax exemptions:

  • Remove the exclusion from income on Unemployment Compensation
  • Apply the sales tax on full cost of Manufactured Housing
  • Levy the full sales tax on sale of candy and soft drinks (candy and soft drinks are currently taxed at a lower rate under the Grocery Tax).

“If you can get 30 dollars a month, where are you going to put that money?” says Bourquin. “Is it going to feed you? Is it going to put fuel in your vehicle? What’s it going to do for you?”

Bourquin says while the benefit to service members may be small, he, like the governor, believe it will make Arkansas more attractive to military retirees.

“This is an economic driver and will be an economic driver for our state,” says Hutchinson.

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