Governor's 2022 Budget Plans for $50 Million of Tax Cuts

On November 10, Governor Hutchinson announced several tax proposals for his legislative agenda as part of the FYE 2022 budget (Arkansas's fiscal year runs from July to June). These proposals — and the overall budgetary context — set the agenda for the upcoming legislative session where fiscal space will be tight but with room for a few tax cuts and reforms. Hutchinson's tax proposals are aimed largely at low- and middle-income Arkansans, including a sales tax reduction on mid-priced used cars. [More]

Governor's Slimmed Down "5.9% Plan" for $97 Million of Individual Rate Cuts Introduced

Governor Hutchinson announced his individual tax cuts plan today. It is a scaled down version of the 2%-4%-5.9% plan that the Tax Reform and Relief Legislative Task Force had recommended. Essentially it retains Arkansas's unique three-bracket-schedules individual tax system and reforms the tax brackets only for the high-income bracket schedule. There are also some minor upward adjustments to the low- and middle-income bracket schedules. The 5.9% plan comes with a much-reduced fiscal impact: a $97 million reduction in revenue instead of a $192 million reduction. That could mean that the state can enact the business tax reforms needed for competitiveness sooner rather than later. [More]