Members of the Arkansas House and Senate passed their versions of a $500 billion tax cut package Wednesday over objections from some Democrats who said the bill does little to help low-to-moderate income residents.
The House and Senate Revenue and Taxation Committees, in turn, approved the bills from the other chamber, and those bills will receive floor votes Thursday. Gov. Asa Hutchinson is expected to sign both bills if they pass.
The tax cut was at the top of a list of bills proposed by Hutchinson when he called lawmakers back to Little Rock for a special session.
The bill decreases the top income tax rate for Arkansas residents from 5.9% to 4.9% over the next four years. Arkansans with an annual income less than $24,700 will receive a nonrefundable tax credit of $60, according to information from the governor’s office.
Rep. Denise Garner, D-Fayetteville, said the tax cut is not enough to address problems in the state that include 25,000 homeless residents and 40,000 people who are behind in their rent. She said the tax cut benefits the top 1% of earners the most.
“This tax cut isn’t large enough to make a difference to low- and middle-income families,” she said. “And my guess is that most of those 1% will hardly notice.
The tax cut would give low-income residents about 16 cents a day, Rep. Megan Godfrey, D-Springdale, said.
Republican lawmakers said the tax cut was fair across the board and those who make more income would benefit more.
Rep. Joe Jett, R-Success, chair of the House Revenue and Taxation Committee, said work on the bill began three months ago.
“Our goal on this package was to do a tax cut for all Arkansans … ,” Jett said. “But I would like to point out at the end of the day, there are over 104,000 folks that will never pay (income) taxes.”
Sen. Joyce Elliott, D-Little Rock, said she was not philosophically opposed to the bill, but she had a “different priority system.”
“Of course we can afford a big tax break if we are not taking care of so many things we need to take care of in the state for Arkansans,” she said.
The tax cuts also were opposed by some nonprofit organizations who urged the Legislature not to pass them.
“Arkansas is not a wealthy state,” Bruno Showers, senior policy analyst for Arkansas Advocates for Children and Families, said in a social media post. “Concentrating tax cuts to serve the wealthy will benefit far fewer Arkansans than using those dollars to fund popular programs that help kids.”