From the historic hallways of the most beautiful state Capitol in our great nation, this is Senator Keith Ingram.
During the final days of every legislative session, money matters take center stage. This year is no different.
We have passed gun laws to strengthen the Second Amendment. We have passed numerous laws to further restrict abortion. We have enacted dozens of laws changing how elections are held, and how county clerks process ballots.
Now, in the final week of the session, we will spend the majority of our time on budgets and taxes. Of course, the two go hand in hand.
We have just about finalized a state budget for the upcoming fiscal year. In Arkansas we call it the Revenue Stabilization Act.
It prioritizes state agency spending and obligates state government to operate within a balanced budget.
This year’s version will limit state general revenue spending to about $5.9 billion. That will be distributed to public schools, institutions of higher education, prisons, law enforcement, Medicaid and other health care services.
Also, we’ll put more money into reserve funds, which we call rainy day funds, to shore up our credit rating and have on hand in the event of an emergency.
Before the legislature could finalize a budget, we had to have a clear idea of how much money we have to spend. That meant we first had to reach an agreement on a variety of tax cut proposals.
One of the first tax reductions enacted this year will grant $59 million in state income tax cuts to people who lost their jobs and businesses due to the Covid-19 pandemic.
Following that, we passed an even larger tax cut for people and businesses that had to apply for federal tax relief through the Paycheck Protection Program. The legislation will lower their tax burden by $179 million next fiscal year.
We expanded the annual Back to School sales tax holiday in late August, so that retail stores will no longer collect sales taxes on computers, electronics and video games.
The House and Senate are still negotiating a bill to help people who buy used cars. Currently, any vehicle costing less than $4,000 is exempt from sales taxes.
We’re working to increase that threshold, to $7,500 and later to $10,000. It may not be a full exemption for the more high-priced motor vehicles.
Timber companies will get tax credits, as will farmers and agricultural companies that build water projects such as irrigation systems and impoundment ponds.
Families who have suffered the death of a stillborn child will get a $500 income tax credit.
Of course, figuring out your taxes can quickly get very complicated. For example, we passed one new law that benefits pass-through entities, such as partnerships and S corporations.
There are more than 45,000 businesses in Arkansas that could choose to voluntarily pay this state tax. Although their state taxes would go up by $4 million, they would save $50 million in federal taxes.
Arkansas is in a position to lower taxes because we consistently adopt conservative budgets, and we never deficit spend.
If only Congress did the same, the country would be in much healthier fiscal condition.
From the Capitol, it is always my greatest honor and most sincere privilege to serve you as your state Senator. This is Keith Ingram.