From the historic hallways of the most beautiful state Capitol in our nation, this is Senator Keith Ingram.
The governor has announced his intentions to call a special session of the legislature on August 8.
The main purpose is to further reduce income taxes across the board, including broad relief for low-income families and proposals to lower corporate income taxes.
The governor also is floating the possibility of salary increases for teachers, which I support.
However, there is not as much support for teacher pay raises as there is for tax cuts.
We’ll do our best to help teachers during the special session, but any significant pay raises may not happen until the legislature meets in regular session in January.
The legislature will also consider school safety measures, in response to the growing number of mass shootings in schools across the nation.
The impetus for the tax cuts comes from the state’s enormous budget surplus.
We just completed Fiscal Year 2022 with a surplus of more than $1.6 billion, the largest in state history.
Last year’s surplus of $945 million was also much larger than usual.
The large surplus has allowed us to build reserve funds, which boosts our bond ratings and prepares the state financially in case of a sudden economic downturn.
The surplus also has allowed the state to grant stipends to law enforcement officers and to match federal highway funding.
In the August special session we’ll consider moving up the effective dates of the income tax cuts we passed back in December, when the legislature voted to lower the rate to 4.9 percent in 2025.
If we make that tax cut retroactive to January 1 of 2022, it will immediately save Arkansas taxpayers $295 million a year.
A similar proposal would accelerate a reduction in the top rate for corporate income taxes, saving those businesses $18 million this fiscal year and almost $28 million next year.
On top of those corporate income tax reductions, a proposed change in depreciation rules would save Arkansas businesses $29 million this year and an additional $21 million next year.
Low-income and middle-income taxpayers would save $90 million this year. One fault with the governor’s plan is that tax cuts for low-income and middle-income families would be temporary, and would not be in effect next year.
Everyone likes tax cuts, but we must be aware of the potential danger of cutting off revenue to essential services.
We’re flush with money now because the federal government has provided Arkansas with massive amounts of Covid relief funding.
Let’s not get carried away. We need to balance all of the needs of Arkansas families and make thoughtful decisions.
We can do better for families who are caring for someone with developmental or intellectual disabilities. We can do better for our schools and our law enforcement officers.
From the Capitol, it is always my great honor and sincere privilege to serve you as your state Senator. This is Keith Ingram.