State lawmakers are expected to pass key tax components of Gov. Asa Hutchinson's legislative package this week, the fourth of this year's regular session.
In interviews Friday, Senate President Pro Tempore Jonathan Dismang, R-Searcy, and House Speaker Jeremy Gillam, R-Judsonia, said they expect their chambers to hold final votes on Hutchinson's proposed low-income tax cut early this week.
A week ago, the House voted 90-2 to pass House Bill 1159 and the Senate voted 33-0 to pass Senate Bill 115. The bills are identical, but each must be approved by both chambers, then sent to the governor for his consideration, before they can become law.
The support is "a great example of working together on both sides to get near-unanimous support from both chambers," said J.R. Davis, a spokesman for the governor.
The legislation would cut taxes for 657,000 Arkansans who make less than $21,000 a year in taxable income, including 120,000 people in the lowest tax bracket who no longer would pay state income taxes.
The bills would become effective for tax years starting Jan. 1, 2019, the middle of fiscal 2019. The cuts are projected to reduce general revenue by $25.25 million in fiscal 2019, which starts July 1, 2018, and $50.5 million each full year thereafter, according to the state Department of Finance and Administration.
The Republican-majority House last Tuesday quashed legislation that was presented as Democrats' alternative to Hutchinson's income tax cut. House Bill 1161 offered a higher earned income tax credit for low-income residents.
Gillam said members are confident enough of the state's financial position to enact the governor's proposal.
"The way the things have gone with some of these numbers in the last month or two, I think people feel a little more comfortable where the revenues are at," he said.
So far in fiscal 2017, individual income tax collections have increased by $33.4 million, or 2.5 percent, over the same period last fiscal year to $1.39 billion and exceeded the state's forecast by $2.8 million, or 0.2 percent.
Sales and use tax collections have increased by $14.7 million, or 1.3 percent, over the same period in fiscal 2016, to $1.18 billion, but they're $32.1 million, or 2.7 percent, below the state's forecast.
In 2015, the Legislature approved Hutchinson's plan to cut individual income tax rates for taxable incomes ranging from $21,000 to $75,000 a year, which state officials projected would reduce general revenue by about $100 million in fiscal 2017.
If lawmakers approve the income tax cut bills, Davis said 90 percent of Arkansas taxpayers will have received a tax cut under the 2015 and 2017 measures.
Dismang said he expects an additional tax measure to be considered by the Senate Revenue and Taxation Committee this week.
Senate Bill 120 would exempt military retirement and survivor benefits from state income taxes. It would also cut the special excise tax on soft-drink syrup, increase the sales tax levied on candy and soft drinks, levy income taxes on unemployment compensation and impose a sales tax on some digital products.
A House committee approved House Bill 1162, an identical bill, last week.
"The military retirement bill -- there's offsets in there so it's not going to carve out general revenues in a negative way," Gillam said. "That puts us in a good position for the members to feel comfortable."
The tax changes in SB120 and HB1162 are revenue neutral, according to a Department of Finance and Administration report.
In the House, Gillam said he expected a vote on HB1162, along with proposals to require voters to show a photo identification before voting and to change the higher education funding formula to reward colleges and universities for student advancement over enrollment.
The House Judiciary Committee is also expected to consider House Bill 1249 by Rep. Charlie Collins, R-Fayetteville. The bill would require public colleges and universities to allow staff with concealed carry licenses to carry handguns.
Neither Gillam nor Dismang said they know what to expect regarding proposed legislation on medical marijuana.
Voters approved the Arkansas Medical Marijuana Amendment in November. Several state agencies are developing rules to implement the use of the drug for medical purposes. For example, the state Board of Health and the Medical Marijuana Commission both considered rules Thursday.
Sen. Jason Rapert, R-Bigelow, filed a bill late Thursday to halt implementation of the state medical-marijuana program until 180 days after the federal government changes the law to allow it.
Rep. Douglas House, R-North Little Rock, denounced Rapert's effort in an interview. House was designated by Gillam to file bills necessary to implement the voter-approved amendment.
House filed several bills Thursday.
House Bill 1370 would allow the Medical Marijuana Commission to regulate artwork, building signs, product display -- including shapes and flavors, indoor displays that can be seen from outside a dispensary or cultivation facility -- and other forms of marketing.
House Bill 1369 would ensure that the state is reimbursed for enforcement and regulation before other entities receive money from the medical-marijuana program. Sen. Missy Irvin, R-Mountain View, has said she does not want Arkansas' program to cost the state money.
House Bill 1371 would mandate that the Medical Marijuana Commission conduct a criminal background check on any individual who owns 10 percent or more of a dispensary or cultivation facility, in addition to an owner, board member, or officer of the dispensary or cultivation facility.
Gillam said he expected those bills to be considered in the House Rules Committee. Neither Dismang nor Gillam said they know whether other members will file bills to impede the program.
Votes on tax cuts are "the biggest known," Dismang said. "I think there are several unknowns about what members will be filing regarding medical marijuana."
A Section on 01/30/2017
