Governor Hutchinson has cut taxes in every regular session of the legislature since he was sworn into office. In 2015, he signed a $100 million tax cut for the middle class – the largest income tax cut in Arkansas history. In 2017, he signed a $50 million tax cut for low income Arkansans – the second largest income tax cut in state history. These tax cuts were NOT offset, meaning NO other taxes were raised, as some have unfortunately and inaccurately claimed.
In 2017, the Governor strongly supported and signed into law a $13 million tax cut for veterans. The Military Retirement Income Tax Cut exempts all veteran retirement pay from state income attracting veterans to our state. At the same time, it was important to offset this tax cut in order to focus on further cutting the state income tax rate. And most Arkansans would agree that eliminating income tax on military retirement pay was the right thing to do.
Future Tax Cuts: The Governor announced a proposal in early 2018 to cut the income tax rate once again. This cut would bring the top marginal rate in Arkansas from 6.9% to 6%, a $180 million cut, making Arkansas more competitive with our surrounding states. The cut will be taken up by the General Assembly in the 2019 session.
Most recently, the Governor has proposed increasing the Homestead Tax Credit for all Arkansans from $350 to $375 to provide even more relief to Arkansas homeowners. This proposal will also be taken up by the General Assembly in the 2019 session.
The Governor’s record on tax cuts is clear and consistent, and his approach has been responsible – ensuring that essential services remain intact and the state’s budget in good standing. As for the citizens of our state: Arkansans pay fewer taxes today than before Governor Hutchinson took office in January 2015.
Before HB1267, the current law mandated a minimum charge of $1 for used tires, $2 for new tires, and $5 for larger tires. However, it did not define a maximum charge. In fact, some tire dealers across the state have exploited this loophole by consistently overcharging taxpayers by as much as $10 - $15 per tire, in some cases.
The bill the Governor signed into law provided accountability and oversight of tire dealers and implemented safeguards for taxpayers by eliminating that loophole. It created a flat fee of $3 for all tires and nothing more. Taxpayers will no longer be subjected to a system that exploited their hard-earned money.
In addition, and this is important to note, the funds collected are only used to support the program – the actual tire management, storage, transportation and processing. This money DOES NOT go into the General Revenue for the state.
The debate over online sales tax is an issue that will be handled by Congress or the United States Supreme Court. The Governor believes fairness is the issue surrounding the debate. The playing field should be level for both sides – online and brick-and-mortar. Internet retailers are not subject to sales tax collections, but Main Street Arkansas retailers are. In many cases, consumers use local businesses as “show rooms” for products but make their purchases online to avoid having to pay sales tax. This is certainly a dramatic disadvantage for local “mom and pop” shops – entrepreneurs who are the backbone of many Arkansas towns. In the event that Congress does pass legislation forcing online retailers to collect and remit taxes or the Supreme Court overturns its 1992 ruling, the Governor has consistently and clearly indicated that revenue from online sales tax could be used to help lower the income tax rates in the state.
As for highway funding, the Governor has repeatedly said that ANY tax increase to pay for highways should go before the people of Arkansas for a clean, up or down vote. Arkansans are intelligent and can decide for themselves whether or not they want to go this direction.
In 2016, Governor Hutchinson proposed a plan to fund highways without raising taxes or introducing any new taxes to Arkansans. That bill, the Arkansas Highway Improvement Plan of 2016, passed with overwhelming bipartisan support in 2016.
Governor Hutchinson supports the work of the Legislative Tax Reform and Relief Task Force that was established by the legislature as part of his $50 million income tax cut in 2017. Substantive reform to our state’s tax code is an extraordinarily important – and difficult – undertaking, but the Governor believes the task force is on the right path.
As part of the process, member of the task force are evaluating many different factors of the tax code, including several exemptions, many of which have been in place for decades and are no longer relevant in today’s economy.
Members have laid all exemptions on the table – the exceptions to fairness – and are now asking the question: Are these justified in today’s economy? These conversations are an important step in their evaluation and simply part of the overall process of reform. Furthermore, the task force’s recommendations aren’t due for several more months, and the Governor does not have to accept their recommendations.
In fact, there are many exemptions that the Governor believes are justified, including agricultural and manufacturing inputs, as well as the state income tax exemption for Texarkana. In his judgment, these exemptions are worthy of continuation because they are supported by a rational basis, and they help move our economy forward.
Unfortunately, some have chosen to misrepresent the facts and, instead, are using scare tactics to undermine the ultimate mission of the task force, which is to provide relief and fairness to the Arkansas taxpayer.
The Governor, with regards to tax cuts, remains focused on lowering the state’s income tax rate. Although Arkansas has made great strides in this area under Governor Hutchinson’s leadership – including $150 million in cuts to the income tax rate already – there’s still much more to do in terms of making Arkansas more competitive with our surrounding states. That’s why, earlier this year, Governor Hutchinson proposed lowering the state’s top individual income tax rate from 6.9 percent to 6 percent, a $180 million cut, when the Legislature returns for the 2019 session.
Read the Governor's own words on why he supports keeping the grocery tax exemption:
"I have been a long-time and consistent supporter of eliminating the sales tax on groceries. In fact, the final reduction of the sales tax is part of the budget I presented to the legislature and was adopted by the General Assembly earlier this year. My position has not changed.
"I do not support raising the sales tax on groceries.
"As you know, the sales tax on groceries has continued to decrease over the last several years and currently sits at 1.5 percent. Under Arkansas law, sales tax on groceries is scheduled to decrease once again to 1/8th of a percent on January 1, 2019.
"This exemption eases the financial burden on low-income Arkansans, seniors, and those who are on a limited budget. In my judgement, it is an exemption worthy of continuation."
Since 2015, Governor Hutchinson and the Arkansas Economic Development Commission have signed more than 330 agreements with companies who’ve invested in Arkansas and are creating jobs for Arkansans. The overwhelming majority of these agreements have been with Arkansas-based companies that are expanding or national companies that wish to relocate or expand in our state.
International Investments are key to a growing economy as well. States from all over the country compete for these jobs and investments in order to grow and expand their economies. Arkansas, under Governor Hutchinson, is now competing – and winning – on a global scale and in a number of different industries from agriculture and defense to technology and manufacturing.
Mexico, Canada, France, Germany, Japan, and China – to name a few – have all presented tremendous economic opportunity for our state, and the Governor has capitalized on those opportunities for the people of Arkansas. And that includes five companies (out of more than 330 agreements) from China over the past three years that will create 1,650 jobs and invest more than $1.4 billion into the Arkansas economy.
When companies that follow the rules want to come to Arkansas to create jobs, that is a good thing for the entire state, and Governor Hutchinson will always support that.
Under the leadership of Governor Hutchinson, Arkansas has created more than 60,000 jobs. We’ve witnessed the highest employment in our state’s history. Our population has topped 3 million for the first time meaning more Americans are calling Arkansas home. Fewer people are on Medicaid than when the Governor took office. And in 2017, Arkansas was one of only three states to notch both 3% wage gains and record-low unemployment.
The Governor’s focus on computer science education is paying off, as well. Arkansas is recognized nationally as the leader in computer science education, and Arkansas is the ONLY state to implement all 9 standards for computer science education from code.org. As a result, course enrolment has skyrocketed more than 460% since 2014. The level of interest has grown so quickly that some colleges and universities, like Lyon College in Batesville, are bringing back computer science as a major.
Not only are we developing a tech-savvy workforce, but our students will have a leg up on other states to compete for these jobs – right here in Arkansas.
All-in-all, Arkansas’s economy is booming, and Governor Hutchinson’s not finished yet.
The Governor supported the Religious Freedom Restoration Act and signed it into law. In fact, Arkansas’s religious freedom bill that the Governor signed is one of the strongest in the nation. Governor Hutchinson pledged to sign a bill that mirrored the federal religious freedom law, and that is precisely what he accomplished. In fact, the Alliance Defending Freedom, a conservative organization that is seen as a leader on this effort across the nation said:
“Government should protect people’s freedom to follow their beliefs in their lives and work. We commend the governor’s decision to support a law that does this. Government shouldn’t be able to punish Americans for exercising basic civil rights. Religious freedom laws ensure that freedom gets a fair hearing, and they limit the government’s power to intrude on our liberties. We hope other states join Arkansas and many others in adopting similar laws."
The Governor does not support Sharia Law in Arkansas Courts – and it does not exist in our courts. The Constitution of the United State is the law of our land and the compass of her courts. No one knows that better than Governor Hutchinson, a former U.S. Attorney under President Reagan. We do not, nor will we ever, have Sharia Law dictate our courts in Arkansas.
When a bill made it to his desk in 2017 to ban Sharia Law from our courts, the Governor did not veto the bill, but rather allowed the bill to go into law without his signature. His reason for not signing the bill was simple: It was a solution in search of a problem.
Governor Hutchinson, as the first and former Undersecretary for Homeland Security in charge of Border Security, has never and will never support sanctuary cities or campuses in the State of Arkansas. Not only does he understand the importance of immigration enforcement, but he has the experience to back it up. The Governor believes local law enforcement should always cooperate with federal law enforcement to enforce the immigration laws of our land. Period. Anyone who attempts to misrepresent these facts is doing so with the sole purpose of misleader Arkansans.
In 2017, two pieces of legislation were filed to ban sanctuary cities and sanctuary campuses in the state. Neither bill made it out of the chamber’s committee. Need bill received a vote on the floor in either the House or Senate. Neither bill made it to the governor‘s desk.
A lot of politicians talk about protecting the Second Amendment, but Governor Hutchinson has a track record of getting results. When the Second Amendment was under its greatest attack, following the tragedy in Connecticut, Governor Hutchinson stood firm and defended the Second Amendment – spending months heading the NRA’s National School Shield initiative to find ways to better protect our schools and our children.
Under Governor Hutchinson, Second Amendment rights in Arkansas have been strengthened. In 2017, he signed Arkansas’s enhanced conceal carry law, which provided Arkansans with the ability to carry in more places than ever before.
He’s stood up for and will continue to fight for your rights guaranteed to all of us by the U.S. Constitution. Whatever the reason, whether it’s hunting with our kids or protecting your home, as the Second Amendment says: The right of the people to keep and bear arms shall not be infringed. And as long as he’s governor, they won’t.