Hutchinson signs tax cut and school safety bills
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Gov. Asa Hutchinson signs three bills into law on Aug. 11. Screenshot via Arkansas Governor's office livestream.
Following the adjournment of the Arkansas Legislature's special session Thursday, Gov. Asa Hutchinson signed three historic bills into law.
- Two identical measures provide $400 million in tax relief to residents and one commits $50 million of the state's revenue surplus to making schools safer.
- The legislation is likely the last Hutchinson will sign as a term-limited governor.
Driving the news: While inflation leveled off in July, it hasn't been this high since the 1980s, and U.S. consumers are feeling the pinch.
- Reducing income taxes will help Arkansans by putting more money in their pockets, Hutchinson said.
Yes, and: Students are returning to classrooms over the next two weeks with memories of the late May shooting in Uvalde, Texas, still fresh on parents' minds.
- The money for school safety is a tangible step to protecting the state's children, albeit a way off before it will be used.
Details: The new individual income tax is now 4.9%, the lowest in state history, Hutchinson said. The highest was 7% in 2014.
- The reduction is retroactive to Jan. 1, 2022.
- The top corporate tax rate will fall to 5.3% from 5.9%, beginning Jan. 1, 2023.
- The act also creates an income tax credit of $150 for individual taxpayers with net income up to $87,000 and $300 for those married, filing jointly with net income up to $174,000.
- It also permits Arkansas to adopt a federal depreciation schedule for businesses.
The $50 million for school safety will be set aside as a grant program, so districts will be able to apply for funding to increase protections on school campuses.
- The state Department of Education will develop regulations for districts, aimed at aligning with the School Safety Commission's final report, due in October.
Meanwhile, the Democrats' plan to extend the session and introduce bills that would give teachers and school employees pay raises and bonuses, respectively, failed to gain traction. Several Republican legislators said it will be a priority in the next regular session in January.
What they're saying: "This is a typical example of kicking the can down the road," Neil Norberg, a Fayetteville High School teacher and president of the Fayetteville Education Association teachers' union, told Axios.
- He fears teacher pay will take a backseat to other issues during the regular session in January.
"We need to spend more money on education and other social services — full stop," Norberg said.