Governor seeks farmers’ help to keep special-session focus

Gov. Asa Hutchinson asked people attending the Arkansas Farm Bureau’s annual convention Wednesday for their help in keeping next week’s special legislative session focused on cutting income taxes and not on issues that won’t be in his call.

Those issues include debated public school issues of teaching critical race theory and use of bathrooms by transgender people.

“I am asking for your help to make sure the message is, let’s lower our income tax rate, let’s do our business and let’s go home as the constitution requires and so keep an eye on that,” the Republican governor told several hundred people in Little Rock to kick off the Arkansas Farm Bureau’s 87th annual convention. “We ask for your support.”

The session would start Tuesday.

Under Article 6, Section 19, of the Arkansas Constitution, a two-thirds vote of the 100-member Arkansas House of Representatives and the 35-member Arkansas Senate is required for lawmakers to remain in special session for up to 15 days to consider bills not on the governor’s call for the special session. Lawmakers must first complete action on the items on the governor’s call, which

they can do in a minimum of three days.

Several lawmakers said Tuesday that they plan to try to introduce legislation that would impose further restrictions on abortion and critical race theory and on other matters not expected to be on the call for the special session.

Hutchinson said at the Farm Bureau’s convention that the state has cut the top individual income tax rate from 7% to 5.9% during his nearly seven years as governor, and that’s a dramatic drop.

The bill that lawmakers will consider next week would cut the top rate to 5.5% on Jan. 1, and then to 5.3% on Jan. 1, 2023, he said.

If enacted, the legislation would mean more money in a farmer’s pocket that can be used to manage farming operations and provide for their families, and also more money in the pockets of their workers and communities, he said.

The bill also would cut the top individual income tax rate to 5.1% on Jan. 1, 2024, and to 4.9% on Jan. 1, 2025, if triggers are met.

Critics have said the bill would largely benefit high-income earners at the expense of additional investments in needed state services.

Hutchinson has countered that the bill is balanced, with all taxpayers getting a cut, and would allow state government to continue funding essential services.

Hutchinson said Wednesday that he believes in the fundamental principle that the private sector should grow more than the government sector, so “we are doing that by lowering the taxes.” His remarks drew applause at the convention, after he asked whether they supported the bill.

The income tax bill also would cut the top corporate income tax rate and consolidate low- and middle-income tax tables.

The measure also would create a nonrefundable low-income tax credit; make adjustments to smooth the tax cliff between tax tables; index the standard deduction to the consumer price index; create triggers for some individual and corporate income tax rate cuts; and rename the state’s longterm reserve fund as the catastrophic reserve fund.

Under a 2019 state law, the top corporate income tax rate will drop from 6.2% to 5.9% on Jan. 1.

The bill to be considered next week would cut the top corporate rate from to 5.7% on Jan. 1, 2023. That rate would drop to 5.5% on Jan. 1, 2024, and then to 5.3% on Jan. 1, 2025, if the tax cut triggers are met.

The state Department of Finance and Administration has projected that the proposal would reduce state general revenue by $135.25 million in fiscal 2022, which started July 1. The total reduction in general revenue is projected to increase to $307.4 million in fiscal 2023, $383.2 million in fiscal 2024, $459 million in fiscal 2025 and $497.9 million in fiscal 2026.

CRITICAL RACE THEORY

Hutchinson said at the Farm Bureau convention that there are some lawmakers who want to address other issues not on his call for the special session.

But the Arkansas Constitution allows lawmakers to consider a wide range of bills in a regular session every two years, he said.

“They talk about we ought to bring up critical race theory, which should not be taught on our schools, in our K-12 education systems,” Hutchinson said. “But that’s what our school boards are for. We don’t need a state law to address that issue in a special session.”

There also are some concerns about bathroom use by transgender people in schools, Hutchinson said.

“Let’s let our school boards act at the local level to address these issues, we don’t need state laws,” he said.

Asked afterward whether there is draft legislation dealing with transgender bathrooms, Hutchinson said a lawmaker, whose name he declined to disclose, called him about this issue and “they were very understanding that we need to keep this [session] focused.”

“I just use that as a broad illustration,” he said.

Senate President Pro Tempore Jimmy Hickey, R-Texarkana, and House Speaker Matthew Shepherd, R-El Dorado, said in interviews that they haven’t heard about any lawmaker wanting to introduce legislation dealing with transgender bathrooms in the special session.

When asked whether lawmakers should consider legislation dealing with critical race theory, Hickey and Shepherd said they want lawmakers to focus on the items on the governor’s call.

Sen. Trent Garner, R-El Dorado, and Rep. Mark Lowery, R-Maumelle, said Tuesday separately that they plan to file legislation that would ban schools from teaching critical race theory, an academic and legal framework that shows that systemic racism is part of American society.

Asked about Hutchinson’s remarks about critical race theory legislation, Garner said Wednesday, “I think the governor needs to have a wake-up call about the racist propaganda that is critical race theory.

“I think it is a critical time for Arkansas to address this issue.”

Garner said he believes lawmakers could consider the bills on the governor’s call for a special session and then consider other measures within several days.

Sen. Jason Rapert, R-Conway, said Tuesday that he plans to try to introduce anti-abortion legislation in the special session that includes a Texas-style civil cause-of-action provision.

Hutchinson said he wants to wait until the U.S. Supreme Court provides more guidance on the Texas law.