The budget chairman says there are safeguards in place to speed up tax cuts

State Sen. Jonathan Dismang, R-Beebe, says he’s comfortable with accelerating the tax cuts the governor wants to accelerate with $1.6 billion in surplus on hand and money in a state rainy day fund, but he’s hesitant to commit with new costs, including teacher salaries, until more data is collected.

Appearing on this week’s edition of Talk Business & Politics, Dismang said he also wants voters to be reminded that there are other tax cuts for low- and middle-income Arkansas residents that have already been implemented.

“We are speeding up. In fact, we have already put in place until January 1, 2022 a tax cut for low incomes and a tax cut for middle incomes. When we combined [tax] tables, they amounted roughly, if I remember correctly, to about $150 million just for all those individuals who made less than $84,000 a year,” he said.

Gov. Asa Hutchinson called a special session Aug. 8 to consider an accelerated schedule for previously planned tax cuts to lower the state’s top rate from 5.5 percent to 4.9 percent. Dismang says that this and other cuts — including corporate tax cuts, adoption of a federal depreciation mechanism for equipment purchases and tax breaks on the first $10,000 each citizen earns — can happen now with the growing budget surplus.

“We currently have over a billion dollars in our rainy day fund. There is $1.6 billion that will essentially be a new surplus. We can put a significant portion of that aside to ensure that if we have a turnaround and collections start to dry up that we have the ability to fund the state government at the level it needs to be funded. So I feel like we have the right protection in place to be able to take advantage of the environment that we’re in right now as far as revenue goes,” Dismang said.

Gov. Hutchinson says there is no legislative consensus on special session teacher pay raises. Arkansas teachers currently have a minimum wage of about $36,000. Surrounding states have higher salaries and there is a national teacher shortage.

Dismang said there have been salary increases for Arkansas teachers and improvements in benefit packages. He said the Legislature is currently in the midst of an adequacy study, which helps lawmakers set recommendations for school-related spending. He wants that process to end, which won’t happen before the special session.

“Right now we’re in the middle of what’s called an adequacy study. It’s a legislative body, both the House and the Senate are looking at this, and one of the things they’re going to look at is what we need to do for teachers. Just like we’ve done in the past, we’ll follow the procedures before and that’s something we’ll look at when we get into the regular session.

“It really wasn’t anything against teachers, per se, it was against wanting to increase spending in this special session. Members were comfortable looking at declining revenues, but again not increasing running costs. Also, there are many unknowns about how it will affect the school district. We didn’t want to put mandates on school districts that they couldn’t meet as long as they could continue the teacher pay raises,” Dismang said.

Hutchinson also said he was considering potential abortion-related issues in the special session after the Supreme Court’s decision to overturn Roe v. Wade. Dismang said those items are likely related to the budget, not politics. He thinks the policy should wait for the regular session in January 2023.

“There has been some discussion about matching the adoption credit with the federal one. I think that again is part of what the governor is talking about, but I haven’t had a conversation with him directly. And then the crisis pregnancy centers,” Dismang said.

“I do not think so [abortion exemptions] it will be discussed now, but I think it should be discussed in the future. You know, since I’ve been here, I’ve felt like there should be an exception for rape and incest, and I know we passed a bill that doesn’t have that, but I think it’s something we should consider, but I don’t think it’s something , which we need to do during this special session,” he added.

You can watch Senator Dismang’s full interview below.

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