Legislative leaders announced Monday the members of a new task force that will recommend tax cuts in advance of the 2019 session.
Sixteen legislators, including 10 Republicans and six Democrats, will serve on the Tax Reform and Relief Legislative Task Force, which the Legislature and Gov. Asa Hutchinson created this year as part of legislation also containing a $50 million tax cut for low-income Arkansans.
Hutchinson overcame some Republican resistance to his tax cut — some wanted to cut taxes for upper-income earners or across the board — by tying the plan to creation of a task force to propose future cuts.
The panel is charged with studying the state’s tax system and recommending ways to modernize it, simplify it, make it more fair, make it more competitive with other states and make changes that promote job growth.
Under the legislation, the membership of the panel consists of the Senate president pro tem and the House speaker, or members designated to serve for them; the majority and minority leaders of each chamber, or members designated by them; five senators appointed by the Senate president pro tem; and five House members appointed by the speaker.
Senate President Jonathan Dismang, R-Searcy, said Monday he will serve on the panel, as will Senate Majority Leader Jim Hendren, R-Sulphur Springs, and Senate Minority Leader Keith Ingram, D-West Memphis.
Dismang appointed to the task force Sens. Joyce Elliott, D-Little Rock; Bart Hester, R-Cave Springs; Missy Irvin, D-Mountain View; Larry Teague, D-Nashville; and Dave Wallace, R-Leachville.
House Speaker Jeremy Gillam, R-Judsonia, on Monday designated Rep. Lane Jean, R-Magnolia, to serve for him on the panel.
Gillam said House Majority Leader Mathew Pitsch, R-Fort Smith, will be on the panel and that Rep. Kenneth Ferguson, D-Pine Bluff, will serve for the House minority leader.
Gillam appointed to the task force Reps. Joe Jett, R-Success; Frances Cavenaugh, R-Walnut Ridge; Bob Johnson, D-Jacksonville; Jim Dotson, R-Bentonville; and Warwick Sabin, D-Little Rock.
It will be up to Gillam to call the first meeting of the panel, which is required to meet at least once every two months.
Hendren said Monday that in light of Hutchinson’s $50 million low-income tax cut that lawmakers approved this year and his $100 million middle-income tax cut that lawmakers approved in 2015, he expects to see the task force put “a lot of focus on the upper bracket” ahead of the 2019 session. But he said he does not expect the panel’s recommendations to stop there.
“It’s a once-in-a-generation opportunity to revamp our tax code from top to bottom,” Hendren said.
Hendren said the state has too many tax exemptions that have been added one by one over the years, with no clear view of how they would interact with each other or the overall effect they would have on the fairness and competitiveness of the tax system.
“We’ve let legislators do it a bill at time, piecemeal, over decades, and we’ve not had a comprehensive review of the code,” he said.
Pitsch said he hopes the panel will examine the reasons that various tax exemptions were created and will ask, “Are they serving the citizens well?”
Although it is not part of the task force’s mission as set out in the legislation, Pitsch said he also hopes the panel will look at how efficiently state government is operating and where there may be room for savings.
Sabin, who unsuccessfully proposed a state earned income tax credit patterned after the federal earned income tax credit in 2015 and again this year, said he assumed he was named to the task force so he could again push for the idea. He noted that this year his proposal had bipartisan backing and said it received “quite a bit of interest.”
“It’s probably the most proven tax reform to move people out of poverty and to incentivize work,” he said.
Johnson, the only certified public accountant on the task force, said he regularly prepares other people’s taxes and is familiar with differences between the tax codes of Arkansas and other states. He said Arkansas’ taxes are “not as uncompetitive as people say,” but he said the brackets “move up too fast.”
Johnson said he hopes the panel will recommend changes to make the code more fair and not make filing taxes more difficult or expensive for taxpayers and CPAs.
“I just know that you have to be real careful in doing this and do it right. I want to do things that are fair to people,” he said.