Gov. Sarah Sanders signed into law Wednesday (June 19) a series of significant tax cuts that will result in personal and corporate taxes falling by a half-percent at the top income rates. The highest personal income tax rate has been dropped from 4.4% to 3.9%, and the top corporate tax rate from 4.8% to 4.3%. The financial impact of the tax cuts is $256.1 million annually for the personal income tax reduction and $66.2 million annually for the corporate tax reduction. Over 1.1 million Arkansans will benefit from the tax rate reduction.
Also, about $290 million of the state’s $708.1 million estimated budget surplus in the current fiscal year that ends June 30th will be placed in the Arkansas Reserve Fund Set-Aside fund.
“Our goal should never be to look at the minimum but how to move those people in that bottom area to make more money. That’s why we focus so much on education workforce development and we’re going to continue to look to responsibly phase out the state income tax as a whole,” Sanders said.
Homestead Tax Credit Increase
Lawmakers also passed a law that will provide a larger tax credit for homeowners. The homestead tax credit was raised by $75 to $500 in the special session. That will cost an estimated $46 million.
The special session called by Gov. Sanders started Monday and was completed in three days.
“We’ve cut taxes three times in the past 18 months. At the same time, we have balanced our budget and grew spending this past year by only 1.76% far below the 3% average,” Sanders added.
Funding for Arkansas Game & Fish Commission
Lawmakers approved a measure to fund the Arkansas Game & Fish Commission budget for the next fiscal year. The House and Senate had disagreed on the executive director’s salary cap in the recent fiscal session, but in the special session they settled on a compromise. The Arkansas Game and Fish executive director’s salary will be capped at $170,437.
Gov. Sanders will be a guest on this week’s edition of Capitol View and Talk Business & Politics.
