Tax Reform

State of the State: Arkansas

Amid frightful winter storms coating a large part of Arkansas and the South, Arkansas Governor Asa Hutchinson delivered his State of the State address in Little Rock on January 10. Speaking before members of the 91st General Assembly and his administration, Governor Hutchinson proudly proclaimed, The state of our state…is exceptional.” His comments covered a wide swath of issues, including economic growth, the need for further tax reform, expanding the impact of higher education, and Arkansas’ role in the global marketplace. While highlighting that 55,000 more Arkansans have jobs than just two years ago, and that 50,000 fewer collect food stamps compared to last year, the governor did not hold back in his call for continued reform. The overarching message was the need to continue improving Arkansas’ ability to thrive in the midst of an increasingly competitive economy.

Pledging to help the economy grow for all Arkansans, Hutchinson stressed the need to overhaul the tax code and called for a new Blue Ribbon panel that will recommend pro-growth tax reform embracing simplicity, fairness, and competitiveness.  Arkansas’ capability to maintain and expand its global role in agriculture, energy, medicine, retail and manufacturing requires broad income tax relief and regulatory reform. Just three years ago, Arkansas ranked 26th in Economic Outlook in the Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, but pro-growth tax and regulatory reforms pushed them to 22nd place in 2015, and to 20th in the 2016 edition of the publication.

The governor noted Arkansas has more people working today than at any time in state history, and the economy grew last year at a faster rate than three-quarters of states. Acknowledging the significant impact that income and capital gains tax reforms have had on job growth and businesses choosing to locate in Arkansas, the governor still pressed for more:

We provided a $100 million middle class tax cut. We have moved Arkansas to number one in the nation in computer science education…And with all the change in and out of Arkansas, we need to make sure that Arkansas plays a leading role in shaping the future.

He urged a focus on efficiency and service in reforming state government, calling for the elimination of duplicative boards, commissions, and state agencies, to more wisely use taxpayer dollars while also delivering better core services. Turning to education, Governor Hutchinson indicated he supports diverting tax dollars to cover tuition for two-year college and technical school for high school graduates pursuing a “high need job skill or degree.” Lawmakers should take special care to examine the costs, performance, and outcomes of similar programs.

The governor also requested increased funding for child and foster care services and programs, as well as $5 million for programs for the mentally or developmentally disabled. Hutchinson concluded by exhorting lawmakers to set aside the partisan politics and to strive to represent all the people of Arkansas.

ALEC applauds Governor Hutchinson’s eagerness to pursue pro-growth economic reform in Arkansas. A continued emphasis on tax reform and increased government efficiency will attract more businesses and jobs to Arkansas, create opportunity and expand prosperity for all.

In Depth: Tax Reform

Mainstream economists, small business owners and taxpayers across the country understand that growth-oriented reforms mean increased opportunity for all. As demonstrated by the annual Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, sound tax and fiscal policies are critical to economic health, allowing businesses and households to flourish. A…

+ Tax Reform In Depth