- Associated Press - Sunday, February 9, 2014

LITTLE ROCK, Ark. (AP) - With a tax cut plan that’s long on ambition but short a specific timetable, Mike Ross is trying to follow the same script that ended with fellow Democrat Mike Beebe winning the Arkansas governor’s race eight years ago. Republican rival Asa Hutchinson is just as eager to flip the script and avoid the same fate he suffered at Beebe’s hands in that race.

Early in their campaigns for governor, the two former congressmen are focusing on the state’s income taxes with competing plans that call for gradual cuts. They’re opening a debate that could continue up until November, and showing how much of a shadow the 2006 governor’s race casts on this year’s matchup.

Both are openly mimicking Beebe, who defeated Hutchinson after vowing to cut the state’s sales tax on groceries over time, with plans that call for attacking the income tax in the same manner.

Ross, the only Democratic candidate for the state’s top office, last week unveiled a nearly $575 million proposal to gradually reduce the state’s income taxes by making retroactive a 1997 law that adjusted brackets for inflation. It’s a move that he argued would lower the percentage of taxpayers in the top bracket from 34 percent to 14 percent.

Saying he’d phase in the tax cut as allowed, Ross cast his proposal as following the model Beebe set in the 2006 governor’s race. The two-term Democratic governor has successfully pushed for the grocery tax’s reduction from 6 percent in 2007 to 1.5 percent today.

“There was no time limit or timeframe put on removing the sales tax on groceries, but we’ve done almost all of it in eight years,” Ross said. “My goal, over the eight years I would be governor, would be to hopefully fully implement or come close to implementing this plan, but it will depend on revenue growth.”

The proposal came months after Hutchinson detailed his own proposal to reduce the state’s individual income taxes, starting with a $100 million cut for middle-class workers in his first year if elected. Hutchinson, who leads his two rivals for the GOP nomination in money and organization, has also invoked Beebe’s approach to cutting the grocery tax.

“Governor Beebe has set the mark for how you can do that without adversely impacting services and the essential responsibilities of our state toward education, prisons, and providing a safety net for our citizens,” Hutchinson told reporters last summer. “The answer is you do it gradually with economic growth and you trigger it so it does not adversely affect what we need to do as a state. He did that with the sales tax on groceries. We can tackle the income tax the same way.”

In what will be a familiar refrain in the coming months, Ross and Hutchinson are dismissing each other’s proposals as not serious. Ross says Hutchinson is promising too much, too soon, with his tax cuts, while Hutchinson says Ross is only offering voters vague promises and no specifics.

The competing proposals set the stage for a tax debate where Ross and Hutchinson are each trying to borrow their rival party’s ideas to some extent. By focusing on income tax reduction, Ross is championing a cause that Republicans have been pushing for in the state Legislature in recent years. Hutchinson’s push for a gradual reduction means he’s embracing an approach that he derided during his unsuccessful bid for the state’s top office.

It’s also coming on the heels of a tax cut-happy legislative session last year where lawmakers approved a package of reductions that will eventually cost the state about $140 million a year. Beebe signed the reductions into law, but also warned lawmakers at the time that the cost of the cuts could be a problem later for the state.

“If (Republican lawmakers’) assumptions are right, then it’ll be taken care of. If not, they’ll have plenty of opportunity to fix it,” Beebe said last year.

The race for governor could ultimately hinge on how much voters are willing to add to that price tag, and by what means.


Andrew DeMillo has covered Arkansas politics and government for The Associated Press since 2005. Follow him on Twitter at www.twitter.com/ademillo

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