- Associated Press - Thursday, January 12, 2017

LITTLE ROCK, Ark. (AP) - Arkansas legislative leaders said Thursday they plan to move quickly on Gov. Asa Hutchinson’s $50 million income tax cut proposal, but said there are concerns among lawmakers about part of his planned tax break for military veterans.

The top Republican in the state Senate said he’ll bring Hutchinson’s proposal to cut taxes for Arkansans making less than $21,000 a year before that chamber’s Revenue and Taxation Committee next week. The legislation also would create a task force to recommend further tax cuts before the 2019 session.

“We’ve got to have clarity on the budget as we move through the session. It will give us some clarity,” Senate Majority Leader Jim Hendren said.

House Revenue and Taxation Committee Chairman Joe Jett also said he expected his panel to take up the proposal in the next couple weeks, and that any further reductions would need to wait until later on in the session that began Monday.

“We’re not going to do anything to tear the budget up,” said Jett, a Republican.

It’s unclear whether the Legislature will move as quickly on legislation to exempt military veterans’ retirement benefits from the state income tax. Hutchinson, a Republican, has proposed paying for the $13 million break by closing other exemptions.

A part of that plan that would raise sales taxes on manufactured housing has drawn complaints from some lawmakers who say it would hurt poor and rural Arkansans.

“There definitely is some resistance there and I’ve heard several members who are concerned about it,” said Sen. Jake Files, a Republican who chairs the Senate Revenue and Taxation Committee.

Hutchinson said he was open to discussing any alternative lawmakers may have, but said the tax break must be offset by closing other exemptions.

“If there’s a better exemption that somebody else wants to close, then we’re open to discussion on it,” the governor said.

At least two lawmakers who had called for deeper income tax cuts than Hutchinson has proposed dropped their efforts after the governor vowed to push for broader tax code changes later. But there are still likely to be several competing plans going before the tax panels.

Democratic Rep. Warwick Sabin and Files introduced legislation Thursday to create a tax credit for low-income residents. Sabin said he was hopeful the measure could be considered at the same time as Hutchinson’s income tax cut plan.

“It targets the same population and I think the members of the Legislature deserve to have the opportunity to consider these proposals on their merits,” Sabin said.


Follow Andrew DeMillo on Twitter at www.twitter.com/ademillo

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