Arkansas prepares for significant tax cuts

[The Northerner]

LITTLE ROCK, Ark. – Arkansas is poised to become one of the first states in the nation to enact a significant tax cut this year, showing the sentiment for scaling back government even in places where state spending is limited and no fiscal crisis exists.

State representatives on Monday are expected to approve cutting the grocery tax, the centerpiece of a $35 million tax cut package. The action comes days after lawmakers reached an agreement with Democratic Gov. Mike Beebe on reductions of five other taxes likely to be approved later this week.

The amount of the cuts doesn't compare with the deep reductions proposed in some larger states, especially those with fiscal problems that are trying to attract new businesses. But it shows the far-reaching impact of the anti-spending backlash in the 2010 election that swept more Republicans into office across the nation. The cuts could be enacted so rapidly in Arkansas because the state's Democrats, including Gov. Mike Beebe and the majority that control both chambers of the Legislature, are conservative and differ little from Republican lawmakers on most fiscal issues.

"Arkansas is going to cut $35 million in taxes, have a balanced budget and adequately fund education," said Sen. Gilbert Baker, the Republican who co-chairs the Joint Budget Committee. "There isn't another state that wouldn't love to have that scenario right now."

Arkansas' government is already modest in scale; it doesn't offer the range of services provided by states such as Wisconsin and New Jersey, where heated battles over spending and employee compensation are under way. But officials decided to cut more anyway.

Read more: http://news.yahoo.com/s/ap/20110320/ap_on_bi_ge/us_tax_cuts_arkansas

[DeltaLitProf]

1. What is Arkansas doing that other states aren't?

They've been able to keep their revenue stream from dwindling the way it has in neighboring states. Could any Arkansans who have followed their political news lately comment?

[TacticalPeek]

2. Maybe it is not doing some things other states are? Rank in per capita income: 48th.

:shrug:

[ingac70]

4. You mean what are they not doing other states are.....

Ever driven on the roads in Arkansas? OMG, it will beat you to death.

[hfojvt]

3. actually it sounds good, at least in part

Admittedly my first reaction is to arch my back and hiss at the idea, but the fact that they are cutting the grocery tax does not sound bad.

So far, I cannot find an analysis of the proposal from CBPP, but one of their links led me here.

http://www.aradvocates.org/arkansas-taxes-hit-poor-twice-as-hard-as-wealthy/

Where they say this

"Huddleston said the state can reduce the burden on low- and middle-income workers by further cutting the grocery tax. Arkansas can also create a state Earned Income Tax Credit to assist working families when the economy turns around and more revenue is available."

Which seems to be part, at least, of what they are doing as the OP article says

"State representatives on Monday are expected to approve cutting the grocery tax, the centerpiece of a $35 million tax cut package."

That's not typical of Republican tax cuts, that they "reduce the burden on low- and middle-income workers".

So I am not sure it is fair to call the Arkansas Democrats 'conservative' unless it somehow turns out that Arkansas Republicans are moderates.