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Arkansas tax cut plan falls short of passing state Senate

February 5, 2019

LITTLE ROCK, Ark. (AP) — A $97 million proposal to cut Arkansas’ top income tax rate failed in the state Senate on Tuesday, dealing a setback to the Republican governor on one of his key agenda items.

The majority-Republican Senate voted 25-5 in favor of the tax cut bill , two votes shy of the 27 needed to advance it to the House. The proposal, unveiled by GOP Gov. Asa Hutchinson last week, calls for cutting the state’s top income tax rate from 6.9 percent to 5.9 percent over the next two years.

Senate President Jim Hendren, a Republican, told reporters the Senate would take up the proposal again but did not know when.

“Twenty-seven out of 35 on something as controversial as tax cuts is not an easy lift, but I’m confident we’ll get there,” said Hendren, who is also the governor’s nephew.

Two dozen Republicans and one Democrat voted for the plan, while all the no votes came from Democrats. At least one Republican said he wouldn’t back the tax cut proposal until there’s a plan to increase funding for the state’s highways. Hutchinson and legislative leaders have called highway funding a priority for this year’s session, but so far no plan has emerged.

“I’m committed to getting something for highway infrastructure,” said Sen. Bill Sample, one of two Republicans who did not vote on the proposal.

Hutchinson said he was disappointed that two Republicans didn’t vote for the proposal, but said he remained hopeful.

“We recognize that achieving a three-fourths vote is a challenge. The fact that we got within two votes on the first ballot shows that it continues to have momentum,” he said in a statement. “This is all part of the legislative process and debate, and we look forward to it being called back.”

The proposal failed after the Senate rejected an effort by Democrats to scale back the benefit of the tax cut on the state’s highest earners. Democrats have said the tax cuts are coming at the expense of other needs in the state that aren’t being fully funded.

“Nobody is going to put on their tombstone we lowered the top rate to 5.9,” said Democratic Sen. Will Bond, who voted against the proposal.

Sen. Eddie Cheatham, one of three Democrats who didn’t vote on the measure, indicated he’d be more likely to support it if other needs, such as pre-kindergarten, received additional funding by either lowering the cut or finding money elsewhere.

“I think some of us think there might be some give and take,” Cheatham said.

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