(The Center Square) – Arkansas Gov. Asa Hutchinson is asking lawmakers to pass reductions in the corporate and income taxes and establish a $50 million grant program for school safety when they meet Tuesday in a special session.
The money will come from a $1.6 billion surplus from fiscal year 2022. Hutchinson’s proposal would take the top individual tax rate down to 4.9%. The decrease would be retractive to Jan. 1, 2022. The corporate tax rate would drop to 5.3% beginning Jan. 1, 2023.
The governor is also asking lawmakers to approve a permanent $150 tax credit for low and middle income residents.
“As inflation rises and the cost of living increases, Arkansans need more money in their pockets,” Hutchinson said in a statement. “With a record surplus in the last year fiscal year, we have the ability to provide financial relief and ensure our children can be protected in their schools.”
The governor is also recommending a bill that would align the state with the federal depreciation schedule, a move Hutchinson said would accelerate the depreciation of assets for business owners.
The $50 million proposed school safety grant recommendation is based on a report from the School Safety Commission given to Hutchinson earlier this week.
Arkansas Senate Democrats proposed using $600 million of the surplus to raise teacher salaries. The plan would increase the starting salary for teachers from $36,000, to $42,000.
“After raising teacher pay, we can use our remaining billion-dollar surplus for other essential needs like adequately paying our bus drivers, custodians, and other classified and support staff,” Rep. Reginald Murdock, D-Marianna, said in a news release. “The RAISE Act is a big step toward improving education throughout our state, but it’s just the beginning of what we need to do.”
The Arkansas Legislative Committee rescinded a $500 million allocation of COVID relief funds last month and recommended school districts use the money to give teachers a $5,000 bonus, classified staff a $2,500 bonus and part-time staff members half of what their full-time counterparts receive.