Governor says he opposes grocery tax hike

LITTLE ROCK—Arkansas’ governor said Thursday that he’s opposed to raising the state’s sales tax on groceries, likely killing an idea that some lawmakers were considering as a possible way to make room for further income tax cuts.

Republican Gov. Asa Hutchinson announced his opposition to raising the state’s 1.5 percent tax on groceries in a letter to the Legislative Tax Reform and Relief Task Force, which has been looking at way to overhaul Arkansas’ tax code and push for more income tax cuts. The panel last week voted to study proposals to raise the tax and, in conjunction, create a credit or rebate for moderate and low income residents to offset the hike. The sales tax is set to decrease to .0125 percent in January.

“I have been a long-time

and consistent supporter of eliminating the sales tax on groceries. In fact, the final reduction of the sales tax is part of the budget I presented to the Legislature and was adopted by the General Assembly earlier this year. My position has not changed,” Hutchinson wrote. “I do not support raising the sales tax on groceries.”

Hutchinson had initially stayed out of the debate on the grocery tax hike, saying he didn’t want to interfere with the panel’s discussions. But the possibility of raising the tax drew opposition from Democrats and Republicans. Jan Morgan, a gun range owner challenging Hutchinson in the May 22 primary, criticized the idea, as did Jared Henderson, who’s running for the Democratic nomination to unseat Hutchinson.

Hutchinson, who has successfully pushed for lowerand middle-income tax cuts, has proposed cutting income taxes for the state’s top earners by a total of $180 million.

Republican Sen. Jim Hendren, who co-chairs the task force, said the panel has not made any recommendations and only voted to study the issue. He said it will continue studying the proposal, but noted the challenge it will face given Hutchinson’s opposition.

“I think we’ll continue to look at it, but it makes it clear there’s a high political hurdle to get over if there’s going to be any significant change, as there probably should be,” said Hendren, who is the governor’s nephew.

Hutchinson’s Democratic predecessor, former Gov. Mike Beebe, had successfully pushed for gradually cutting the grocery tax rate from 6 percent during his two terms in office. The cut that takes effect in January is the result of a 2013 law that linked the reduction to a drop in the state’s desegregation payments to three Little Rockarea schools.