Gover­nor’s new tax plan has simple name

Siloam Springs Herald Leader - - OPINION - May­lon Rice Po­lit­i­cally Lo­cal

At first blush, at least this tax plan has a name — al­beit it a name that might be linked to a sports metaphor or a chem­i­cal com­pound.

The word around the state capi­tol, down in Lit­tle Rock, the plan is called the 2-4-5-9.

What­ever that means, we are surely to learn of it shortly.

So join the un­in­formed as we ven­ture into what ex­actly this new 2-4-5-9 plan of state in­come taxes will mean for Arkansans in the fu­ture.

The Gover­nor’s tax plan, has been led by the in­com­ing state Se­nate Pres­i­dent Sen. Jim Hen­dren, R-Gravette, who also hap­pens to be the gover­nor’s nephew.

One good thing to come from the pro­jected plan, Hen­dren said last week was that state leg­is­la­tors are study­ing the plan’s “safety mea­sures” for the up­com­ing leg­isla­tive ses­sion.

These “safety mea­sures” are sup­pos­edly pro­tect­ing Arkansas from bud­get short­falls that be­set sur­round­ing and nearby states that en­acted large tax cuts.

Such as, re­mem­ber the re­spec­tive state bud­get crash-and-burn sce­nar­ios in Kansas and also nearby Ok­la­homa, nei­ther state, by the way, which bal­ances their bud­gets like the state of Arkansas — is man­dated by law to have a state bal­anced bud­get.

Hen­dren, talking to Talk Busi­ness and Pol­i­tics, last week said the work of the Spe­cial Leg­isla­tive Tax Com­mit­tee has re­fined their work in ad­vance of the next Leg­isla­tive Ses­sion which is in Jan­uary 2019.

“We have re­fined our work and what you are go­ing to see in all these re­form bills is long-range re­form and re­lief plans. There will be a se­ries of about eight or nine bills that deal with re­form and about two or three bills that have to do with tax cuts,” said Hen­dren.

As the co-chair­man of the 16-mem­ber state Tax Re­form and Re­lief Task Force that was cre­ated dur­ing the 2017 leg­isla­tive ses­sion to study the state’s cum­ber­some tax code, Hen­dren seemed op­ti­mistic that all the work in the in­terim will be seen, even by the newly elected state Sen­a­tors and state Rep­re­sen­ta­tives, as a job well done.

Al­ready, Gov. Asa Hutchin­son has un­veiled his $5.75 bil­lion bud­get for the up­com­ing 92nd Gen­eral As­sem­bly that in­cludes an av­er­age $4,000 an­nual raise for Arkansas teach­ers and a siz­able $111 mil­lion tax cut re­duc­ing the top in­come bracket from 6.9% to 5.9% by 2023.

The orig­i­nal blue­print of the gover­nor’s pro­posal, now known as the “2-4-5-9 plan,” was first floated by Hen­dren and his task force cochair, Rep. Lane Jean, R-Mag­no­lia, ear­lier this sum­mer.

But, ah the name of the plan was un­known at the time.

To keep the ex­act plan in place, some­one, prob­a­bly Hen­dren or Jean, gave the plan the tag of 2-45-9.

Hen­dren, was the spokesman for the 16-mem­ber Tax Com­mit­tee, who first sounded the warn­ing that the pro­posed Arkansas in­come tax cut would not re­flect the dis­as­ters seen in Kansas and Ok­la­homa in re­cent years. Both states en­acted large in­come tax cuts with dis­re­gard to other state bud­gets and ran into a fund­ing free-fall, caus­ing, as in Ok­la­homa, many state parks to close or be closed with lit­tle or no warn­ing.

Hen­dren also warned of the Kansas leg­is­la­ture, in 2013, en­acted the largest tax cut in that state’s his­tory to spur job growth, but the pre­ced­ing drop in rev­enue led to dras­tic re­duc­tions in gov­ern­ment ser­vices and pro­grams, in­clud­ing a mas­sive de­cline in school and health care fund­ing.

Hen­dren, spoke in di­rect and in plain lan­guage about the work of the com­mit­tee.

“As we looked at tax pol­icy, we found there were some states that did it right and sev­eral who did it wrong … and re­ally screwed it up,” Hen­dren re­called. “Some of the states that did it wrong were Kansas and Ok­la­homa. Some of the states that did it right were In­di­ana and North Carolina,” he told Talk Busi­ness last week.

Hen­dren also said early de­bate in the up­com­ing leg­isla­tive ses­sion that con­venes on Jan. 14 will likely cen­ter around how to phase in the tax cuts over the next four years.

Maybe by then, some­one will fig­ure out the nu­mer­i­cal sig­nif­i­cance of the 2-4-5-9 plan.

And maybe, just maybe, that pru­dent per­son will tell the pub­lic.

Un­til then 2-4-5-9 hut, hut, hut, foot­ball fans. Sounds like sig­nal at the line of scrim­mage.

— May­lon Rice is a for­mer jour­nal­ist who worked for sev­eral north­west Arkansas pub­li­ca­tions. He can be reached via email at may­lon­[email protected]­ The opin­ions ex­pressed are those of the au­thor.

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