State Capitol Week in Review From Senator Terry Rice

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LITTLE
ROCK – The legislature completed the 2019 regular session after finalizing a
balanced budget of about $5.75 billion in general revenue for next fiscal year.
That is about $124 million more than will be spent during the current year.

The
state general revenue fund is mostly generated by sales taxes, individual
income taxes and corporate income taxes.

The
legislature enacted a trio of tax cuts. Act 182 will save Arkansas families
more than $97 million a year in lower personal income taxes. It will benefit
about 579,000 taxpayers with net taxable incomes greater than $38,200.

Act
808 lowers property taxes for more than 716,000 homeowners, by increasing the
homestead property tax credit from $350 to $375. Each year, Arkansas homeowners
will save an additional $12.5 million because of Act 808.

Act
822 will lower income taxes by about $57 million a year for businesses when it
is fully in effect. It lowers the top rate for income above $100,000, and it
extends to 20 years the carry forward period in which they can claim net
operating losses.

Much
of the lost state revenue will be made up from sales taxes on Internet retail
purchases. The act does not change sales tax rates, but clarifies that they
will be collected equally from online retailers as they are collected from
“bricks and mortar” stores.

The
legislature enacted long-term highway program. Act 146 will generate $59
million a year for the state and $12.6 million a year for both cities and
counties to maintain and build roads and bridges.

It
levies a new wholesale sales tax on gasoline and diesel, which will result in
an additional 3 cents a gallon on gas and 6 cents on diesel.

The
new state rate for gasoline will be 24.5 cents a gallon, and for diesel it will
be 28.5 cents. In the future, increases will be limited to 0.1 percent per
gallon.

The
bill levies additional registration fees on electric vehicles of $200 and
hybrid vehicles of $100. In 2018 there were 18,777 hybrids registered in
Arkansas, and 802 electric vehicles registered. Their owners paid $17, $25 or
$30 to register, depending on the weight of the vehicles.

Also,
$35 million a year from new casino taxes will be transferred to state highway
projects.

The
second component of the highway program will depend on Arkansas voters. The
legislature referred to the 2020 ballot whether to make permanent the current
temporary half-cent sales tax. Revenue from the half cent is allocated for
highways.

If
voters approve, the half cent will generate $293.7 million a year. Cities and
counties will each receive $44 million, and the state Transportation Department
will get the remaining $205 million each year.

If
voters reject the extension, the sales tax will expire in 2023. It was approved
in a statewide general election in 2012 by a margin of 58 percent to 42
percent.

Minimum
salaries for teachers will go up $1,000 a year in each of the next four years,
thanks to Act 170. Teachers will benefit mostly in the 168 districts that now
pay the minimum or slightly above it. In 67 school districts teachers are
already paid more than the state minimum salary.

Act
189 changes how juvenile offenders are sentenced. It’s an effort to reduce the
number of teens who are sent to secure detention facilities for minor offenses.
It also makes sentencing guidelines more uniform across the state.

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Tammy Teague

Tammy Teague

Mansfield native, with roots in Scott County. Daughter, sister, wife and Christian. Education: 1995 MHS graduate; 1999 Arkansas Tech University Graduate - BA in Journalism. Career: Managing Editor - The Citizen; Copy Writer - Southwest Times Record; 20+ years experience in the news.

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