Arkansas lawmakers taking up tax cuts in special session

LITTLE ROCK, Ark. (AP) — Arkansas lawmakers are meeting this week for a special session on tax cuts and school safety grants that's been spurred by the state sitting on a $1.6 billion surplus.

Leading up to the session, Democratic lawmakers have been calling for a raise in teacher salaries but face resistance from GOP leaders who say that proposal needs to wait until next year. The tax cut plan has also raised questions about whether such a reduction could jeopardize some of the state's federal COVID-19 aid.

The House and Senate are set to convene Tuesday.

TAX CUTS

The top agenda item is a tax cut package Gov. Asa Hutchinson and other Republicans are backing that would accelerate individual and corporate income tax cuts lawmakers approved last year.

The package calls for cutting the top individual rate from 5.5% to 4.9%, starting retroactively in January. It would also cut the top corporate income tax rate from 5.9% to 5.3% in January 2023.

Hutchinson, who leaves office in January due to term limits, cites inflation and the surplus as reasons for seeking the cuts now.

“We want to provide relief now that will help our families get through this tough time with high prices," Hutchinson told The Associated Press last week. “If you wait until next January for this, then you're not going to be able to provide the relief in 2022."

The package also includes a temporary $150 tax credit for individuals making up to $87,000 a year.

The tax cut push has raised questions about whether the federal government could try to recoup some of the coronavirus money Arkansas has received.

Hutchinson and GOP leaders have said they're not worried about that happening, saying the tax cuts aren't being funded by the relief money. They've also pointed to a federal judge's ruling that struck...