Governor's new tax plan has simple name

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. According to the word around the state capitol, down in Little Rock, the plan is called the 2-4-5-9. Whatever that means, we are sure 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.

Remember the respective state budget crash-and-burn scenarios in Kansas and also nearby Oklahoma -- neither state, by the way, balances its budget like the state of Arkansas is mandated by law to do.

Hendren, talking to "Talk Business and Politics" last week, said the Special Legislative Tax Committee has refined its 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 are 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 percent to 5.9 percent 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 co-chair, 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 2-4-5-9.

Hendren was the spokesman for the 16-member Tax Committee, which 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, which 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 healthcare 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 the 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.

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

Editorial on 12/05/2018