Week In Review

State Capitol Week in Review

            LITTLE ROCK – As lawmakers turn their focus to fiscal matters, several bills to lower state taxes made steady progress through the legislative process.

            The total amount of tax cuts that will be enacted during the 2013 legislative session is estimated to be more than $100 million a year. Some legislators are pushing for cuts of up to $150 million a year. Arkansas operates under a balanced budget law, so any reduction in taxes will mean a proportionate reduction in state government spending.

            House Bill 1039 would benefit farmers and cattle, catfish and poultry growers.  It would create an exemption from the state sales tax for utility bills and energy consumption in chicken houses, barns and other qualified structures used for agricultural purposes.  Utilities include electricity, natural gas and liquefied petroleum gas.

            The estimated tax savings for Arkansas farmers would be more than $10 million a year when it takes full effect in July of next year.

            The House passed HB 1039 by a vote of 94-to-0.  The Senate has passed SB 463 to exempt the service pay of active duty members of the military from the state income tax. It would save Arkansas members of the armed services about $7.2 million a year. National Guard and Reserve units are included in the exemption.

            Legislative leaders are negotiating with the governor on other tax cuts, including proposals to lower income taxes, capital gains taxes and sales taxes on energy use by manufacturers.

            Also, the legislature advanced several ethics and election reform bills.  Both chambers passed SB 331, which imposes the same ethical restrictions on constitutional officers, state agency heads and judges as are currently imposed on legislators.  They may not register as lobbyists for at least a year after they leave office.

            SB 331 specifically includes officials of the Public Service Commission, which regulates utility companies. 

            HB 1855 makes prosecuting attorney a non-partisan office, which is now the case with judges.  The House approved the bill and sent it to the Senate.

            Both chambers gave final approval to SB 2 and it was sent to the governor. It requires voters to present a photo ID in order to get a ballot, and it sets up a process for voters who cannot afford a driver’s license to get a photo ID from their local county clerk for free.

            The Public Retirement Committee advanced bills intended to solidify the financial stability of the Teacher Retirement System.  One was SB 123, which authorizes the Board of Trustees of the retirement system to raise the contribution rate for working teachers from 6 percent to as much as 7 percent, if necessary to preserve the financial integrity of the system.

            SB 130 authorizes the board to raise or lower the monthly stipend that retired teachers receive, if such a move is required to address a critical funding issue. It began at $50 in 1999 and is now $75.

            Still on the Retirement Committee’s agenda was SB 162, to authorize the board to raise the contribution rate of local school districts from 14 percent to 15 percent of payroll.  Under SB 162, as is true for SB 130 and SB 123, the Board’s authority to lower benefits or raise contribution rates could only be used if necessary to address a critical funding issue.

            Both chambers passed SB 332 to require school districts to contribute at least $150 a month for each participating teacher in the health insurance program.  The current minimum is $131 a month.