Democratic gubernatorial nominee Mike Ross warned county officials Friday about Republican gubernatorial nominee Asa Hutchinson's tax-cut plan, saying Hutchinson wants to cut income taxes by $100 million in his first year and then worry about balancing the budget and funding public education, Medicaid and public safety programs.
But Hutchinson countered that Ross has "very little credibility" when he talks about balancing a budget, noting the federal government had a balanced budget when Hutchinson left Congress and a large deficit when Ross finished serving there.
Hutchinson and Ross answered questions about county government issues before a few hundred county officials at the Association of Arkansas Counties' meeting in Little Rock before criticizing each other.
Among other things, both candidates pledged to work with county officials to try to increase the $28 daily rate that counties are paid by the state to hold state prisoners in county jails, but stopped short of committing themselves to a specific rate increase. They also said they would work with county officials on their request to increase the state's $21 million a year in turnback funds to the counties.
Ross is a former 4th District congressman, state senator and Nevada County Quorum Court member. Hutchinson is a former 3rd District congressman, federal Homeland Security undersecretary and director of the U.S. Drug Enforcement Administration.
They are vying to succeed Democratic Gov. Mike Beebe, who is barred from seeking re-election under the state's term limits amendment, in the Nov. 4 general election. Green Party nominee Joshua Drake of Hot Springs and Libertarian nominee Frank Gilbert of Tull also are running for governor.
Ross said Hutchinson "has spent too much time as a powerful lobbyist in Washington, D.C., and as a voter in Virginia.
"I don't think he understands this is not Washington. This is Arkansas. Money does not grow on trees. We don't deficit spend here, and Gov. Beebe has made sure we don't," he said.
Ross said he wants to balance the state budget; fund public education, Medicaid and public safety programs; and "then, as we have revenue growth and we always do, we are going to balance the needs of the state on things like county general turnback funds, and lower and fairer taxes for working folks."
Hutchinson replied that the federal government had a balanced budget when he left Congress in 2001 after four years of service, while it had a $1 trillion deficit when Ross left Congress in 2012 after a dozen years of service, "so there is a little bit of difference in credibility."
While Hutchinson has a $100 million plan to cut state income tax rates for the middle class in his first year in office, he said Ross has a $575 million plan to overhaul the state income tax brackets, a $40 million plan to cut the sales tax for manufacturers and a $37 million plan to expand the state's pre-kindergarten plan.
Hutchinson said he considers his $100 million tax-cut plan to be reasonable and prudent, noting that Beebe has called it prudent.
"Obviously we are going to balance the budget the first year like I did in the U.S. Congress. We are going to stimulate our economy and create growth to expand our tax base, and that solves problems in this state," he said.
Ross said Beebe didn't call Hutchinson's tax plan prudent.
Instead, Ross said Beebe said it was prudent to cut taxes for working families.
He said Beebe "read Asa's tax-cut plan and then Gov. Beebe endorsed me."
But Hutchinson said he respects Beebe "so much and I fully expected him to endorse Mike Ross.
"But he in fact did endorse Mike Ross out of the gate ... and Mike [Ross] gets his timing a little bit off there," he said.
Hutchinson said Beebe indicated that Hutchinson's tax-cut plan was a prudent plan last November, after Beebe endorsed Ross in August 2013.
Afterward, Beebe spokesman Matt DeCample said Friday that Beebe has indicated that the approach of cutting taxes incrementally was more prudent than trying to do it all at once.
During his unsuccessful 2006 campaign for governor, Hutchinson had called for swiftly eliminating the state's grocery tax, an approach Beebe had called fiscally irresponsible. Beebe wanted to slowly phase out the tax. After defeating Hutchinson, Beebe worked to gradually trim the state's sales tax on groceries from 6 percent to 1.5 percent.
Ross later told reporters that the state might have only about $40 million in net general revenue left over in fiscal 2016, after providing about $45 million for an adequate education for public school students.
He said Hutchinson's plan to cut state income taxes by $100 million in fiscal 2016 could either leave the state with a $60 million deficit or force a $60 million reduction in state services. The 2013 Legislature enacted tax cuts that already are projected to reduce state general revenue by $141.3 million in fiscal 2016, according to the state Department of Finance and Administration.
But Hutchinson said that he disagrees with "Mr. Ross' guesswork on the state budget."
"But most importantly his thinking represents the old thinking that has caused our state to lag behind in economic growth and job creation," Hutchinson said in a written statement. "He criticizes my plan for tax reduction when he has made empty promises to the voters that will cost our state over $600 million. Balancing a state budget is serious business and Mr. Ross is playing political games with our future."
Metro on 08/23/2014