HOT SPRINGS -- Gov.-elect Asa Hutchinson asked members of the Arkansas Farm Bureau on Wednesday to help him enact his plan to cut state income taxes by $100 million during the legislative session that starts Jan. 12.
"I have stood with you and supported Arkansas agriculture in protecting the exemptions to the Arkansas sales tax that are important for Arkansas agriculture, that help reduce your input costs, that helps to control your production costs," Hutchinson told several hundred people attending the state Farm Bureau's annual convention in Hot Springs. "They are important to you and, therefore, they are important to me.
"But we are now reaching a point in Arkansas that we need to look beyond more and more exemptions to our tax structure and we need to look at an across-the-board reduction of our state income tax that hurts us in our competitiveness with other states," said Hutchinson, a Republican from Rogers.
During his campaign for governor, Hutchinson said he would ask next year's Legislature to cut the state's income tax rate from 7 percent to 6 percent for people earning between $34,000 and $75,000, and from 6 percent to 5 percent for those earning between $20,400 and $34,000.
"That will help those in agriculture. It will help those in tourism. It will help those in the small businesses on Main Street from Stuttgart to Fayetteville. It will help every industry in Arkansas," Hutchinson said at the convention.
Hutchinson said he has met some of the governors in the surrounding states and that they recognize "you can attract industry, you can attract jobs, you can grow your economy and you can keep your entrepreneurs in a state that has lower regulation, fewer regulations and a reasonable tax structure."
Departing Democratic Gov. Mike Beebe and Hutchinson have disagreed about whether the budget can afford Hutchinson's proposed tax cut without jeopardizing critical state services.
Hutchinson has said his tax-cut plan would reduce state general revenue by $50 million in fiscal 2016 and $100 million in fiscal 2017. He said he proposed paying for the tax cuts "out of our growth [in state general] revenue."
Beebe -- who defeated Hutchinson in the governor's race in 2006 -- has recommended that lawmakers delay the implementation of two previously approved tax cuts projected to reduce ax revenue by $29.4 million in fiscal 2016 and $24.5 million in fiscal 2017.
Those cuts would reduce the sales tax on natural gas and electricity used by manufacturers and lower income taxes on capital gains.
Asked about Hutchinson's tax-reduction plans after his speech, state Sen. Linda Chesterfield, D-Little Rock, said she's not familiar with the proposals.
If Hutchinson works collaboratively with Republicans and Democrats in the Legislature and "does outreach, he'll get a lot of what he wants, I am sure," Chesterfield said.
The House will consist of 64 Republicans and 36 Democrats in the session starting Jan. 12, while the Senate will be made up of 23 Republicans and 11 Democrats with one vacancy.
Hutchinson, who was elected Nov. 4 and will be sworn in as governor Jan. 13, told the Farm Bureau members that the transition is "a fairly overwhelming prospect," adding that his staff has advised him that he has 240 appointments to make by Jan. 30.
Those appointments include about 60 personal staff members and about 140 members of commissions and boards, with the rest being state agency heads, he said.
Hutchinson said he's not ready to announce the next agriculture secretary, but said that Butch Calhoun, who is retiring from the post, "did a great job for the state of Arkansas."
The governor-elect said he'll "be looking to your guidance and your value judgment on who should next lead us on that, and your recommendations mean a lot to me as to the decision we make in the next secretary of agriculture."
Hutchinson later told reporters that he's asked Arkansas Natural Resource Commission Executive Director Randy Young to "stay on."
Earlier, he told the Farm Bureau audience that he's still learning the facts about the payment defaults of Turner Grain Merchandising in Brinkley and the losses to farmers that could be up to $50 million.
"I think it is a serious setback for many farmers very personally, but you've also got to look at what we did as a state to better protect our farmers and to make sure that this does not happen and have those kind of losses in the future," Hutchinson said.
The Legislature and the Farm Bureau will consider two options -- "an indemnity-type program that will cover those type of losses in the future that has to be funded" and "a set of bonding and licensing requirements for those that engage in grain commodity marketing," he said.
Hutchinson said he wants to guard against "over-regulation that will drive people out of business and prevent that service from being provided to our farmers" and that he's "looking forward to working with you as we address that problem."
Hutchinson noted that he made a surprise visit Tuesday to the state's largest youth lockup, where he met with boys and girls housed there as well as new leadership put in place after allegations of physical abuse at the facility surfaced in the summer. The lockup near Alexander is called the Arkansas Juvenile Assessment and Treatment Center.
"I do it because I follow Sam Walton's philosophy of leadership," he told the Farm Bureau audience.
"Unless you know what's happening in the stores and happening to the customers and getting the street-level information, you cannot make good decisions from top management, and so I am there," Hutchinson said.
"Secondly, you want to be able to encourage those that are doing the job every day. And thirdly we have monitors to make sure that our policies are being followed. I wanted them to know that their job is important," Hutchinson said. "That's the kind of leadership I hope to provide. We illustrated that [Tuesday] with that trip to Alexander."
A Section on 12/04/2014