Democratic gubernatorial nominee Mike Ross and his Republican foe Asa Hutchinson Monday night clashed over their income tax-cut plans and the ramifications for the state's higher education institutions during a televised debate on the Arkansas State University campus in Jonesboro.
They also sparred about Ross' support for changing state law to bar out-of-state contributors to gubernatorial candidates and Hutchinson serving on the boards of subsidiaries of two foreign companies.
During their fourth televised debate in the governor's race, Ross twice said that Democratic Gov. Mike Beebe has warned that Hutchinson's $100 million tax-cut plan would mean severe cuts to the state's higher education institutions, including ASU, as well as nursing homes and prisons.
"That's not my word. That's coming from [an Arkansas State University] graduate, Mike Beebe," said Ross of Little Rock, a former 4th District congressman.
But Hutchinson of Rogers, a former 3rd District congressman, said that Ross "did not accurately quote Gov. Beebe."
Hutchinson said his $100 million tax-cut plan would reduce state revenue from income tax by $50 million in fiscal 2016 and $100 million in fiscal 2017 and that state general revenue would increase by an average of $200 million a year.
"This is ... doable and you can fund education, fund Arkansas State University [and] fund other institutions of higher education," Hutchinson said. "The fear tactics will not work."
Hutchinson has promised to ask the Legislature next year 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 on those earning between $20,400 and $34,000.
A week and a half ago, Beebe told the Arkansas Democrat-Gazette that he doesn't believe that the state can afford a tax cut like Hutchinson is proposing, saying it would affect essential services such as nursing homes, colleges and prisons.
Beebe, citing slow growth in state revenue, said he plans to recommend that the Legislature delay implementing $50 million in tax cuts in fiscal 2016 that it has already approved. Tax cuts enacted in 2013 are projected by the state to reduce tax revenue by about $85 million this fiscal year.
Beebe, who defeated Hutchinson to be governor in 2006, has endorsed Ross for governor.
Asked by a moderator for the debate about what specific income-tax cuts he'll propose to lawmakers in January, Ross said he wants to have lower and fairer taxes by changing the state's income-tax brackets using "the Beebe model."
Since 2007, Beebe has cut the state's sales tax on groceries from 6 percent to 1.5 percent and enacted a law to eventually cut the rest of the sales tax on groceries, Ross said.
Hutchinson said Ross has an income-tax-cut plan that ultimately would reduce state tax revenue by about $570 million a year, and he questioned when Ross would cut income taxes.
Asked whether he would support raising the state's sales tax or income tax to continue the state's private option program that uses federal funds to purchase private health insurance for low-income Arkansans, Hutchinson said he wouldn't support raising either tax.
"We do have to look at the affordability of it long term," he said. "Clearly it is helping our hospitals. But we need to look at the costs long-term."
Ross said he's not going to raise taxes, either.
"Anytime you have 200,000 more people accessing the health care system, it creates a lot of jobs. People are getting up and going to work and paying taxes and growing the economy by a lot more than the 10 percent cost that we eventually will pay for the Medicaid expansion, the private option [in 2020]," he said.
Hutchinson recalled that Ross said during their last debate that Ross would support a law prohibiting out-of-state contributions to a gubernatorial candidate, yet Ross has raised more money from out of state than any candidate in this race.
"You have raised almost $800,000 out of state from over 30 states in our union, and the Democrat-Gazette just recently reported on Sunday that you raised $70,000 from one donor in Cleveland, Tenn., that's looking for tax breaks from an agency here in Arkansas, who has declared bankruptcy," Hutchinson said. "If you don't think you should be receiving out-of-state money, I call upon you to return that money."
Ross said 90 percent of his contributions have come from hard-working Arkansans, while 10 percent of his contributions have come from out of state.
He said the Republican Governors Association has spent nearly $10 million in out-of-state funds misrepresenting his record and "even attacking my wife, a pharmacist, for selling our family pharmacy for a profit in the United States of America."
Ross said Hutchinson likes to talk about his time working as undersecretary at the federal Department of Homeland Security, but he doesn't like to talk about work as "a lobbyist working for a company that was trying to get business from the very agency he left the day before.
"But if that's not enough, he went and served on two ... foreign country boards," he said. "Not only has he voted as a congressman and worked as a lobbyist to outsource jobs, as a member of these boards, he's tried to outsource national security."
Hutchinson said that "I am just amazed, Mike, at your boldness in criticizing me for taking a job in the private sector when I leave government.
"Whenever you left Congress, you immediately went to work for a utility company being a lobbyist for them, and it allowed you to get a $700,000 home," Hutchinson said. "I am not criticizing you for that. I am just saying why are you criticizing me for the things you do day in and day out."
Ross said he had "a good job" with Southwest Power Pool, a nonprofit organization that has a charter and the Federal Energy Regulatory Commission to "restrict them from lobbying activities," and he was never a lobbyist. He's now a consultant for the Little Rock-based organization.
As for serving on the boards of subsidiaries of two foreign companies, Hutchinson said, "We have a law in our country, Mr. Ross probably supports it, which says that if a foreign company buys a U.S. security company, then you need to have U.S. citizens that are on there to protect the security interests of the United States."
Hutchinson said he also protects U.S. companies against foreign influence, and that's what he does on these boards.
"I say it is all American what I do," he said.
Ross said he was receptive to considering legislation that would change the state law requiring school districts with fewer than 350 students to consolidate to stop closing schools in rural areas.
Hutchinson said he would support legislation to change the consolidation law to allow a school "that doesn't meet the magical number of 350" to ask the state for a waiver from that threshold if it is financially sound and performing well academically.
Monday night's debate was sponsored by the Northeast Arkansas Political Animals Club, the Jonesboro Regional Chamber of Commerce, Arkansas State University, and KAIT-TV, Channel 8.
Metro on 10/21/2014