Today's Paper Latest stories Obits 10 things to do this weekend The TV Column Newsletters Wally Hall Weather Puzzles/games
story.lead_photo.caption Gov. Asa Hutchinson, meeting with reporters in his office Monday morning, proposed that the Legislature raise the annual homestead property tax credit by $25, to $375. - Photo by John Sykes Jr.

In an election-year shout-out to Arkansas homeowners, Gov. Asa Hutchinson on Monday said he'd seek to cut an additional $25 from their property tax bills.

The governor, who is running for a second four-year term, said the state can afford to raise the homestead tax credit from $350 to $375 -- at a cost of about $18 million -- because of a surplus in the state account used to pay back counties for the credit.

The idea will need approval from the Legislature, which Hutchinson said he would ask of lawmakers when they meet again in 2019, assuming he is re-elected. The regular session will start in January.

It's not the first time the idea of raising the tax credit has been put forward in an election year.

During the 2006 gubernatorial campaign, Democrat Mike Beebe proposed raising the tax credit by $50 en route to beating Hutchinson, a Republican.

Then-candidate Hutchinson questioned Beebe's timing in proposing a tax cut, and accused the Democrat of having raised taxes while serving in the state Senate.

The Arkansas Democrat-Gazette quoted Hutchinson's spokesman during the campaign as having said Beebe "thinks that he can reinvent himself as a tax-cutter just in time for the election."

As governor, Beebe fulfilled his promise and signed legislation raising the credit to its current $350 in 2007. Hutchinson, who succeeded Beebe, was elected to his first term in 2014.

The two proposals to raise the homestead tax credit come out of "two very different circumstances," Hutchinson's spokesman, J.R. Davis, said in an email Monday.

Davis said the Arkansas Association of Counties recently raised the idea of boosting the tax credit with the governor, based on the surplus of funds in an existing account used exclusively for reimbursing counties for the property taxes lost because of the credit. The governor also has a "clear" record of tax cuts, Davis said, having lowered income taxes twice in his first term.

While announcing his plan in a Monday-morning sitdown with reporters in his office, Hutchinson said the account used to reimburse counties had a surplus of $78.6 million, which he said finance officials had assured him was enough to pay for the added tax credit without otherwise affecting the state budget. The reimbursement account is replenished through a 0.5 percent sales tax.

"I wanted to make sure this gets out now," Hutchinson told reporters Monday. "Because with the legislative support that I know will be there, this is something that will provide much needed relief for our taxpayers, our property owners across Arkansas, particularly those in northern Arkansas."

Hutchinson was referring to residents in several north Arkansas counties who were hit with an $18-per-year fee to bail out the financially collapsed Ozark Mountain Solid Waste District.

About 716,000 parcels in the state receive the homestead credit, according to Chris Villines, the executive director of the Arkansas Association of Counties. State law limits people to claiming the credit on only one home.

The Association of Counties supports the proposal, Villines said in an email.

"This increase in the credit will be overwhelmingly popular among homeowners in Arkansas -- and those who administrate our property tax system, namely assessors and collectors," Villines said.

Hutchinson's discussion of the homestead tax credit brought up another link to campaigns past. During his 2014 gubernatorial campaign, it became public that Hutchinson had improperly claimed the tax credits on two different properties -- in Pulaski and Benton counties -- in four different tax years. Hutchinson paid back Pulaski County $1,750 for the improper claims, according to newspaper reports.

The primary elections are May 22 and the general election is Nov. 6.

Metro on 04/17/2018

Print Headline: Homestead tax-credit rise aired; Hutchinson proposes to reduce the levy on property by $25

Sponsor Content


You must be signed in to post comments