Posted 3/26/2014 03:33 pm
Updated 4 months ago
NORTH LITTLE ROCK - Republican gubernatorial hopeful Curtis Coleman proposed massive cuts to Arkansas' corporate and individual income taxes on Wednesday, saying he viewed the reductions a higher priority than school funding.
Coleman said the centerpiece of his tax cut package - a proposal to eventually cut individual income tax rates by 20 percent - would cost the state more than $2.3 billion over eight years. Arkansas' budget for the coming year is about $5 billion.
"Let's make reducing the burden on Arkansas taxpayers our No. 1 objective," Coleman said at a news conference at his campaign headquarters. "Let's do that first and let's put everything in order behind that objective."
Coleman is running against former U.S. Rep. Asa Hutchinson for the GOP nomination in the May primary, but has lagged in fundraising and organization. Former U.S. Rep. Mike Ross is running against substitute teacher Lynette Bryant for the Democratic nomination.
Coleman called the tax cut plan - which also includes reductions in the state's corporate tax rates and elimination of the capital gains tax - his top priority and said it would take precedence over school funding. Arkansas is required by law to fund public schools first, and it usually receives the largest funding increases each year.
Coleman said he didn't believe the plan would require cutting school funding.
"You start with tax cuts for taxpayers, but that doesn't mean you have to cut funding for education," Coleman said. "There's no requirement that would be necessary or a presumption it would be necessary."
Coleman, however, later said he would have to rework part of his plan after realizing that by combining existing tax brackets his proposal would have resulted in tax hikes for lowest-income Arkansans.
"We're going to create another bracket at the bottom and keep it at or below where it is now," Coleman said.
Coleman's proposal is the latest in a series of tax cut plans unveiled in the race for Arkansas' top office. Ross and Hutchinson have been sparring over their competing proposals to gradually cut Arkansas' individual income taxes.
Ross' campaign declined to comment on Coleman's proposal. Hutchinson said he was still reviewing the plan.
"We've put out a realistic and concrete proposal that is very doable, that will not only provide tax relief but greater competitiveness with our surrounding states," Hutchinson said.
Coleman also proposed a cap on the growth of state government, saying the state's budget shouldn't increase any more than Arkansas' gross domestic product in a given year. He also proposed cutting the cost of state government per employed person in the state by 20 percent by 2020.