DALLAS - With state revenues running on a flat trajectory, Arkansas governor-elect Asa Hutchinson will face a decision in January whether to delay a tax-cut measure.
Hutchinson, a Republican, won election Nov. 4 in a race against Democrat Mike Ross. Current Gov. Mike Beebe, a Democrat who defeated Hutchinson eight years ago, was term-limited.
Hutchinson, 63, is a former U.S. attorney who spent four years in Congress and served in the Bush administration as head of the Drug Enforcement Administration and later as an undersecretary of Homeland Security. He had failed to win election in three previous tries.
Hutchinson and Ross, also a former congressman, made tax cuts the heart of their campaigns.
Hutchinson proposed a $100 million income tax reduction aimed at the middle class. Ross said he wanted to cut income taxes by $575 million, but said the reductions would be made as the budget allowed.
That is the question facing Hutchinson as he assumes office in January.
In October, Beebe submitted two separate budget possibilities to the legislature. One proposal includes major tax cuts scheduled to go into effect this coming fiscal year while another delays those cuts.
Beebe said he favors delaying the tax cuts, given the flat revenue growth in the state so far this fiscal year.
Hutchinson said he would consider both proposals.
"I'm going to take a second look at it," Hutchinson said in a press conference where he announced his transition team. "Obviously, tax cuts are important to me. My highest priority is the middle class tax cut, reducing the tax rate that I talked about during the campaign."
As voters were deciding who would lead the state for the next four years, the Arkansas Department of Finance and Administration reported that revenues returned to a positive trajectory in October.
After falling $10 million below projections in September, state revenues rose 8.1% to $402.8 million in October, about $18.2 million or 4.7% above forecast, officials said.
For the fiscal year that began July 1, general revenues of $1.7 billion are $31.3 million or 1.9% above year ago levels and $11.1 million or 0.6% above projections, officials said.
Arkansas carries general obligation bond ratings of AA from Standard & Poor's and Aa1 from Moody's Investors Service, with stable outlooks.
