LITTLE ROCK (AP) — A task force recommended on Monday that Arkansas cut taxes for thousands of low-income people and expand education and insurance programs for the poor as ways to reduce poverty in the state over the next decade.
The Arkansas Legislative Task Force on Reducing Poverty and Promoting Economic Opportunity issued 31 recommendations aimed at halving the state’s poverty rate in 10 years. More than one in five Arkansas residents — 527,400 — live on incomes below the federal poverty line, which is $22,000 for a family of four, according to the group’s report.
"This is not about a handout to anybody," said Sen. Joyce Elliott, D-Little Rock, the panel’s co-chairwoman. "This report is about what we can do to make people self-sustainable, what we can do about not just putting a bandage on the problem, but what we can do long-term."
Several of the proposals come with hefty price tags, and may face a tough battle in the legislative session that begins Jan. 10. Gov. Mike Beebe has said there is no room in the budget for tax cuts without hurting state services other than beyond the reduction in the grocery tax he’s proposed.
Elliott said she plans on introducing some of the recommendations as legislation during the session. She said she understands the concerns about the tight budget, but said the report was aimed at looking at all options for cutting poverty.
"They were not bound by what is the economic forecast going to be like?" Elliott said. "To do that really would have skewed putting forth what they think are the real issues . We’ll just have to take them one by one and determine in today’s economic climate what we can do."
The report calls for expanding access to early childhood education, including an expansion of pre-school education programs, a recommendation that would cost between $60 million and $100 million more annually. It also calls for implementing an expansion of the ARKids First insurance program for low-income children that was approved by the Legislature in 2009.
That expansion, which the panel says would cost $11 million, was delayed indefinitely because of past budget cuts.
The panel also called for fixing a flaw in a 2007 law designed to substantially exempt families with children at incomes below the poverty line from state income taxes. The law did not provide comparable benefits for single parents with two or more children. The tax cut proposed by the panel would cost $3.6 million, according to the report.
A similar cut proposed in last year’s session passed the House but failed before a Senate panel. Rep. Duncan Baird, R-Lowell, filed a similar proposal on Monday.
The report also recommended creating a state earned income tax credit for low and lower-middle income families, which would cost between $30 million and $32 million.
Other recommendations include:
• Closing corporate income tax loopholes by adopting a combined reporting law for state corporate income taxes, a change that would bring the state an additional $45 million to $90 million in revenue.
• Increasing funding for the Career Coaches program by $16.7 million.
• Expanding access to before- and after-school programs, a proposal that the panel says would cost $10 million.