The Senate Appropriations Committee voted to effectively stop another income tax cut from automatically going into effect based on revenue growth.
Sen. Roger Thompson is the author of Senate Bill 170. He’s the chair of the Senate Appropriations Subcommittee on Finance, where the bill easily passed its first hurdle.
Legislation signed into law in 2014 contained a two-part state income tax reduction. The first lowered the state’s top income tax rate from 5.25 to five percent. The rate would have been further reduced to 4.85 percent—the trigger for that reduction would be revenue growth of about $97 million, the cost of implementing the cut. Thompson’s bill kills that trigger.
“Two years ago, we had a $600 million shortfall. Last year, it was $1.3 billion. This year, it’s $878 million. Even if we weren’t facing another shortfall, we still have tremendous financial obligations we have to meet this year. We only provided the Department of Human Services with enough money for 10 months. We still have to make up the other two months. The state’s cost for teachers’ health insurance has increased,” Thompson said.
Thompson said the feedback he’s received from constituents has been overwhelmingly in favor of his legislation.