Bill to End Income Tax Hike Passes Senate Panel, Gets House Panel OK

JANUARY 20, 2005 - Posted at 3:32 p.m. CST

LITTLE ROCK, AR - A bill to repeal the state's income tax surcharge has advanced in the Legislature, despite the concerns of a critic who said the surcharge is a fair tax that should remain in place.

The bill has cleared committees in the House and Senate.

The measure would eliminate a temporary three percent income tax surcharge the Legislature imposed in 2003 to help cover a budget shortfall and head off threatened cuts in Medicaid programs and prison operations.

Rich Huddleston, executive director of the Arkansas Advocates for Children and Families, told the legislators the surcharge could be a step toward balancing the tax system.  Huddleston says the state puts too many taxes on the poor.

The surcharge law contained language that calls for the tax to end when state revenues rise.  Legislators say they are working to ensure the law sunsets as promised.

(Copyright 2005 by The Associated Press.  All Rights Reserved.)