Hester: No tax cuts before June; state employee pay, crypto mining likely fiscal session items

Senate President Bart Hester, R-Cave Springs, is ready for next week’s fiscal session, but he warns that tax cuts are unlikely until after the fiscal year closes in June. Hester also said two non-fiscal items are likely to be explored this session: the state employee pay plan and changes to crypto mining policy.

Appearing on this week’s edition of Talk Business & Politics and Capitol View, Hester said he expects income tax cuts to continue, but not during the fiscal session that starts Wednesday. The state is tracking for a much smaller budget surplus – $78 million – than in previous years, but the Senate leader said there’s a good reason for that.

“We’re not worried about leaving a margin for error because we have so much in reserves and we’re having less surplus by design, right? We continue to cut taxes on the people of Arkansas. If we continue to have $400 or $500 million in surplus or billions as we’ve had, it means we’re taxing people too much. So it’s by design that it’s less now. We hope the economy continues to roar and that continues to rise and and we can cut taxes more. But that number is why we don’t have another tax cut on for the fiscal session anyway,” he said.

“I think we’re going to look at the end of June. We’re going to see where we end up at the end of the [fiscal] year. Do we end up with a $78 million surplus or $378 million?” Hester added.

While lawmakers and Gov. Sarah Sanders negotiate over $6 billion in state spending priorities in the fiscal session, Hester thinks there are two issues that may arise as non-fiscal items to explore. Changes to policy to realign the state employee pay plan have been discussed for months. Also, many lawmakers want a change to further regulate the crypto mining operations that have become a noise nuisance in parts of rural Arkansas.

“I think we’re going to have two topics. One is going to be the pay plan. I think that’s probably going to receive almost unanimous consent from the House and Senate. We know that we’re going to make some adjustment for the hardworking people that work for the state of Arkansas and serve the people of Arkansas. We’ve got to do better and we will do better,” Hester said.

“Number two, I think there’s going to be something on crypto. Can I tell you what that is yet? Not exactly, but I do know that enough of our members and constituents in Arkansas are suffering from some of these crypto mining facilities that are loud,” he added. “I suspect the legislature will take it up. We haven’t narrowed down to exactly what that’s going to be yet,” he added.

Beyond the fiscal session, chatter will begin for the regular session next January. While legislators and the governor spent much of last session education and prison reform, Hester predicts there will be a sharper focus on Medicaid spending in 2025.

“We’re going to start looking at Medicaid pretty hard. We’re going to have some reports coming out. We’re going to start diving into that now. Does that lead us somewhere for 2025? Maybe, probably, I would say likely, but I appreciate about this governor and this administration. They’re taking on one challenge at a time. We’ve had some really good reforms in K-12, we helped with the Protect Act in our safety. I suspect Medicaid is on the short list,” he said.

Watch Hester’s full interview in the video below.


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