One of my priorities as governor has been to find ways for Arkansans to hang on to more of the money they earn.
During my first year in office, we reduced the state income tax by $100 million and last year, we reduced it by another $50 million. What that means to taxpayers is that we cut the tax rate so that the state takes less of your paycheck.
In the weeks since President Trump signed the historic Tax Cut and Jobs Act, leaders of more than 100 companies have announced plans to increase wages, pay bonuses and expand their operations.
Even Apple, well known for its off-shore operations, announced it will turn its attention and money back to the United States with an investment of $350 billion and create more than 20,000 new jobs. Apple also broke ground on a $2.6 billion data center in Nevada.
Even as Arkansans will benefit from the federal tax cut, we have found another way to turn the tax cut into a direct benefit to Arkansans by lowering your utility bills.
This is how we will accomplish that. The Arkansas Public Service Commission is the state agency that oversees utility companies that provide electricity, natural gas and water. These utility companies hold a monopoly on the service they provide. When a utility company wants to raise the price it charges its customers, it submits a rate request to the commission, which either approves it or denies it.
Part of the cost of providing electricity is the tax a company pays to the federal government. Arkansas law allows utility companies to charge rates that cover the cost of providing its service plus a rate of return on its investment.
Now that the utility companies will be paying less corporate tax, their cost to provide electricity, natural gas and water will drop.
I have asked Public Service Commissioner Ted Thomas to expedite the review and to pass this savings along to Arkansas utility customers, both residential and business.
Commissioner Thomas has assured me that he will move as quickly as possible to accomplish this.
In Arkansas, we are seeing a significant turnaround in our economy and employment. Our unemployment is close to the lowest it has ever been in the state’s history. More people are employed than ever before. Arkansas companies are expanding, and companies outside Arkansas and foreign investors are moving here. We passed a law that exempts military retirement pay from state income tax, which is keeping retired veterans here and attracting veterans from other states. When veterans use their skills in a second career or open a business in Arkansas, the state benefits.
So the news in Arkansas is good, and with this anticipated cut in your power bill, it’s getting better.