Revenue & Taxation- House

Yes Sir okay members is gonna be House Bill one zero zero one and this is the income tax cut and recognize yourself serving you situation with okay thank you Mr chair Jon Matix representative district twenty no I love you guys so they really need to introduce myself too much longer but I hope this one goes better than the last time I was before this committee do we kill something I forgot yes Sir yes this. I feel good about this one for you well thank you so I'll go ahead and proceed I'm going it just really hit the highlights of this because as you guys know this is probably the most that a tax cut bill that's ever been in the state of Arkansas we've all had this bill for weeks we've all read it reviewed it and we have over seventy co sponsors so again I'm gonna hit the highlights I think it's great legislation I'm excited to present it so what I want to touch on first of all and I want to be very clear about this is this is going to cut the tax burden for every single R. Kansan who works and I think that's critical to keep in mind as we go for because I have heard different things and have a few people complain about it but I do want to keep that in mind Also another thing it does I think it's very relevant as we are changing the name from the long term reserve fund to the catastrophic reserve fund and we're going to make certain that that keeps that robust balance of twenty percent of net general revenue in the balance as you all know our general revenues last last time around six billion so I'm asking this significant balance so we're gonna have for a rainy day for any economic downturn which could exist so do keep that in mind this is a fiscally prudent bill so we are doing that we are going to top off that kind of strophic reserve fund so when a touch on that another thing that I want to talk about is this is a simplification bill in my opinion we're simplifying the tax tables from three to two I've heard other people say and I completely agree that Arkansans tax code is the most complex and complicated and all of the United States and I think that's correct so we're going to fix that we're gonna work on fixing that today by simplification of the tax tables again run from three to two so that's a good thing as far as one of the exciting things about this is the rate reduction some to touch on that. In January of twenty two we go this is the top rate from five point nine to five point five and then in January twenty three we go for five point five to five point three in their additional cuts in twenty four and twenty five to five point one and then the four point nine respectively but that is based on our revenue staying at that level and not have to make any transfers out of the catastrophic reserve fund so there are triggers as we talk about for those last two tax cuts so I do want to keep that in mind as we move forward. also if we do transfer out prior to those last two then those tax cuts do not ever occur they're just gone they disappear that is something that I've had numerous questions about also we're cutting the tax rate for pass through tax entities to correspond with the highest income rate personal income rate and when you say pastor tax entities is your sub escorts these or LLCs this is the vast majority of that of the business is at least in my district I think in in the State of Arkansas so this is going to benefit them also. there is a corporate tax cut in this from five point nine to five point seven that in January of twenty three then there are further cuts in the corporate tax based on certain triggers again I know you guys have all of this new credit invented it but I do want to talk about it also some the want to touch on is there is a non refundable tax credit in this bill that is merely Dismang without the cliffs again that is non refundable this is not a refundable credit where you get money even if you don't pay and that is not this is a non refundable tax credit I believe that's good policy big distinction that I think there's been some confusion or misinformation about that as I said earlier this is a is great policy cuts income taxes for everyone who goes to work we go home for Christmas if we pass this you can tell all of your constituents and friends that you cut their taxes so I think that's going to be a good Christmas present for them NO one thing that it in all seriousness. When we make tax policy and divided on arbitrary lines and say only these people you know if you're if you're rich and you make over seventy five you make over acts you don't get the tax cut but whatever that number is it's arbitrary and it's unfair and I think it divides us so the beauty of this is it cuts everyone's tax obligations one thing that's very important and I think is that of course relying on the F. nine B. L. R. we also spent the money and hard moody's analytics they came in and gave a wonderful presentation I know all of you guys saw it I don't know if everyone else is saying it I'd recommend it and they unequivocally state that we can afford this I mean referred to jump through that extra hoop to have the catastrophic reserve fund topped topped off at twenty percent of G. R. I. think we're being very fiscally prudent in this is not slash and burn Tax Policy this is much more tax policy in my opinion modeling say like what North Carolina did as opposed to tax policy say what Kansas did was to all of our friends in Kansas that and do it right and when we learned some great lessons from them so that's what this says about infinity one from Kansas but that's what this does and. there is the corona virus food assistance towards making it very clear that that is not taxable so that if they ever change the name of that that's what that is. So that's that that's the highlights of the bill and I did not take any questions. Thank you any questions. President Garner. Yes I've got so many I don't know where to start First of all you talk about the. Lower income Parkinson's Getting. Their tax relief in it and actually the. The lower income Arkansas is already paying the highest proportion of their income because of sales tax and other things like gas tax so the tax burden is still heavily on those that can't afford it would you agree. I'm sorry that into your finished would agree no not necessarily but I would point out that we are on this is just an income tax reduction bill we're not addressing anything else I would also point out that if you look at it percentage basis and I think this is very important because kind of glad you brought that up from a percentage tax cut the lower and middle income folks are getting the largest tax cut of anyone from a percentage basis not have all those numbers if you'd like to look at the. I've got that and the top twenty percent of Arkansas earners will get about seventy three percent of the personal income tax cuts and. So that's that's how can you say that the percentages for the lower income. Well I'm saying that that that that that's a great point and I may have I think that's always the argument we hear that that that this tax cut is only for the rich which I disagree with but I think we have to remember that the rich are right even say that but some people do pay in a lot of taxes they pay and they spent tens of thousands hundreds of thousands of income taxes to the state of Arkansas of course there's a cut they're going to get more than say someone who's paying in you know five hundred dollars a year that is just the way it is and it it's your argument is good it's hard to refute but I I think what I'm saying is on a percentage basis let's say for someone in the forty thousand dollar range there percentage decreases thirteen point eight percent so it's it's a massive. Percentage decrease of what they're paying so they're getting significant relief and I would argue that I live in a well I live in the best district in the state but the. But I live in the district we have some poverty and we have some people who work hard and you know folks who make forty fifty thousand dollars a year. You know if if they can get a little a little extra money every month in your paycheck they're gonna feel it and I think they're gonna Preciado. Yeah I. All right Mr yes ma'am. When you talk about forty thousand dollars. Refines we're talking about very little money if you make a hundred thousand dollars you get basically a dollar a day back I mean you can buy a Cup of coffee at Starbucks for that so I mean it's we're not talking about a huge amount of money the lowest income earners we're talking about giving them an extra twenty nine dollars a year. in one report it was seventeen dollars a year I kept at it seventeen dollars a year so we're talking about very little money By percent. And then we're talking about It keeping and I would argue that we are a lot of our programs are not even adequate but we're not even for feeling that adequacy for a lot of our programs and then we're talking about cutting taxes minimally for most people and then taking that money away from the programs that those folks need the most. Which philosophically is just something that is very difficult for me to understand why would why we do that. Okay thank you very. So but there's a conversation about that for hours we're gonna agree to disagree our frankly but what I would say I want to point out that are catastrophic of what's going to be the catastrophic reserve fund in about one point two billion and that we're gonna keep that at a high level our Medicaid trust fund has about half a billion in a right now and our education moneys are also about half a billion set aside right now so we have money moody's moody's says that we can afford this and we're still going to grow we're going to find all of our services there's a lot of you guys know there's no bigger a public school advocate in this body then may have taken a lump sum that over the years I'm going to make certain and do all I can that that we continue to find all of our social services and frankly I think we can afford it movies things we can afford it if I didn't think we can afford I would be sitting here today. Regarding item of I'll get back in the case okay eight members also run down was policy within the table because which will start those numbers around and I do want to the correct numbers been out and and so Paul's going to start taking some is number questions written Hodges published at the interval and recognize myself and you're recognized for. Published recognize yourself please. Thank you Mr chair Paul guarantee FAA. Regional Hodges thanks to I hear you can hear us talk about this one point two billion dollars in long term reserve and and this half billion dollars. Those monies are a lot of those dollars federal dollars that that that that that that that a definite pot in that is that they they're gonna last how long the last we've always we get that money Division it wouldn't wouldn't run out. Thank you representantes wheels have Robert Breck from our budget I hate to pull and co co counsel but he certainly is a much more aware and has the information regarding the federal dollars that are component of those fund account's risen Maddox you with that Sir. Yes Sir. Robert we don't care policy they're forced. I recognize yourself for the record. Thank you Mr Robert Precht Office of State potion. President Hodges or for your question Sir. Yes thank you Mr my question is you know I I here's talk about this one point two billion dollars and a half billion dollars but at at of the end of that one point two billion how many of those dollars or from from from a federal government and I would be a realistic that the you know we're not always see a surplus of this magnitude so it is clear I mean you know I may be off base but with this move into the work you know this this this this type of reserve going to run out so could you could you talk to that point and how much of this is realistic for the Well there's little doubt that the one point two billion dollars it is the result of all federal monies that have have been floating of the State of we have looked at the tax cuts in the impact that it would have on the current the RSA and next year's are as they that's all we really have to go off of right now there's a proposed RSA that you'll take up in in February if you look at those were in good shape of this year even with the tax cuts we should have around a hundred and twenty eight million dollar surplus if you look at FY twenty three we what's that we would have about a hundred and twenty of million dollar surplus is really going to come down to you know how much spending and that's with increase in spending and so it's really gonna come down to in the future of what's yours what the spending is amended for me from a from a budget standpoint it just comes down to how much money you want to increase spending and how much you want to decrease of possible revenues and taxes but it looks like for the foreseeable future we can afford these tax cuts. Thank you you're welcome. Senator you're recognized her. So I'm going to ask a different question. My wife is disabled one hundred percent disabled. I have several constituents that are also disabled. I live in a school district that I think we're at about seventy eight percent qualify for the free lunch program. What cuts can I expect to any services to my family my constituents. But calls for giving this income tax reduction. I can only address for this year and then the proposed RSA for next year there are no cuts that are proposed. With the RSA that was approved during during the last regular session of pulmonary and but but there are increases in spending for FY twenty three and even with those increases in spending of we're looking at a it's still a surplus of a hundred twenty million dollars so obviously you could spend more if you if you didn't cut taxes I suppose but were and you were in a very good position all right now are you can cut those taxes with no decrease in in spending so do you feel absolute certain if we have a major economic downturn. That with our reserve funds in our budget forecasts that we're going to be able to meet all those needs without any interruptions for the least. Foreseeable peers. Well that'll be up to the General Assembly if if there are if there is an economic turn down turn that is significant enough the law of the long term reserve catastrophic. A reserve fund which will be renamed can certainly be tapped into to meet those needs and then that's exactly what it says set up for a if you look at the statute that allows for monies to flow out of out of the catastrophic reserve fund that is during times of economic downturns and just to make sure that essential services are met and that educational adequacy is meant. Send questions. Regarding. yes thank you Mr. I've got another question about one of the earlier metes analytics version of the bill they found that the bill would grow the economy for by less than one percent one tenth of one percent over the next decade do we have any information about this version good movies give us that information I can find it. President Garner might take a stab at if you don't care to the the committee analytics is completely outside of DFA the movie analyst got hired back to the the bill that we passed last session so it's coming strictly on the bill are and I don't I don't have any governor desk bill are to get our hands on that okay so split inferred if they are not a question perfect I'll I'll I'll get that information later and kind of on that same note if I can follow up yeah we keep hearing that was situation I guess we keep hearing that the tax cuts are going to make Arkansas more competitive and that will be able to compete with the surrounding states and new jobs and businesses are there any data to back this up. I resent Garner I do not have any data but I would say that that I I completely agree that we have to stay competitive with all of the surrounding states the end you know I've talked a lot of you individually what Texas Tennessee now Oklahoma even Missouri Louisiana we're trending all of them now we're really just trying to keep up and I do believe that individuals and businesses look at this when they're making a determination about where to locate that includes the corporate income tax and that includes the individual I mean I truly believe that and I feel that Arkansas seven major successes last couple years with what we call inbound migration I don't have that data in front of me but I have read it previously and we're having some what I would call some huge wins but I think people look at that I really do I've I've certainly spoken to some people who do and we want to be is as friendly tax climate as we can so but competition is a real thing and we've got at least try to stay close to our surrounding states thank you follow Mr yes ma'am. I guess you know when I talk to people in my district In fable where we're one of the fastest growing. Die districts in the state We're home to thousands of young professionals and many new businesses and they don't talk about taxes when they come to look at our area they talk about great schools new infrastructure vibrant culture wouldn't you agree that that is more important than lowering the taxes. I don't know if I'd agree that more important all certainly important again we're going to fund education we know adequacy in order to fund education adequately that some I think we're all proponents of infrastructure certainly were proponents of you know that the voters of Arkansas were very receptive by making the gas tax by making that permanent you know we are funding roads we're funding those things this is to keep our eye on the ball on this I'm not saying or not but this is an income tax cut and this is going to cut the taxes for hardworking Arkansans I think it's good policy. Thank you Mr welcome. Richmond clear you have a question for you we do not. It was any other questions. Resenting. Thank you Mr chairman of review the Matix of. You've been here almost as long as I have but refresh my remit memory did we not couple terms ago have a about a fifty million dollar low income tax cut. And then maybe this section if that have a a little over maybe in ninety two hundred million middle middle income tax cut. And under this governor under under this legislative body and and I see this just as a combination of continuing of the the governor's vision of with with your help so we we have not forgotten the low income to middle income we're just dealing with the issue and I think a lot of people have forgotten what we did in the past to help all phases ago of of the income would you not agree that that that kind of the road map that we have taken in this legislative body. Yes Sir that that is completely accurate that was my first time with the low income tax cut and then we did the middle last time and and yes Sir now we're we're doing more and and you're exactly right. Region Hodges. Thank you as chair even going back to the my good friend next to me Rosa Jean questions that he just ask. Okay we we did those tax cuts and I if we have the the with Paul here you know and and I like them a bank I like to the number the like to the bottom line so. In dollars and cents. We say we've helped the middle class we have the lower class. I like the. We we we talk about those tax cuts what we talk about find out in dollars sense collect the asked the question doing the session we we we have those tax cuts and it was very meniscal mental that that the dollar amount was very small for The lower class in what they would say IMINT image image that that the the the if our calls like six dollars on do you have. The number of what this tax cut what what what what they're going to stay with this tax cuts broken down by category yeah Paul if you would talking percentage based or John or written Maddox when you talk on a percentage basis and Senator Dismang this is also the synthesizer monster of Great Lakes language can you please take a seat also bill join the conversation but policy don't care somebody that in the table talk about the percentages and start at the low bracket or the top bracket the low table to work your way up that way thank you gonna think some clear what you're asking okay with that percentage is gonna is gonna lead and I might have a dollar amount. I mean the no because we will limit let Paul explained because I ask this question wait on early on in the process of us putting this package together so Paul what we're through that and see if it matches the represent questions of it don't represent Hodges will come back around to you Sir right thank you Mr chair thank representative Hodges so essentially what we have under this bill is going to create a standard income tax table and then in upper income tax table so for purposes of looking at how this these income taxes are going to affect people in those two different groups so for the those that are in the. Essentially in the standard table which would be any body that has taxable income between zero and up to the about the eighty two thousand dollar level we're talking about the the percentage of the total tax cut in this bill is approximately forty. Six percent receive the benefit of of this cut. And and separate by income range so right now if you are in between zero and twenty two nine of income tax we collect eighty seven million dollars from approximately eight hundred thousand taxpayers so of those eighty seven million dollars of people in those income ranges they're going to receive a twenty two point eight million dollars of the tax cut. So that's essentially a twenty six percent twenty six point two percent reduction for the people that are in in those ranges of the of the tax that we collect. I'm sorry did you have a question yes okay admit that that's still not answer my question so if I make twenty two thousand dollars a year. How much am I saving with this tax cut sure so we don't we don't have it on the twenty two we don't have that just that just that number out there you know you got a range from zero to eighty two thousand zero three two thousand whatever I want to know dollars cents sure what I would say so right now if if we just used twenty thousand. your current burden is four hundred thirty eight dollars your proposed tax burden would be three hundred sixty three dollars which is a reduction of seventy six dollars and seventeen point two five percent reduction on that person's tax bill if it's thirty thousand you're going from one thousand seventy two down to eight sixty five which is a reduction of two hundred seven dollars which is a nineteen point three one percent reduction in your in your tax burden on your return. Okay so. Okay thank you. Givers and I just. Okay. Member center questions. If not to represent Maddox you anything on that for start taking questions from the audience. Yes Sir okay okay members we're going to go to the audience now we're gonna go against four members of the audience please I mean is obviously you're right to be here to speak for or against the bill we're gonna stay here as long as possible but if we start chasing rabbits we start hearing the same things the list is long if we start to kind of same thing out like all ask you to speed up a little bit but first up is rich Richmond run. Which we don't care but when you get to the end table recognize yourself. I read Charleston executive secretary Arkansas advocates for children families thanks for the opportunity to come speak to the committee today I'm I do want to talk a little bit about some of the tax impact members of that we've already talked about according to the institute on taxation and economic policy or ITEP as they're often called according to them about that really is going to be the wealthy that are going to be the huge beneficiaries of this plan according their estimates the top one percent of taxpayers alone those making more than five hundred thousand dollars a year I would receive about thirty percent of the total benefits from the tax cut package of the average that tax cut for somebody in the top one percent would be about ten thousand dollars in contrast the lowest twenty percent of taxpayers those making less than twenty two thousand would that would only receive about one percent of the total benefits from the tax cut the bottom twenty percent that would receive an average tax cut of less than twenty dollars it'll it would be out more out more for some less for others depending on where you are in that zero to twenty two thousand dollar range I will say about the nonrefundable credit I'm not think represent Gardner mentioned earlier is that if you don't anything in state income taxes because your two little vote of the non refundable tax credits that is is not going to help you know we think that's the best part of the plan it just doesn't go deep enough but I think it ignores the fact that those in the bottom twenty percent taxpayers pay a lot in sales tax and so that's a five percent of their income I'm in terms of the tax burden and then the other thing I'm in terms of who benefits from the plan I think it's important to note about that one of the big winners in the plan is going to be out of state corporate shareholders because of with the corporate income tax cut the bit of the benefits ultimately get passed on to corporate shareholders coming according to ITEP they estimate that about eighty one percent of the. Benefits from the corporate tax cut are going to go out of state shareholders I am for them may estimate that to be around sixty six does this sixty sixty two million dollars a year and so and so that's money that's leave without that that in fact is leaving the at the Arkansas economy but I think for us it is the impact on the state budget that that that is the big issue I tip also estimates that they think the cost of the tax plan is going to be six hundred million dollars when it's fully phased in each year not five hundred million dollars among the reasons for that that I can discuss but that's a hundred million dollar difference and that's I mean that's a huge difference and that starts over time to make this package really really expensive I mean I think I'm not really not really is going to hurt the states ability to meet the not only the basic needs of its citizens but to make investments and things like health care education I'm an infrastructure that are really needed to help all our cans and strive and succeed I mean to really make our communities a what that what that what they need to be I mean we already do have too many of the items in the state budget that are either under funded haven't been funded at all it all just I'm not just give a really quick list of of some of those things not everyone is early care birthdates three. Very little funding there we barely made a dent over the last ten years in terms of of of of funding for pre K. in terms the ABC program we still have a disability waiver wait list we've not funded that the the positive youth development act of two thousand eleven in terms of funding for after school and summer programs juvenile justice programs there's been filed funding there for as long as I can remember we don't have enough DHS Medicaid case workers to prod to to keep up with the a backlog of about Medicaid the applications and and then the things that we should be doing that we're not doing like we currently the only offer two months of postpartum care for new mothers under the Medicaid programs everybody says that we need to offer twelve months in terms the experts and we still in recent years we've but we've seen an increase an uninsured kids a prior to the pandemic at least we don't have numbers what's happened during the pandemic but in years prior to the pandemic there was an increase of an uninsured kids in our policy steps that we can take a to to alleviate that that that that we're very concerned that this tax cut package would take away the states ability to do and finally in terms of federal funding what I would just say that the American rescue plan a lot of that funding is going to end in two or three years and then the bill back better initiative which is due to pass Congress I'm I'm in any point in time now I'm I think it's important to note that for states to fully take advantage of all the new federal money that's going to be in the build back better initiative the state is going to have to come up with a state match for many of the of the components of that initiative and so once you start talking two three four years down the line if we want to be able to take advantage of all the federal money that we're going to be the benefits of relative to other states we're going to need the state match a two out to be able to take advantage of the of that initiative and so with that That that that's been done thanks again for us for us for for allowing me the opportunity to have to come before this committee you're welcome Sir you take questions sure. Richmond first question is is is several years ago we used this body excuse I tip to help support the tax plan and but the time they do good work but when we start phone numbers after my intent to at night and I went back and I double check some of these numbers because we rely on the information we relied on movies and in that it numbers come back totally skewed from two different independent groups right so when the numbers I keep hearing it keeps it keeps it keeps getting thrown out here is anybody making about five hundred thousand dollars getting a ten thousand dollar tax cut so I ask the DFA in Paul DFA and I'm asking probably nauseum to check this number because I knew this question was coming. In the number that we're getting back from the effect is going to be a code that's actually going to be an tax books at CPA's gonna put out across the state is four thousand nine hundred W. thirteen dollars so forty nine hundred dollars is is over a hundred percent away from ten thousand dollars or we keep parent these numbers Nessa's one issue nine sit here and go through three or four issues for my tip but that's just one example so can you square with this committee that we have two different independent outside one outside group informed DFA that I tip is so skewed from their numbers that they're missing these numbers by over one hundred percent well I think I would disagree that the estimate so that we can get it for my type of recent years I'm more scared I'm if you remember a few years back I can't member that was back before the seventeen session out of seventeen session of the nineteenth session there was uh there there were up there was a big tax cut package that came out of that tax reform Commission that the governor supported and it was on a trip that came back and found that the that was definitions estimates on that initial pass of the whole law okay that that'd be corrected this is my question for a minute or not I'm not we we all know that and okay and I know you kind of affecting their but will straight up yes down the answer is do you feel like I tip numbers is huge because DFA's eventually going to put that number in the book and enters fifteen thousand tax filers pays about five hundred thousand dollars in the state of Arkansas so they're gonna that number's gonna be black and white in a book and I numbers going to come out of here pretty soon if we pass this package and I tip keep saying European I tip at ten thousand dollars I'm trying to square that because I do think I took a done good work for the state before so I'm trying I'll twenty to square that with us do you really feel I mean you you you're going to go to your grave even sing and I tip number ten thousand dollars when DFA puts is forty nine hundred dollars in the tax code book for in most spreader. At all CPA's across state of Arkansas what used to be good with that yes I'm and I will I will dress a question the though in this way and that is in that in the in this gets vote to the to the to the impact on taxpayers at the top but also to the total cost of the package when I when I and when I did the analysis may found that was going to cost six hundred million dollars more which means a higher estimate of who's going to benefit at the top they are they they were using projected twenty twenty two income let. And it's my understand the different a was using two thousand nineteen income levels well the one thing that we do know about what's happened during the pandemic is that those at the top and done really well during the pandemic in terms of the wealthy I'm in profitable corporations and so on and so you're talking about a three year gap in incomes in terms of what the projected tax cuts tax cuts more analyzed against I'm what you start talking three years I make specially for those at the top of that I mean that's a big difference and so just off the top of my head I think that's one of a possible explanation but I think I would need to need to need to get out I need to get to I would like to update up to look at this little more but I think that's a potential explanation and then the other thing I will say is that the I. tapping their micro simulation model which is one of the few in the country they out they do compute their income ranges based on total on the gross income and so on and so they're looking at it from the perspective of what a higher income tax payer makes the I'm in total and not just a taxable income and so I think that that that that that's another possible us a source for the difference but I we've we've been use ITEP estimates I go out Agut going back twenty years and we rely on them heavily and I'm have a great deal faith in their estimates thank you Sir appreciate time. I'm sorry do you want president will you have a question for rich yes if I may do you have time for the question many. Recessing you have time for a quick yes Sir. May I ask you a question I'm not in Little Rock all right I'm in Washington DC what I've been hearing from this witness is all about Washington let me ask you what how much do you folks want. How much do you all won't give me a dollar amount of what you all won't hold the tax code is six hundred million I don't care whether you're wealthy or poor and I hate to use or for this year's award lower income everybody deserves a tax cut a break from the government a break from big government billion involved but how much do you all won't. How much do you want for DHS. How much do you want for pretty cut how much do you won't for zero to three what do you want for post partum we're doing the best we can do but tell give me a number how many billions when I was a DFA the budget was a billion dollars it's almost seven billion now and I hear the same stories then the law here that you're never satisfied how much do you will tell us please tell us how much you will don't give me any all of the older number how much do you will are you give me a percent of the budget that you will we're given fifty six percent of our budget to education L. and about thirty percent of the AJS that's almost eighty percent over eighty percent so tell me how much you want us to do if you would please an excuse my voice but football coach and I'm tired of hearing the same old stories. Thank you tell me what you won't how much how much do you all work for everyone thank you thank you fiction do that Sir. Well I'm I'm I'm I cannot give you a dollar number today because we would have to go back and look at the long list of things that they have not been funded I'm are not being funded adequate knowledge we're we're happy to come before the committee at some point I mean I'm just on that engine engine. How much do you won't dollar amount that's all I'm asking for. You say everything well on the first of the first the the the first dollar amount would not be to do the six hundred million dollars tax cut so it's not so. Eighty six I'm asking you how much you will you don't know because there is no top dollar. You're never pleased you're never satisfied never thank you Mr chairman and I apologize to committee but I'm sick and tired of doing doing doing and we keep getting the same thing more more more until you the public's fed up with it thank you Mr chairman listen listen you got a question. Yes Sir. I'm following up with representative weight and I actually went and ask how many or how much we spend on income based programs the taxpayers have put into it and the list of programs for. D. D. W. S. tan a county operations medical services child care early development health education wick R. A. R. better choice school lunch program these are all income based programs and these are the programs of the taxpayer's been paying for two point seven billion was what we paid in FY twenty twenty and then in FY two thousand nineteen was two point two billion and change and they weren't done this was just the tip of the iceberg there was even more that the taxpayer's been paying for so to say that the taxpayers not been generous and doesn't deserve a break is a little bit. Disingenuous when you just when you agree well and why would they would I would say is that if we are gonna do tax cuts the tax cuts need to be focused among the folks at the bottom who relative to their income at the highest tax burden and the and the folks in the middle but they don't need to be focused on I Mark Martin oaks at the top on it into our most profitable corporations because I think that because tax because because because I do think that that we want to continue to grow grow has a state and be a beacon for economic development cutting taxes is not going to do it it's gonna depend on your digital infrastructure your roads your access to markets I'm a highly skilled we're gonna send the question you still didn't answer the question so what what's what's your question. Everybody deserves a tax cut these people are paying for everybody's paying for this. Well I and then and people that are paying taxes you to break I don't think that's too much to ask well I just told you I thought I should I should be the benefit of the biggest beneficiaries of the tax cut and you shouldn't be so I think so I think I'm just gonna disagree thank god knowledge the fact that the taxpayers have been trying and have been doing everything they can to help people that led lower income and it need assistance the taxpayers have been doing the very their damn level best to take care of those in need. Thank you. Ritualistic offer you well you doing good but excel thank you for your time all right thanks a member's run anybody's signed up to speak for the bills anybody ons will speak for the bill. K. next up is of Mr Mrs Freeman are you in the audience. Mismas frames will speak against the bill. If you folks would please recognize yourself when you situated for the committee. Charlotte have the frame. I'm Frederick Franklin. What from for city Arkansas thank the chairman of the committee for this opportunity to make of so the brief remarks. This represents who asked what we want we want thirty seven million dollars to clear out the DD waiting list that's what we want. Period end of story that's the reason we're here. Share that is a thirty year old biracial. Person adopted from Harrison Arkansas. She's a hundred percent disabled. She lives in Harrison Arkansas for three and a half years lived in little rock for six years and she's resided for city since she was six years old. We apologize. This tax cut because the state of Arkansas is not doing what he should do to find the disabled community. And other. Entities that's just that support. Persons that a disabled. She's Caliban house at an agency because she's not on the DD delicious Cajun currently being house at age eight to ban agency. That is not being paid to do so. I nonprofit entity because she's not on the DD less. At age twenty four six years ago she was number thirty five hundred on the D. list. The wait list at age thirty. She's number fifteen hundred on the DD wait list. So I guess you'll be sixty years old before its time hi to receive to be approved for the DD wait list. That's the reason against the tax cut. The tax cut if I'm not mistaken will bring in close to half a billion dollars over four years. Until the wait list is about thirty seven million dollars. That could be taken care of now. Some of you I guess I've been here two years four years the some of you have been here longer than that and you've heard this story but still we have many I. Kansans on the DD wait list. And so that's the reason we're here to speak against and never spoke against a for a bill before. But time is of the essence. John we have a lot more important issues that we need to address as relates to the quality of life our Kansans. In a tax cut. We can do this and a tax cut. And I'd encourage you to do so. Again she's number thirty five hundred several years ago she's number fifteen hundred now. And I guess at the rate we're going I'll be gone but she'll probably be sixty years of older people she gets approved for the DD weightless. Thank you for the opportunity to speak and would take any questions thank you Sir thank for testimony person Mayberry have a question now yes thank you welcome I so appreciate your testimony in bringing this up this is been a conversation we've had for far far too many years and I I do very much agree with you I will say that this administration has worked at trying to bring more funding to this list to to narrow it down we have had bills in recent years that have Taken some people off that list we have made steps. Do we need more steps taken absolutely so I want you to know that I've been asking BLR to put together some information so that we as legislators can attack this in the next legislative session and really come up with a concrete solution I have been told but it is also more than just money but even if they had all the money they don't have all the workers that they need right now it's very very difficult to find the people to service those on the DD list so it's a very complicated structure it it is actually more than just financial although obviously financial is a huge part of it. I very much understand what you're saying and I pledge to you to work as hard as I can to come up with even more solutions in the next session but this tax cut I think is not going to make a difference to that list I think there might be some other sources out there we save the Medicaid trust fund and we might be able to look at that because we did not touch of the and I'll put that last time maybe we can look at that that in some other solutions I appreciate your testimony and I don't know how to make that into a question but I just wanted to make sure that on record that. You know that I believe that there are a lot of people a lot of legislators who care greatly about your daughter and about all these others on the DD wait list and it is conversation I hear from a lot of legislators up here saying what can we do and we will work on it. Thank you various by Mister chairman yes Sir so matter representative Jett says this bodies come together to deal with this tax cut that's going to pass the bodies had ample time to deal with clearing up the wait list. Because this is been discussion for many many years. And appreciate working with you in the future on that. With the resume Mayberry Mr Freeman you guys wanna get together at the that the appropriate to do if you don't care you guys hook up at the end and the this meeting in so we can start getting some help okay thank you very much you're welcome Sir. Publisher. Okay nobody signed up for the bill we have a your doctor of Louis eleven apologize looks like a doctor roads her name on this. Please recognize yourself I'm assuming speak against the bill right yes Sir my name is Dr stared eleven I am the CEO of Arkansas support network and the president of the Arkansas waiver association Arkansas support network is a statewide home and community based provider we provide DD waiver services I appreciate the opportunity to speak to you today I especially appreciate the opportunity to follow that discussion and the discussion that we just had in the Senate committee in which Senator Rapert made a similar commitment to representative Mayberry's commitment about the waiver waiting list but I want to take some time to really help you understand that the funds that thirty seven million dollars that we talk about funding the waiver waiting list has the same error that this tax bill has and that is that it's projected based on the current funding of services and growth and at all of those factors moving forward from today what I want you to hear from me today is this state of not crisis but could pastor fee of the direct support workforce NDT services I'm I can speak specifically to that and I will share with them some numbers with you to really drive home that point but when I talk about the direct support professional workforce I'm also talking about services for folks with behavioral health needs and I'm talking about adult in aging services I'm talking about that safety net of support that allows all of us to live the highest quality of life possible and we have for decades starved this work force we've treated this work force as if it is an unskilled entry level position putting this work force in direct competition with fast food retail and all other American. Zones within a nonprofit structure that allows for competitive wages but we lock this work force into Medicaid reimbursement rates and completely undercut our ability to fund the work force so what Arkansas support network we provide services to approximately five hundred our Kansans across this state every year in their homes in their communities we currently have about eight hundred and fifty employees during that our employees are are reimbursed at low level I work I have employees that are are making on average twenty five thousand dollars to thirty two thousand dollars a year unless they're working an ungodly amount of overtime and they're working an ungodly amount of overtime. Our work force. Has conversations on a daily basis we hear from people routinely and regularly. As our historical perspective but today now more than ever we hear from people that say things like when I calculate how much money it costs means access to child care when I calculate the money that it costs me to put gas in my car to not only come to work but use my personal vehicle as a means of transportation for the person that I'm supporting when I look at insurance on my car when I look at the investment that it takes me to work I lose money to work folks cannot afford to be in this work force so when you talk about three thousand people that are waiting for services I tell you today I can't support them and I have committed twenty two years of my life to supporting them I have worked Arkansas support network since I was nineteen years old we show up every day committed to supporting people and we can't do it and it's getting worse every day on average Arkansas support network of the last ten years has maintained eighty five to ninety open positions every month we've also walked in the door about a hundred two hundred and ten applications each month to try to meet that demand we typically will not hire more than thirty four percent of those applicants for of various reasons since February we have watched our openings climb and we have watcher applications drop and in October of this year we were looking at a hundred and seventy five open positions and we walked sixty four applications through the door we are in crisis and our current level of funding I'm sorry we're in catastrophe crisis is unexpected crisis is sudden we have seen this brewing for a long time and the pandemic has put us in a place that just investing that thirty seven million dollars into that wait list is. Insufficient we're going to see our entire home and community based service system crumble out from under us without some intervention and because of those reasons I ask that we reconsider giving the wealthiest our Kansans tax cuts we need to be investing in the infrastructure of our state and I appreciate your time. Thank you ma'am. The is there miss Holdsclaw in the audience before the bill. Apologizes number if not as it used signed up to speak for the bill Haas bills going ordered apologize about that the Bill Kerr ma'am you tend to have a recognized yourself in your speaking for the bill. Thank you Mr chairman abbey Hughes Holdsclaw from Hot Spring County currently a resident of flask you County and I'm here on behalf of the Arkansas asset funders network to speak in favor of specifically the low income tax credit part of the bill. We're really honestly very glad to see that that is part of the bill and thank this legislative body for your willingness and to put it in there we believe that working Arkansas families should be included in any conversation related to tax relief we're very grateful for the governor and our legislative body that and have included this individual tax credit for low income earners in the overall bill. The credit will effectively eliminate the tax this state income tax for a hundred thousand tax filers an impact milk half a million our Kansans we believe tax credits are a straightforward way to provide meaningful relief to low income earners. Also we believe that this tax reform bill will increase individual tax credit to sixty dollars for working our Kansans making less than approximately twenty three thousand a year. Also to it tax brackets affecting families making under eighty two thousand dollars per year per year will be combined significantly lowering taxes for approximately eight hundred thousand Arkansas taxpayers who earn between twenty three thousand and eighty two thousand a year. The Arkansas asset funders network which was launched in our state in two thousand sixteen as a regional chapter of grant makers or philanthropy that invests in opportunities to help low and middle income and that individuals and their families build financial stability grow and protect their assets and gain economic mobility some of our funders that are part of this group include the Winthrop Rockefeller Foundation southern bank core which is a CDFI Arkansas community foundation the women's foundation and entered the charitable foundation thank you Mr chairman thank you members you time. All right to his or her I think is micelles. In the audience. Please recognize yourself now. Good afternoon my name is Camaro seals I am the policy director at the Arkansas public policy panel. And I live in pine bluff but we are a statewide organization. So I'm speaking against the bill. But I'm not I'm I'm coming from. A grassroots perspective. Our organization. I have members all across the state of Arkansas. Many obviously couldn't be here because they work in factories and you know teach and other things that can't be here through the day. So I've changed the way I'm going present because a I've heard everything that is come before me the numbers are working. but let let me let me see here let me share this first of all. I'm happy to hear representative that there are no. Cuts to services that are currently being serviced provide it so I'm glad to hear that that's great and I appreciate you giving the highlights that bill because that help me understand a little bit more about the bill and and really kind of how to approach this for this testimony. I want to come from an angle because I've talked to a lot of our people okay what and here's what we're concerned about we are genuinely concerned about quality of life. Taxes are essential for communities to thrive we know that right I've already heard you representative talk about the tax burden and what Arkansas has done over the years and that that we're generally trying to do though service I services I heard the other representative I'm sorry I don't know your names but you know I heard U. S. rich how much how much so I don't have a number so don't ask me how much. I don't have a number but what I want to say he is. Ninety of life. And we and we all know like I said we know what it is is taxes because our communities to thrive because that's how you fund these programs so the question is is Arkansas bribing. Some parts a thriving some people have thriving some communities are thriving but not all of the communities are thriving. Come to speak on behalf of those who are thriving and just to give it to you from a whole different perspective like I said I had a little speech rolled out but you're not here and that you know you've heard please be to so I'm just speaking from the heart at this point okay. in in soul soul we are concerned about pre K. R. there's too many Arkansas kids. Are in pre K.. Now we cut that I know the cut is like what six hundred million a year. But but. The cut and I've heard the numbers how the cut will guild people earning twenty thousand a year and other you know it's a relatively small number but every little bit so help like my grandma used to say every little bit helps so I hear you on that but what I know is that when you combine those taxes we can do more as a whole rule then we can individually. So I hear you on the tax cut. Our and it relies we don't give some some relief to families making twenty thousand and you know on on up the list okay I hear that but that's what we are concerned about is that concerted effort how much more we can do for our communities who are not thriving okay we have food and security in Arkansas and this is This XO one in five children. What in in Arkansas in twenty twenty one so obviously that group of people aren't driving okay in you heard some other areas but like I said I just want to speak with grass roots we're grassroots organization so so the that's what we're concerned about and and health care we're concerned about of children in health care education. And and like I said the pre K. because the pre K. really needs to be funded more because that's the foundation that is the foundation of learning in children we. Arkansas children with Arkansas children to compete okay every Arkansas child should be able to compete in education all in the work force aw in in technology and whatever they're doing and we have to fight like hell to keep some some of the students up because with that year verbal not bear with virtual learning. A lot of kids now a lot of our kids okay that lost out learning education virtual was good for some but not all you know that my grandson was virtual against what he lived in my house so and we made sure he got what he needed and what he did in the I got a motor who could do it you know you think I could teach a kindergartner right it's a little bit more challenging on some things but not every household can afford that okay so we're saying that's all we're saying is you know we're we're kind of tired of being the last and everything you know I wasn't about to wrap up you know what I was in this Senate house in Rio of committee earlier today how it got there too late to sign up to speak but I heard one of the represent one of the senators say we were forty ninth in law enforcement pay. I've never heard that I know we're forty ninth in a lot of the issues but that was one added to the list you know so that's all we're saying is just think about those things just you know like it's a quality of life all you've heard the gentleman talk about the disability waiver you know that was on my list but but but those are things that we really need to consider all you know when we talk about tax cuts. Thank you thank you ma'am any questions. I have agreement is good thank you ma'am. Of to speak against the bill miss Thomason unions. You sure something that's not been sure ma'am. My name is Alan Tomlinson I'm from Conway and the Director of the Arkansas line for disability advocacy I'm just gonna take just a couple of seconds of your time I want to follow up on the Arkansas labor I know you've heard so much about that but it is a very important issue I want to make sure that you have the right numbers on that we've got four thousand eight hundred people right now that are using the home community based services and so I know that you have said that we're not cutting any services on that and I know you're so tired of hearing about that I'm sure but the truth of the matter is this is disability policy because every single piece of policy or piece of legislation that comes through these doors are going to impact people with disabilities that people with disabilities are one hundred percent a part of our communities one hundred percent of the time and we need to make sure that we are looking at this like that and so right now we still have three thousand people who need services who have obviously been on that list four years I have a fifteen year old son who I need to make sure can have the services that he needs to be able to have the skills to get a job with an independent life to have quality in his life because he deserves that that's not something that's being just handed to him he is using the services and he is working he's working with those services so something is being supported you know the state is supporting him and that that that's going to help him all the years of his life I want him if he wants to grow up to be a tax paying citizen that he cannot do that if there's no new services created if this waiver list is not cleared out so we talk about education and you seem to be a great advocate for education so I was really listening to you and I want to make sure that I was learning that I would beg each and everyone of you to reach out to your constituents just right now on social. Yes and ask them to go to an IP meeting with them just ask you know annual reviews are coming up they have to have that if they have a child that's having special education services walking into that room with them and don't tell them what you do for a living don't don't run it but here them say here the teachers say I can't provide that for you here that ministration say we can't do that here we don't have the funding and if you don't know someone or you're not taken up on your offer I promise that I can set you up with an IEP meeting there in your district this is not something that we're saying doesn't need to happen to what we're saying is we are not meeting the needs of the people that we have right now people are struggling in their absolute daily life and so our Kansans with disabilities have the right to be represented by you today and so I hope that you can champion for them thank you so much thank you very much ma'am thanks for coming by. Mister Michael Fortin in room. Okay. All. Thank you very much I respectful of time we appreciate that Sir all right members that set for the signed up to speak for against present medication to close for your bill Sir. Yes Sir thank you representative I'll close my bill very briefly ops that went over and and. Pretty significant detail I think we all understand the bill like I said this is the most vetted tax cut bill that's ever been in the State of Arkansas you've all had this for weeks numerous co sponsors only thing I do want to touch on that that I didn't earlier is I know in my district and I don't I don't want to beat a dead horse on the we all know this but the number one problem I'm hearing right now is employers not mail to find employees and I bet everyone of you have those things in your district it again even in my district where we're not the wealthiest district in the state that's a huge problem what this bill is going to do is it's going to put more money in people's paychecks it's going to reward and incentivize work that's what it does and it's going to help nudge some folks back into the work force which we only so with that I'll close my bill. Members have a motion. The most representative warned any debate on the motion. All in favor say aye. Posebno. Registry pastor bill. Thank you thank you Committee. Sleduj this time was last time I. That was not easy. Thank you to all right members will switch up I'm going to run the house bill ten six in ten oh seven slide over here so we'll take ten oh six of first. Okay representative Jett when you're ready you can present bill. Ten zero six. All right thank you Mr chairman committee members this house bill ten oh six this is I think a lot of you guys recall of that during the session we did tax fairness bill. In a way it was set up Coming out of the gate we got three committee three three commissioners and they're one of their own server nine year term so the terms will be staggered so the first the the first commission we have a three year term second commissioner bill six year terms the third commission to be on a nine year term we staggered and because when I roll over the terms we don't want all three commissioners coming off at the same time. So through the complication process was I think it was like that was we did to bills to make this work thank you both bills like thirty forty pages long is highly complicated took about close to your put the thing together but only after we passed or what we decide what we saw on the bill was was the commissioners when I first get to a point to this then the language of the bill was not. In sync with the commissioners in their second term that makes sense so in other words the first what the way we hook up the commission is a first term they come off a real low the language of the bill was not in sync with the commissioners coming off the second time that makes sense so that August is requested. But there are questions committee members but one is is the simple clean up language bill. I guess you explained to splendidly yeah all accuse myself Iraq is there anyone in the audience to speak for or against the bill. Doesn't look like it. You are close review of clothes Mr. Do I have a motion. Okay we have a motion all in favor. Any opposed. Congratulations your bills passed thank you now if your shift gears all right present house bill ten zero seven yes and Mister with your permission of my crew every will bring him or both you all would come down here The mobile a smarter nine two so well it wouldn't take much there but go ahead introduce yourselves. I remember that. I will tell you that thank you Mr chairman Mike Preston secretary commerce executive director of the DC. That means it's in a Debbie Director ADC. before they get started from to this up for a little bit I think a lot of folks on number was too confused about can we talk about the project called project by name or not I know I was instructed not to do that and once again the Senate could help or sales and Senator Hickey and joint budget this morning reference the name of the project about fifteen times I'm really confused whether we need to do this or not the representative of the project but I do want to mention the the timing of the bill because there is a little bit of a. Angst I guess you'd call about the timing of the bill for my understanding these two gentleman to my left to speak more about this this here shortly but you know whenever I think we're all in tune of when there's a super project major project the the players aside that that project they won't heighten Confidentiality you know it's not it's not they don't or name stone about there because you know like a bird was sent sometimes I think they game the system and then so be it because the state games a system to try to manage projects and so with that being said that they won't they won't keeper Nikon the close of this kind of really quiet so we got the language a rough draft of the bill I think I've got it towards the end of beginning last week thank you the these days kind of run together for this of the tax cut bill the other bills you know we're trying to do this but So we get the bill and working through the process with the FAA through the process with my press in his shop and bill are trying to get a bill drafted and then the bill had to go back and forth and then we spent one day The consultant on the bill that works for the company is there was gracious enough to sit down on a conference call with Nucor Nucor focus has always been I think it was all day Thursday with new core folks and and gave those folks pretty much twelve hours to the once we get a rough draft of the bill some kind of what sent to get back with this and I think I got word back from From the core folks I think it's wrong but ten o'clock Thursday night from not mistaken that their folks were good with that so as one of the things that was trying to do dealings not to do harm to our neighbors and I think Mr president will talk briefly about the competition explains me pretty good kind of makes sense to me but so we roll into Friday had a medical emergency with my family back home did have a lot of time to do with the Friday we got it got a call I think from bill are believe it was yesterday about the bills I review. And so that the bill filed this morning so I know it's a lot of animosity I'm on the back of the animosity proctor strong word but I do know there was some issues with the Mr president shop thank you to each month for hits and I'll take all the responsibility for a not getting the bill out what some folks here timely fashion but I'll tell you all this is a multi million dollar bill and I think put the bill together in five days were sent here is pretty dang quick so just want to clear that up and with that I think I'll just let Mr Preston and mistrust Care of talk about the bill. Thank you representative appreciate your willingness to sponsor the bill and I think most everyone's probably in the committee this morning kinda get the the gist of the overview of a project blueprint and the potential impact this would have been in terms of nine hundred job project an average wage of a hundred six thousand per year significant investment in the state really what we are this came about in the way that we're doing it rather going the Amendment eighty two process was to figure out what we have in the books that we're accustomed to to build a project that would put us in the really in the driver's seat to win this project that is competitive with a couple other southeastern states so with the bill that you have been for in front of you is related to the the recycling tax credit this is legislation that's been around for many years it's been updated us several times by this body of most recently in in the twenty twenty one legislative session to expanded to into the timber industry for pellet mills specifically to this project this company it was done back in twenty fifteen again in twenty seventeen to utilize these tax credits so the language that you see in front of you is very similar to what you've seen previously just updated to reflect the other project that you have and discussing that type of investment of the three billion dollar investment the new wages and jobs that I mentioned before What it will allow this company then to do is to utilize these tax credits to offset their corporate income tax liability and they have the ability to monetize of tax credits it is right now currently structured eleven million dollars for the course of fourteen years it's capped at that amount another eleven million dollars will actually be with eight eighty percent by back to the state makes it eight point eight million hit on the state that they would be able to to then utilizes tax credits over the a fourteen year period there's some questions and The legislation about the the additional twenty seven point five number and that's to offset any additional corporate income tax liability when we do the cost benefit on the project we've assumes no liability for the company so if there is anything above that it would just be additional benefit into the state we actually in previous legislation at that is never been written in there there's not that cap so we wanted to make sure that we're protecting the state so if they were you know widely widely successful and we did actually realize a corporate income tax benefit from it we weren't boxing ourselves and to not be able to to capitalize and utilize and that so that was a provision that it was maybe a little bit different than versions that we've seen before I think that kind of explains the the overall tax credit a portion of the bill gyms are. Just real quickly as well just to remind you that we only enter into this if there's a positive cost benefit to the state so that positive cost benefit really it's it's both ADC running its econometric models but then D. FNA independent of ADC running its own model as well so both of those have to test that it will be positive benefit many will get more benefits that we're paying out before do the project so that's in there as well in terms of clawback provisions if for some reason that the project does not perform according to expectations we want the benefit of our market and so we will call back typical proportion amount the miss that's kind of with the projects that they miss on the wages or if they miss on the number of jobs we have to build to pull that money back. Just to say we we appreciate the the willingness of the body to consider this it's it's certainly a good way that we're able to do this I think the recycling tax credit is something that's allowed us to benefit in the State of Arkansas to compete on these projects we really position ourselves well in the steel industry to to be a leader you know this is you know three million tons of additional steel going into a production in the state of Arkansas ninety five million dollars in annual payroll the impact and this is significant the one largest economic development projects in the country all year I believe the largest investment of any project and history of our state so we're happy to be able to to bring it forward this day and certainly happy to entertain any questions that you might have thank you is there any questions for the committee. President Hodges. Thank you Mr I heard Jett it mentions something about talking a new core but the issue is that he was a little bit on the fact that they're not concerned about competition all that can you just kind of touch base on that doing them a to have a lot of issues with the they were very new clover that think that's all kind of. Lost in in in there okay now right yes Sir. On my **** okay we'll yes we talk Act Beyonce we probably spend a couple hours new core folks because originally right policemen couple hours on the telephone with the. For folks here in Arkansas that's Social Nucor in then we send the rough draft clubs would have the bill drafted yet but we send the the rough draft the Senate to New Jersey of ways whether or home offices Senate there of their legal department took a look at the bill they said is no conflicts with them as one of the issues that arise with this press twenty first calmly several months ago but this project couple months on the set timers together but what I was concerned about competition to you know one for you know we setting up somebody with you know compete somebody else right you know next door you know and caramelized you know what's going on but but when he told me this really makes sense was well they're gonna go someplace I think right now I think it's but Mississippi Alabama is in and out they're gonna go someplace regardless when they're they're going to get the going to set up shop regardless we would do this or not Mr will be a competition Nucor regardless where they go to so so I mean you know it it's When Nucor signed off and said Nucor was her percent good with it they might not like it you know because you're expanding have competition spending but with this is a whole different business model that Nucor Does not use and to the point without really get a new course business my understanding they built only facility here while back that's not in the state where they could you know go to to prevent somewhat as well so. So thank you question long answer to your question yes from everything I've been told of course good. All right thank you a representative Lundstrum you have a question yes I'm. Jim you had mentioned clawbacks could you talk about that just a little bit about the protections that are in there for the state. We have a negotiated agreement you know yet and I also want to get the project awarding this is a good a good first step on that but I'll tell you just in general terms or approach as I mentioned earlier we want to benefit the bargain and so they've made representations of sees to what their targets are now we hardwire those typically in the agreement and that we will have ripped regular rigorous reporting requirements both in terms of the number of jobs and the wages are actually paid and if there's a miss on that then we have a conversation about how to correct how to miss is going to be corrected and that could be sometimes I need more time it could be something that's happened like a COVID a vent for example or just could be something going on the business cycle but ultimately you know we will pull the money back to the state if there does not fill in their or their requirements for the project and we we do track that allowed to that to that this is you know in entity that has a very strong track record when this was first in into entered into an agreement when this phase one was done in twenty fourteen was five hundred twenty five jobs at an average wage of seventy five thousand per year there well up to six hundred fifty jobs now an average wage is over two hundred thousand so they've well outperformed what we had set up an original agreement I have no doubt that they will continue to do so. Following. This is very exciting I'm I'm obviously I think this is a great deal I just wanna make sure Arkansas once we get started with this and get down the aisle and get to the honeymoon we don't get disappointed later on At the is there a bonding process in that club back what so how does that work I I'm not familiar with this type of high stakes situation the original process was as though it was done through bonds through the issuance of of general obligation bonds to the state through the Amendment eighty two process not so through this because we have these programs in place and that's done in the tax credits on a yearly basis so they have to meet those objectives as well in order to get that rebate so we have protections essentially built in not only the legislation but then what Mr Hudson explain to what we'll do and the further negotiations with the company to lay out those clawbacks okay thank you. Representative do you have a question. So so. We're in competition. Hold on a second Sir so I turned my soft. Okay there we go so if I understood correctly representative Jett we're in competition with Alabama miss or other state. So this rule really put us in the hunt is what you're telling us yes Sir I mean from an Mr president speak more about this and I can but from my from what they're telling us we met with miss morning problem and are so what everything we hear that if we wish to pass legislation that I think all of these guys speak for but they tell us that the the board of directors for this company is already approved it now waiting on the CEO first pass this and we pass this so we can actually expect work back this week that the this project is coming okay is it is it fair for the yeah that's a fair statement and you know it's it's a publicly held company so you know there's a decision process of the age they have to go through and we've been working very closely with them and this is the offer that we put out on the table now we have to deliver on our end and that is taking it to the legislative body and then hopefully that is enough to get it done I'm very confident that that will but we'll we'll see what they ultimately decide but this I think this keeps us in the game and give us a good opportunity to win the project follow up follow up for money yes good so you're both satisfied that this protects the state of Arkansas I'm like representative Lundstrum out I wanna be sure and I know you all are but you're you're certifying and telling us that we're protected yes Sir that's correct okay thank you Mr chairman. Representantes Sturch you have questions yes and how many jobs would this be. Nine hundred nine hundred and the average pay hundred six thousand thank you. Let me ask also because I'm not sure missus up I do correct me six hundred jobs at hundred twenty thousand. Seven hundred jobs under twenty thousand no term jobs at sixty thousand so this is a significant a significant Income raise level no no apologize to the men takes misstep the UPS talk with the leaders of the jobs that are not real quick we don't care yes so when we do the we conductor cost benefit analysis and our our standard just the commenter modeling a when you look at a border community like Mississippi County there's a leakage that we take into account we do that that we know that some of those people that are gonna live outside the State of Arkansas analyses all live in Arkansas and and and pay a portion of the taxes here but we do take that into account but so there's some standard numbers used on that but we want to take a step further and actually look at the current roster at the facility and based on our modeling on that data to assume that so this is already accounted for any leakage that would potentially impact the project so we've included that into our cost benefit which remains positive we also took a step further and anticipating the maybe I'll pass some tax cuts this week that it was be reflective of that new tax rate as well so we've kind of trouble shot that from from all angles to make sure it was covered. Representative column did you have a question. Thank you Mr chairman thank you Mr president again for taking all the time you've taken today to answer multiple questions and I'm sorry if I missed this earlier in a discussion sometimes when you're delegate in a conversation you Mr details yet time is the cost benefit analysis that you mentioned is that going to be a public document or maybe after the fact public so that the the state agency just I guess maybe even after the fact how good of a deal it is that something that do that we hold is is confidential in fact that if we were to put out what our cost benefit you know now says was in every company consultant that we're dealing with kinda knows our secret sauce informal of what's going into it and they probably take that to stretch out whatever incentive they possibly could we're always trying to get the best you know deal that we possibly can so that cost benefit analysis is something that we hold is is proprietary I will tell you this that we do run it on a ten year model which is important I think other states will look at it a twenty or thirty or snapshot which obviously gives you more of a runway to be able to you actually realize a benefit we do it ten years. Knowing a three billion dollar investment isn't going away in ten years but essentially that's what are some shin is in our analysis that after ten years we're not looking at it but we know is a state it's going to yield additional benefit if we took it out ever fifteen twenty thirty years you know potentially allow us to you know do more as a state but we want to keep it as conservatives we possibly can. It just adds that real quickly lack audit audits are incentives every single year so the Leggatt eighteen comes in behind as they run the same models that we run to verify our work. Representative garnered you have questions section thank you Mr chair thank you guys for being here again I just have a quick question about I know that we talked a little bit this morning about I think you used in your analysis that seventy five or did you say seventy five or eighty five percent live in Arkansas seventy percent seventy five okay seventy percent live in Arkansas are those folks that are recruited from other states that moved to Arkansas or do we have the workforce in Arkansas to place our Kansans in those jobs you know I like to think that we have the workforce here there certainly the ability and I think through you know some of the the funds that we talked about this morning they'll be training available the community college of theirs done an outstanding job to stand up to the the steel academy for the state to train our our work force to be able to do it but you know. Someone will probably have to move in the state is that sheer volume of nine hundred which you know I'm happy more people moving in our state and call themselves or cans and as it is a transplant who moved here and now calls himself an our cans and I welcome more individuals moving into the state as well. Vaught Mr yes I was I'm excited as well I just wanted to know that we are doing everything we can to make sure that our Kansans are getting as many jobs of as as they can absolutely and what can we do to make that happen yes ma'am thank you. Represent Hodges did you have a question yes thank you Mr. kind of piggybacking on what the written Gardner said though that do still come here and work at the steel mill from other states they are still paying Arkansas the that's correct yes yes thank you mmhm. Represent Lundstrum did you have a question. Well that's amazing. Other any other questions. All right would you like to close for your bill representative I think I'll close all right. Is there anyone in the audience that that wants to speak for or against the bill. All right I'll take sept motion. The representative. So far as they. But the. It might be in love you. Okay we have a do pass. All in favor. That it posed. Congratulations your bill passed thank you. All right I think that does it does it the ship we're journey.