Debate continues as Arkansas lawmakers prepare to pass tax cuts during special session

LITTLE ROCK, Ark. — When Governor Sarah Huckabee Sanders called the special session, there was one item on the agenda: tax cuts. 

If passed, the state’s individual income tax rate would drop to 3.7 percent, while the corporate tax rate would fall to 4.1%. But not every lawmaker supports the plan.

Senate minority leader Greg Leding of Fayetteville said the money could be better spent on programs like childcare and rural healthcare.

“I think working families in Arkansas stand to get just like maybe a dozen dollars out of this tax cut. And I think all of them would say the state should keep that dozen dollars if it meant that we could invest in childcare, supporting rural hospitals that are closing, and providing better health outcomes overall. There’s just a lot more we could do to more meaningfully help people,” Leding said.

Supporters of the bill argue that lower taxes help Arkansas compete with other states for jobs and business growth.

“We’re competing against states that have zero income tax. So, the more that we’re able to do to bring in job creators, we should do and as we can afford it, which has been the model and what we’ve been doing again for the last 13 years,” Dismang said.

State Representative Ashley Hudson of Little Rock also voted against the bill, saying she’s concerned about cutting revenue while some state programs remain underfunded.

“I’m concerned that in doing so, we are setting ourselves up for a potential crisis later on,” Hudson said.

But State Representative David Ray said the state is in a strong financial position, with billions in reserves and years of budget surpluses.

“We have had one of the best fiscal outlooks at any point in the history of our state,” Ray said.

With the proposed tax cuts, the state is losing about $180 million, money that Hudson feels could go towards impacting communities.

“We can see what a comparatively small number, although $180 million is a large number, that’s real money, we can see what kind of impact we could have, and it’s real, and it’s tangible, and it could save lives,” Hudson said.

Ray said that the state continues to experience surpluses because the economy is growing, which brings more people into the natural state.  

“That puts our state on a solid financial footing, because it grows our tax base and it gives people, it gives us the resources that we need to invest in key areas and continue to lower those taxes further so that we continue to experience economic success,” Ray said.

One last round of votes comes on Wednesday morning. Governor Sarah Huckabee Sanders already has a signing ceremony planned for 1 p.m. on Wednesday.