- Arkansas Governor Sarah Huckabee Sanders signed legislation that would lower the state’s top personal tax rate from 4.4% to 3.9% and the top corporate tax rate from 4.8% to 4.3%. Finance officials said the cuts would cost about $483 million in the first year and $322 million the following year.
- The cut is the latest in a series of income tax cuts Arkansas has enacted over the past few years. Sanders has signed three cuts into law since taking office last year.
- Lawmakers also approved legislation to maintain operations of the state’s Game and Fish Commission, which issues hunting and fishing licenses and oversees wildlife conservation.
Arkansas Gov. Sarah Huckabee Sanders signed legislation Wednesday to cut property and income taxes in the state after lawmakers concluded a special session in which they also approved keeping the state’s hunting and fishing programs open operating legislation.
Hours after the Republican-majority Legislature adjourned the session that began Monday, Sanders signed measures cutting the state’s top corporate and personal income tax rates and another measure increasing the homestead property tax credit.
The cut is the latest in a series of income tax cuts Arkansas has enacted over the past few years. Sanders, a Republican, has signed three cuts into law since taking office last year and has said she hopes to phase out the tax over time.
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“We’re moving in the right direction, and we’re doing it responsibly,” Sanders said at a news conference before signing the bill.
The measures, which will be retroactive to Jan. 1, will lower the state’s top personal tax rate from 4.4% to 3.9% and the top corporate tax rate from 4.8% to 4.3%. , cutting costs to $322.
Supporters argue the state is in a healthy position to cut spending, noting that Arkansas is expected to end the fiscal year with a $708 million surplus.
Arkansas Gov. Sarah Huckabee Sanders (front) talks about tax cuts, surrounded by state Sen. Jonathan Disman (R-Beebe) (left), House Speaker Matthew Shepard (R-Beebe) -Eldorado) (back, center) and state Sen. Steve Crowell (R-Magnolia) (right) during a news conference at the state Capitol in Little Rock, Arkansas, on June 19, 2024 superior. (Thomas Mate/Arkansas Democrat-Gazette via AP)
But opponents of the measures say the benefits are too skewed toward high-income earners and that the state should invest more in reducing maternal mortality and providing more services for people with disabilities.
“Now is not the time to underfund programs that address these problems,” Democratic Rep. Dennis Garner said before the House voted on the cuts on Tuesday.
The tax cut legislation also requires states to set aside $290 million from their surpluses as a reserve fund in case of a recession.
Another legislation Sanders signed would increase the homestead tax credit from $425 to $500, retroactive to Jan. 1.
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Lawmakers had expected to enact the tax cuts later this year, but after the Legislature adjourned last month, the plan was accelerated without a budget from the state Game and Fish Commission. That creates uncertainty about whether the agency, which issues hunting and fishing licenses and oversees wildlife protection, can continue to operate after July 1.
Sanders on Wednesday signed a compromise budget proposal for the agency that seeks to address concerns from some House members who oppose maximum pay for the agency director.
The new measures include lowering directors’ top salaries and requiring legislative approval to increase their salaries by more than 5%.
