EXPENSIVE EXPANSION: Gov. Sarah Sanders mingles with Dassault Falcon Jet executives. Credit: Brian Chilson

As expected, the Arkansas Legislature will be returning to town next week for a special session, Gov. Sarah Sanders announced Tuesday afternoon, and tax cuts are once again at the top of the agenda:

Yes, the Legislature just wrapped up its fiscal session a few weeks back, but lawmakers somehow failed to pass a spending bill for a single state agency before adjourning — the Arkansas Game and Fish Commission. The state fiscal year ends June 30, and so does the money to keep Game and Fish running. (If legislators don’t pass an appropriation for the agency before then, it would stop operating, but that’s unlikely to happen.)

The main event of the special session won’t be the Game and Fish budget but tax cuts — the third such round of cuts since Sanders took office less than 18 months ago.

The Republican-dominated Legislature cut individual and corporate income taxes during last spring’s regular session. They did so again in September, as part of a special session better remembered for Sanders’ attempts to kneecap the state’s Freedom of Information Act.

But Arkansas government is currently flush with cash, and to Republicans that means keep on cutting. The state has racked up large budget surpluses recently — the result of a strong economy both here and across the U.S. (no matter what partisan spin the governor tries to put on matters) along with extraordinarily stingy budgeting from the state.

Blessed with governing during prosperous economic times, one might think Sanders would split the difference: Put some of the new revenue towards much-needed state services and some towards tax cuts. That’s not what the governor’s done. Instead, she and her allies in the Legislature have put a stranglehold on spending and services (aside from a huge increase in Sanders’ signature school voucher program) while doling out more tax cuts that mostly benefit well-off Arkansans. 

The plan for the coming special session is more of the same, as outlined in the formal call sent out by the governor’s office Tuesday evening.

Sanders proposes to cut the top individual tax rate from 4.4% down to 3.9% and the corporate rate from 4.8% to 4.3%. That’s a decrease of half a percentage point in both cases — a more ambitious cut than those passed last fall, which slashed both the individual and the corporate rates by three-tenths of a percent.

To top it off, she proposes an effective cut in property taxes by increasing the homestead tax credit from $425 to $500. That’s nice news for property owners but does nothing for the roughly one-third of the state’s population that rents. Arkansas’s tax system — which relies heavily on regressive sales taxes — has always squeezed the poor more heavily than the middle class and rich, but it is becoming more and more skewed with every passing year.

The special session begins on Monday at noon. Here’s the official announcement:

Governor Sanders Calls a Special Session of the General Assembly 

TO ALL TO WHOM THESE PRESENTS COME – GREETINGS: 

PROCLAMATION TO CALL A SPECIAL SESSION OF THE GENERAL ASSEMBLY ON JUNE 17, 2024, AT 12:00 P.M. 

WHEREAS: An extraordinary occasion has arisen making it necessary to convene the 94th General Assembly into extraordinary session;

WHEREAS: With the state’s financial stability, increased economic growth, healthy reserve accounts, and conservative spending policies, additional tax reductions can be enacted to provide further tax relief during this period of heightened inflation under “Bidenomics”; and

WHEREAS: There is a need to make an appropriation for expenses of the Arkansas Game and Fish Commission for the fiscal year ending June 30, 2025.

NOW, THEREFORE, I, SARAH HUCKABEE SANDERS, acting under the authority vested in me as Governor of the State of Arkansas, and pursuant to Article 6, Section 19 of the Arkansas Constitution, do hereby call an Extraordinary Session of the General Assembly to convene in Little Rock on June 17, 2024, at 12:00 p.m., and hereby specify that the General Assembly is convened in such Session to consider, and, if so advised, enact laws for the following purposes:

(1) To amend the individual income tax brackets and rates to a top tax rate of 3.9%, effective January 1, 2024, and following tax years; to amend the income tax brackets and rates for domestic and foreign corporations to a top tax rate of 4.3%, effective January 1, 2024, and following tax years; and to provide for a transfer of $290 million to the Arkansas Reserve Fund Set-Aside in the Restricted Reserve Fund, effective July 2, 2024;

(2) To increase the homestead tax credit from $425 to $500, effective for assessment years beginning on or after January 1, 2024;

(3) To make an appropriation for the budget of the Arkansas Game and Fish Commission for the fiscal year ending June 30, 2025;

(4) To confirm gubernatorial appointees as required by Arkansas Code § 10-2-113; and

(5) To provide for payment of expenses and per diem of the House of Representatives and the Senate for this Extraordinary Session.

This call is subject to amendment prior to the date and time at which the General Assembly shall convene.

IN TESTIMONY WHEREOF, I have hereunto set my hand and cause the Great Seal of the State of Arkansas to be affixed this 11th day of June, in the year of our Lord 2024.

Benjamin Hardy is managing editor at the Arkansas Times.