Revenue & Tax - Senate
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Bills discussed (1)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
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SB1
Act 73
· 4 mentions in transcript, chapter, agenda
Matched: “…this afternoon and also work through this process. Members, Senate Bill 1 is a continuation of the, you know, the progress that we've…”
|
AN ACT FOR THE ARKANSAS SENATE APPROPRIATION FOR THE 2026-2027 FISCAL YEAR. | Senate Efficiency | Notification that SB1 is now Act 73 |
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- October 2, 2026
Senator Jimmy Hickey, Jr
Unverified
0:21
you know the drill if you just recognize yourself and you're recognized
Senator Jonathan Dismang
Unverified
0:29
again thank you we consistent now senator Jonathan Disanging thank you for taking the time to meet this afternoon and also work
through this process. Members of Senate Bill1 is a continuation of the you know the progress that we've already made in related relation to lowering our state's income tax rate. This process actually started all the way back in 2013
and because of what we've done through conservative budgeting and also our willingness to save we've been able to dramatically increase our income tax rate since 2013 Currently we've we've gone from7% and then this bill will take us to3.7%. the bill itself I think most of you are familiar but it's going to go retroactive so that we can utilize some of the surplus that we've already created so it'd be January1st2026 for the personal income tax and then the or the corporate income taxs won't take effect until next January
with that I'd be happy to take any questions we can talk about
Chair (Senator Jimmy Hickey, Jr)
Unverified
1:27
the impact statement if that helps any of the senator Boyd you're
Senator Justin Boyd
Unverified
1:31
recognized thank you Mr Chair. Senator Desma, could you give us an idea of how much tax savings we have had up to this point in time. I went back and
Senator Jonathan Dismang
Unverified
1:39
looked at that it's funny that you brought this up and I didn't double check my calculations but I just wanted to look at someone that was making65,000 dollars a year. What has their change been and again I wasn't planning on making this part of my presentation so sorry I didn't
mean to catch you off guard. I just was no no it was a thought I'd also had but again they can double check this at DFfa but if someone making65,000 dollars back in 2013 would've had a tax liability of3,638 dollars roughly and again there may be some adjustments you make for increases in standard deduction the credit that sort of thing but let's just say rough net taxable would be our tax rate would have been3,600 dollars. that same person today
making65,000 dollars tax rate would be just above $2000. you just again ballpark someone else can verify that math but that's I was curious about the same thing any other questions
Chair (Senator Jimmy Hickey, Jr)
Unverified
2:39
from the committee? OK, we're showing that we have some people who signed up to speak against the bill. I'm just going to go down the list if I get your name wrong, I apologize in the beginning It looks like first is reverend Haley Jones Wells first United Methodist
in LittleRock. is that correct? right whenever you sit down if you would just if you can push the red button
Senator Jimmy Hickey, Jr
Unverified
3:12
and it should stay on ok and then just recognize yourself you're just give us your name and then you're
Speaker 24
3:18
welcome to begin.'reverend Haley Jones Wells from First Sha Methodist Church downtown littlettleRock and I thank you for the opportunity to speak
Speaker 25
3:26
here today and I thank you for your service this fiscal session. I'm here as a taxpaying resident, a clergyperson in the United Methodist Church, a social work er and someone who cares deeply about the future of Arkansas. In each of these roles I am guided by a shared value that we are responsible for one another. In my faith tradition we are called to care for our neighbors to prioritize the well-being of the most vulnerable and to build communities where everyone has
the opportunity to flourish. It's from that place that I respectfully urge you to reject additional tax cuts at this time and instead prioritize critical programs that Arkansans depend on every day and I'll tell you this this is not an abstrac t issue for me as a pastor and social worker serving our downtown LittleRock unhoused and low income neighbors. I see every day how fragile stability can be and how essential state funded resources are
crisis intervention, substance abuse treatment, healthcare access and supportive services are often the difference between someone falling deeper into crisis and someone finding a path forward these programs reflect our shared commitment to care for one another and they require consistent reliable funding. I'll also tell you that it's not abstract because I see this through my own family. My husband is a second grade
teacher in the Arkansas public school system. Every day he works with students full of promise who need resources attention and support to succeed when education funding falls short, it's not just a budget issue. it shows up in crowded classrooms, limited materials and increased strain on teachers. Investing in education at its core is an investment in the dignity and future of our children like many Arkansans, I
understand the appeal of lower taxes as a family of six we feel that reality as well but we also rely on the services that those taxes make possible. Our public schools are healthcare infrastructure and public safety. These are not luxuries they are the foundation of a strong community. from a faith perspective stewardship is not simply about reducing what we give. it's
about wisely and faithfully what how we use what we have to serve the common good. Continued tax cuts reduce the revenue available to meet basic needs and invest in our future and that has real consequences for real people we must all conss also consider who benefits the most from these. ro ad tax cuts often provide the greatest benefit to those with the highest income while working families see only modest relief
yet those same families are the ones who are most affected when essential services are underfunded adjust and equitable system is one that considers both impact and responsibility right now Arkansas has critical needs that require our attention and our investment. we need to strengthen public education expand access to housing and support servicessure robust healthcare systems and provide
reliable services for our seniors or veterans and working families these are not only policy priorities they're moral ones and this is a moment to strengthen Arkansas not scale back by maintaining the revenue necessary to fully fund essential services you have the opportunity to build a state where all communities not just the most affluent can thrive
So I respectfully ask you to choose the path that reflects our shared responsibility to one another that invests in the common good and that ensures every Arkansan has the opportunity to live with dignity and stability. thank you for your time you do you want to take any questions if we
Speaker 30
7:54
we have anyone have any questions thank you for being here Miss. Wells. also
Senator Jimmy Hickey, Jr
Unverified
8:01
I'd ask everybody in the audience that was going to
Chair (Senator Jimmy Hickey, Jr)
Unverified
8:08
speak5 minutes was going to be enough and we were within that time so just as long as we stick with with that also the next one that's going to be up is going to be Missy Joyce a parent thank you
Senator Jimmy Hickey, Jr
Unverified
8:38
Miss Joyce, if you just push the button and
Speaker 37
8:45
recognize yourself and then you can begin good afternoon chair hickey members of the committee. my name is Missy Wyatt Joyce. My husband Jeb and I live in Fayetteville and we have two children that are no longer children. I was born and raised in Fort Smith. My dad was a basketball coach at what used to be Westart Community College. I went to introduce you to our oldest Hunter Joyce. Hunter was due in November of
2001, but he arrived in august. He was born 14 weeks premature and he weighed 2 pounds or yes 2 pounds3 ounces we like to say he didn't want to miss football season. he arrived home from his 10 weekks stay in the NICu Baptist at LittleRock just in time to witness Arkansas's seventime overtime victory over Ole Miss and he's been a razorback ever since. while in the NIU Hunter's team of neonatologists discovered that he had paraventricular leukomalacia which is a brain
injury that affects the white matter and the nerve pathways that carry signals to other parts of our bodies. when he was 2 years old he was diagnosed with spastic quadriplegia cerebral palsy meaning all ofhnter's limbs are affected. He uses a power wheelchair to navigate his home and his community and he is 100% physically dependent on others for every aspect of his daily life. He relies on another person to help him out of bed to
transfer to his shower chair to use the restroom to take a shower to transfer back to his bed to get dressed to eat, to drink, to use a napkin to take his meds to brush his teeth to access his modified band to drive him where he needs to go and access those places when he gets there. he relies on other people to provide maximum physical support for anything he needs to do. Hunter wanted to be here today to tell you his own story.
However, he is a law school final tomorrow. in Will's trusts and estates and one on Thursday in employment discrimination although he is absolutely physically dependent on others. Hunter graduated from the University of Arkansas Phi Beta Kappa with a degree in political science and a minor in history in 2024. He was accepted to law school and is wrapping up his two well year this week with with this last two finals and he's on track to graduate in May.
Hunter's disability though significant, has not prevented him from leaving his best life and achieving achieving some remarkable outcomes at the same time Hunter as determined and resolute as he is would not be able to achieve these outcomes or live his best life. without the constant physical supports he needs that are provided through homeme and communitybased services and most importantly supported living. henter cannot live
the life he is choosing in a residential or institutional setting but for years we as a state have starved supported living to the point that the 2025 rate study shows that is 23% underfunded 23% Hunter throughout undergrad and law school has endured constant turnover and chaos in his support staff because it is impossible to maintain stability at the current reimbursement rates. He
has never haddSPs that have not worked overtime which only deepens the deficit of his nonprofit provider because passes will not reimburse for over he has supported living nonprofit provider operated in an $8 million deficit in 2025. $8 million deficit. it is simply not sustainable It is time to fund supported living services for all the hunters
and I hope you will choose to do so before you choose to cut any more taxes. the hunters need it far more than the individuals trust states and corporations your tax cutting tax cuts are targeting thank you so much for your time thank you M Joyce. any questions we appreciate you being here
Senator Jimmy Hickey, Jr
Unverified
13:25
OK, the next is going to be Anna er che t te Did I say that correctly? Close you're with the Arkansas appleseed Same way just
Ana Morshetti
Unverified
13:45
push the button and you can begin. 5 minutes thank you so much. good afternoon my name is naorchetti and I'm a policy director for Arkansas Appleseed Legal Justice Center
we're a nonprofit advocacy organization that works hard for strong schools and good government and thank you so much for giving me the time to speak today. Our organization's mission is to make Arkansas a better place to live and work and that's a broad mission and that's intentionally so because we know that the progress needed in Arkansas is broad. from health outcomes to learning outcomes to life expectancy to quality of life. Arkansas is at the bottom of some lists that none of us want to be at the bottom of
we do our work because we believe that good state government, the work done in this building by you the elected stewards of the people's money is one of the best tools we have for climbing to the top of those lists. we believe nobody but the Arkansas state government has the resources necessary for keeping failing hospitals from closing we believe nobody but the Arkansas state government has the resources necessary for fully funding our state's public schools
Nobody but the Arkansas state government has the resources necessary for ensuring that every child in Arkansas can access quality early childhood education and pre-K. and nobody but the Arkansas state government can rebuild roads and bridges, expand broadband access or grow our state's healthcare infrastructure. that's why we're asking you to vote no on this new set of tax cutsiven our state's condition and the investments required to improve
outcomes here we simply can't afford to cut spending we we recently released a report that found in order for Arkansas's public education spending to match the national average. we'd need to increase our per student spending by30%. We spend4,000 dollars less per student than the national average. we spend 1500 less per student than Alabama 2000 less per
student than Louisiana.3,000 less per student than Missouri and4,000 less per student than South Carolina in order to merely catch up to our ppeer states and public education spending we need to be spending at minimum 674 million more each year. Now I'm certainly not here to ask you to write a check for that today. we're here to ask you to consider whether we can afford a $180 million tax cut while our regional peer states
are pulling out ahead of us in both public education and public education outcomes. 3000 Arkansas children currently sit on the waitlist for quality early childhood education in Arkansas we could clear that waitlist today with an investment of roughly 15 million universal access to quality pre-k would cost the state roughly300 million. Again we are certainly not asking you to write a check for that today we're here to ask you to consider whether we can
afford a $180 million tax cut with a backlog of families who need access to quality early learning Last week the legislature approved an education budget that features roughly380 million dollars in spending for private school vouchers Available data indicates that 80% of that spending or300 million will go to families whose children were already enrolled in private schools prior to their receiving a voucher our state's private school
voucher spending now makes up6% of our state's budget and some lawmakers have indicated their intention to continue growing theation freedomccount programme we're here to ask you to consider whether we can afford a $180 million tax cut given the stated intention to grow the EFA expenditures year to year. Over the last decade this body has cut the state's income tax no worries. Over the last decade
this body has cut the state's income tax rate by roughly40% to historic lows We like low taxes just like anybody else but we're asking you to vote no on yet another tax cut. we shouldn't be competing with neighboring states for the lowest tax rate. we should be competing with neighboring states for the best learning, health and life outcomes in the south and winning those far more important contests is going to require investments we can't afford if Arkansas keeps cutting revenue.
Senator Jimmy Hickey, Jr
Unverified
18:38
thank you for your time. thank you Msorchette. All right, anyone have any
Chair (Senator Jimmy Hickey, Jr)
Unverified
18:44
questions seeing none we appreciate your comments thank you ma'am next is Pete Gu Arkansas advocates for children and families recogn if you'll just introduce
Senator Jimmy Hickey, Jr
Unverified
19:06
yourself and you'll be recognized thank you Peter
Speaker 55
19:11
Pete guss I am the economic policy director at Arkansas advocates for Children and Families. Good afternoon Chairman hickey and members of the committee. thank you very much for this opportunity to speak against SB1. there are several reasons that individual and corporate income tax cuts should not be reduced at this time sorry cuts should not be made at this time. We are experiencing a perfect storm of economic pressure on the state budget. Inflation
stands at3.3%, making it more expensive for the state to do business the percent of jobless Arkansans is growing currently above the national average the federal government is placing new demands on state budgets notably in the food assistance and healthcare sectors as you know well, Arkansas will have to spend an additional 18 million to run the supplemental nutrition assistance program in the coming year an amount that could reach 80 million a year in
very soon President Trump has also said he expects states to spend more state dollars in such policy arenas as housing disaster recovery and early childhood education. Further, some of our state policy decisions are expensive based on the growth and applicationsucation freedom accounts may top400 million this coming year. the pay plan that you passed last year will continue to require investments
Additionally, we know ourkansans have pressing needs. I know you are worried that some of our rural and not so rural hospitals are closing or shedding important apartments Many more are unable to balance their budgets Federal decisions will only exacerbate the pressure on hospitals and the rural hospitals transformation fund only makes up5% of the expected Medicaid cuts nationwide as you just heard from our friends at
Arkansas Appleseed the state is funding our K-12 education at per pupil levels that is4,000 below the national average and we trail our southern peers as well Arkansas the childcare crisis is causing the state of Arkansas nearly 800 million a year and lost earnings, productivity and revenue. I've heard many of our own our lawmakers expressed concerns about how we are caring for seniors especially as programs that feed the elderly lose the federal grants that have sustained these programs
Families feel more strained as housing transportation and food become less affordable. I'm sure you have heard from your constituents about these and other needs more than half a millionskansas households either cannot cover basic needs or fully live in poverty and as those very arkansans who will not see a substantial benefit from the tax cut as thedF andA fiscal notes indicates more than 20% of earners in Arkansas will see zero benefit. Those that make between74 and 99,000 will only receive a77
dollars tax benefit less than a quarter a day. These amounts will not help families struggling to afford groceries or gas in fact the eighty20 rule applies here. The top 20% of earners will receive 80% of the tax benefit I'll add that state spending is not out of control in fiscal year 2025 Arkansas ranked31st of50 states in expenditures per person Subtracting federal dollars Arkansas ranks 27th. We are below the national median in state government expenditures
if you ask our Kansans if they want a tax cut of course they will say yes after all who doesn't? but when you make the link between taxes and governmental services answers change. We just completed a statewide scientific poll of registered Arkansas voters in partnership with Change Research.63% of voters prefer to maintain the current income tax rates in order to invest in programs and services and what did they say they want? Better healthcare, better K through 12 education reducing childhood hunger and reducing poverty.
this priority list is the same across political affiliation and income levels Income tax contributes nearly50% of our general revenue but it also enhances both empowerment and freedom for the people of Arkansas before we had a federal income tax, many of our senior citizens worked until death. Socialcurity changed that freeing our older citizens to participate in civic and social life strengthening our communities at the state level, income tax provides for schools. It is difficult to come up with a better example of a
public good that empowers our young people to live fulfilling lives. there is a long list of the ways state government positively affects the lives of residents such as public health, public safety, good roads and services for our youngest and oldest community members. There is also a list of important needs. I ask that you like your constituents prioritize investments in public service over income tax cuts thank you happyppy to take questions. thank you Mr. Any anyone have any questions we appreciate you being here you
Chair (Senator Jimmy Hickey, Jr)
Unverified
24:24
the last one is I'm going to get the first name Micchelee. you're going to tell me how to do
Speaker 45
24:32
the last name Pedro OK you're with Arkansas coalition for Marshalle correct just push
Senator Jimmy Hickey, Jr
Unverified
24:44
the red button and you'll be recognized you can begin
Speaker 58
24:57
thank you for your time My name is Micchelee Pedro and I'm a resident of Springdalee, Arkansas I work for the nonprofit Arkansas coalition of Marshalise and I'm here today to tell you about me. I'm a single mother but I'm also here to talk about I'm also here as a witness to the quiet desperate struggles happening
to the quiet desperate struggles happening in our neighborhoods every single day. I want to be clear about who I am. I'm a mother first even though I am a single mother I'm a hardworking mother. I didn't choose to be single. it was out of my hands even though I'm struggling and I'm a hardworking mom. I am doing ok for now.
I work hard to provide for my children. yet I know the sinking feeling of looking at a grocery receipt and realizing it costs twice as much to buy half as much. I know what it's like to have to choose which utility bills that gets paid so that my children get to eat. but my testimony isn't about my own kitchen table.
my life is spent helping families who are in positions far more dire than my own. and that's the marshallese community in NWA and all around Arkansas I help a lot of elderly people I help people like you and me it's just who I am in my community, I sit with grandfathers and grandmothers
who can't afford a simple doctor's visit or I talk to people who are literally getting sicker because navigating the red tape isn't as simple as it used to be or as it sings. right now nearly 1 in3 Arkansans don't know where the next meal is coming from. our s state currently holds the heartbreaking title of having the highest
food insecurity rate in the country. these are not statistics these are our people I understand the appeal of tax cuts everyone wants more dollars in their pocket. but a tax cut of a few dollars in a month does nothing for the family that just lost their medicaid coverage. it doesn't help the senior
citizens who is homebound and hungry because our community programs are underfunded when we prioritize further tax cuts over funding are essential services we are choosing a temporary superficial benefit over the survival of our most vulnerable citizens we are essentially telling the sick and the elderly that their health and dignity are less important.
that their dignity and their health are less important than a line item in a budget. Please don't look at these services or these programs as handouts. but please look at them as essential services investments when we invest in healthcare and food security we know we are investing in the workforce that is healthy enough to work and take care of their families. take care of their children so that they can go to school
and not worry about being hungry Please don't cut out the lifeline that so many Arkansas are clinging to. Please prioritize the funding of our healthcare services, our healthcare systems and food assistance programs let's make Arkansas a state known not for its hunger s before how fiercely we look
after our own and one another thank you for your time
Senator Jimmy Hickey, Jr
Unverified
29:45
any questions we appreciate you coming and speaking. thank you ma'am. OK, that's all I had on the list. Anybo
Chair (Senator Jimmy Hickey, Jr)
Unverified
29:54
else in the audience want to come forward to speak for or against seeing none in dismay do you want to close for your bill? Yes, thank
Senator Jonathan Dismang
Unverified
30:02
you Mr Chairman. members just a couple of things I wanna talk about quickly that was a45% decrease in the effective tax rate for someone making65,000 dollars so
45 % decrease and again DFA can double check those numbers but I think it's going to be in ballpark. One thing I want to say and I appreciate the testimony that we just had. there are a couple of things that I just don't want to go unsaid Number one we are committed to public education in the state of Arkansas you see that by the increases that we routinely have in public education or per pupil funding we are dedicated to make sure that making sure that we properly pay our state employees by a complete revamping of the pa pay system here in the state
we are committed to fighting food insecurity you've seen it repeatedly in the last few sessions and what I would like to say is is it is quite possible to be both compassionate and competitive but I think we need to be both. We can't be just one or the other there is no cut in services based on this tax cut in fact we're operating with a surplus right now and what this is projected to do is absorb some of that surplus that we're operating with again no essential services are being cut
by what we're doing here today but again I I appreciate the testimony. I think it's helpful we do need to set our priorities in the state and I think voices need to be heard as we do that but this is not that members with that I'd appreciate
Speaker 10
31:26
a good vote and thank you for your time this afternoon. Hey do we have any do we have a motion right
Chair (Senator Jimmy Hickey, Jr)
Unverified
31:33
after this Senator Dis made the motion. Senator Petty is the second. do we have a discussion on the motion? Senator Petty you recognized
Senator Jim Petty
Unverified
31:44
So I'm glad you you you said some
of the things that I wanted to to to bring out. I too and I think every member of the committee here seiz your passion seizure desire and and I'm glad to hear Senator Dismain bring up that there are no services being cut. there is the need is great there's no doubt but that need is and has always been met first and foremost
the clergy. I think it's, I think it's incumbent upon us as individuals as as Christians that we give and we give freely and and and so I think locally as an individual we we we need that to meet these needs I think we also see that at the local level the local government and a lot of what we talk about is generated locally some of the tax are significant portion of the taxes that are used to fund public education
is originates in in the real estate taxes locally and then of course the state has a role but a lot of these services that we've talked about today are in funded in in great part by federal programs not what we're talking about here and so I think the senator just means point we've got to find that balance where we can grow. We've cut taxes every year for a number of years and and well not every
year but we've cut taxes regularly and yet we continue to generate more revenue so the base grows and so finding that balance between funding essential services at the level that needs to be and then also creating an environment that allows us to be competitive I think is what we try to do. I think there's not a single person here in the legislature legislature that that doesn't care that that that doesn't care for what the things that you talked about today it's
up to us to find that balance and that's what we're trying to do here in keeping that competitive environment and so from the bottom of my heart I thank you for what you do and want to encourage you to continue to do so and and thank you for for sharing today any
Speaker 64
34:06
other questions or discussion on the motion Senator Di just
Senator Jonathan Dismang
Unverified
34:09
one thing I should have said earlier you know mean I mentioned that we started this in 2013. It was the priority of this legislative body even more so than the administration at the time that
we prioritized lowering the rates for the lower income tables for Arkansas and and so that's what we did and so again this is a continuation it's a multiyear thing that we've done but we prioritize the lower income tables first and then we came back with that in simplification was also important which impacted the lower tablesargasal just something we need to point out in a bigger context it's sometimes you forget that this is something we've been doing for over a decade at this point and focusing on the individual income tax rate
Senator Justin Boyd
Unverified
34:52
Senator Boyd you're recognized thank you. I'll be brief. Just there will discussion from a couple of the people and I hope we'll keep this in mind as we vote that hey our funding we're we're not funding public schools to the same level. Personally that's not what I'm worried about. I'm worried about outcomes right? Can our kids read and write? And I think we've done a lot of other things to help make us competitive on that front. Thank you.
Senator Jim Petty
Unverified
35:15
anybody else Senator Petty just and again I'll be brief. I think to Senator Dimain's point
with the focus on the lower income brackets the lower income tax individuals I think that's why where we're at today you you're seeing some of the opposition being because it's benefiting the the higher income individuals. I mean the reality is there's there's a significant amount of tax that is paid now only by the higher income individuals. I think it breaks off around $25 or30,000 dollars
in taxable income so I think that's a good point and and the focus on the the lesser income earning individuals has has played out and that's why we're at today where the higher income individuals are benefiting but again no cuts in the services it's any other discussion the motion before
Chair (Senator Jimmy Hickey, Jr)
Unverified
36:17
us is due pass on Senate Bill1. all in favor say aye. any opposed it's passed congratulations
Unknown speaker
36:26
senator. Is there any other business to come before us with that we're adjourned
Agenda
CALL TO ORDER - Sen. Jimmy HIckey
SB1 J. Dismang TO REDUCE THE INCOME TAX RATES FOR INDIVIDUALS, TRUSTS, ESTATES, AND CORPORATIONS.
ADJOURNMENT
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — REVENUE & TAX - SENATE, May 4, 2026 | Agenda | 1 | Official source ↗ |
Speakers
Senator Jimmy Hickey, Jr
Unverified
Senator Jonathan Dismang
Unverified
Chair (Senator Jimmy Hickey, Jr)
Unverified
Senator Justin Boyd
Unverified
Speaker 24
Speaker 25
Speaker 30
Speaker 37
Ana Morshetti
Unverified
Speaker 55
Speaker 45
Speaker 58
Speaker 10
Senator Jim Petty
Unverified
Speaker 64