The Arkansas House and Senate on Thursday adjourned a four-day special session after the Arkansas House of Representatives voted to pass bills that would trim the state's income taxes and would exempt records related to the governor's security from the Arkansas Freedom of Information Act, sending the bills to Gov. Sarah Huckabee Sanders for her signature.
Shortly after adjournment, Sanders signed the bills into law and said lawmakers achieved all the goals in her call for the session.
“We said we’d do it, and we got it done,” she said during a news conference.
Senate President Pro Tempore Bart Hester, who sponsored legislation to change the Freedom of Information Act, thanked members of the public for their input during the session.
“From text, email, phone calls, our constituents that have reached out to us with good feedback, I think this has been a very successful week for the Democratic process,” said Hester, a Republican from Cave Springs.
The House voted 82-15 to approve Senate Bill 10, a scaled down version of previous bill that would have overhauled Arkansas' sunshine law, and House Bill 1012. The measures would exempt documents related to the governor's Arkansas State Police detail and "records that reflect the planning or provision of security services provided" to constitutional officers and judges, and would be retroactive to June 1, 2022.
A sponsor of the bills, Rep. David Ray, R-Maumelle, said Sanders' unique notoriety has meant the Republican governor been exposed to unusual amount of death threats.
"If you follow politics in America, everyone knows who Sarah Huckabee Sanders is," Ray said.
Rep. Andrew Collins, D-Little Rock, spoke against the legislation, saying it wasn't tailored narrowly enough.
"This bill has been presented as the security-only bill, and if it were just a security-only bill I would happily support," Collins said.
The House voted to approve identical bills that would trim the state’s top individual and corporate income tax rates and create a temporary income tax credit for low-income and middle-income taxpayers. The bills are House Bill 1007 by Rep. Les Eaves, R-Searcy, and Senate Bill 8 by Sen. Jonathan Dismang, R-Searcy.
HB1007 and SB8 would trim the state’s top individual income tax rate from 4.7% to 4.4% and the state’s top corporate income tax rate from 5.1% to 4.8%, effective Jan. 1, 2024.
For tax years starting on or after Jan. 1, 2024, the 4.4% individual income tax rate would include Arkansans reporting more than $87,000 in net income and apply to their income of $8,801 and above under the bills. That top rate also would include Arkansans reporting net income up to $87,000 and apply to their income between $24,300 to $87,000 for tax years starting on or after Jan. 1, 2024.
The top corporate income tax rate of 4.8% would apply to net income of corporations exceeding $11,000 for tax years starting on or after Jan. 1, 2024, under the measures.
The identical bills would create a temporary nonrefundable income tax credit of $150 for individual taxpayers in Arkansas with net income up to $89,600 and a temporary $300 nonrefundable income tax credit for married couples filing jointly with net income up to $179,200, retroactive to Jan. 1, 2023. The income tax credit would phase out for individual taxpayers with net income up to $103,600 and married taxpayers filing jointly with net income up to $207,200, under the bills.
About 1.1 million individual income taxpayers would receive a tax reduction and about 7,500 corporations with a net taxable income greater than $11,000 would receive a tax cut under SB8, according to the state Department of Finance and Administration.
The state finance department projected that SB8 would reduce state general revenues by a total of $248.5 million in fiscal year 2024 that started July 1 and ends June 30,2024 — including $156.3 million for the “inflationary relief income tax credit” — and $184.5 million in fiscal 2025 that starts July 1, 2024, and ends June 30, 2025.
Cutting the state’s top individual income tax rate from 4.7% to 4.4%, effective Jan. 1, 2024, is projected by the finance department to reduce state general revenues by $75 million in fiscal 2024 and $150 million in fiscal 2025, and trimming the state’s top corporate income tax rate from 5.1% to 4.8%, effective Jan. 1, 2024, is projected to reduce state general revenues by $17.2 million in fiscal 2024 and $34.5 million in fiscal 2025.
In the regular session earlier this year, the General Assembly and Sanders authorized a $177.7 million increase in the state’s general revenue budget to $6.2 billion in fiscal 2024, with most of the increase allocated to education and corrections programs.
In May, the finance department projected a $423.3 million general revenue surplus at the end of fiscal 2024 on June 30, 2024.
Approximately $174 million will remain from the projected fiscal year 2024 surplus if tax cut measures become law, finance department spokesman Scott Hardin said Tuesday .
In a voice vote on Thursday, the state Senate rejected a motion by Sen. Bryan King, R-Green Forest, to suspend Senate rules to allow his proposed resolution to extend the special session by up to 15 days to consider a bill that would repeal the Arkansas Data Centers Act of 2023.
"Those things are not data centers," he said regarding to crypto mining facilities. "We were misled."
Information for this article was contributed by Will Langhorne of the Arkansas Democrat-Gazette.