LITTLE ROCK – In a four-day special session, the legislature lowered state taxes by almost $250 million this year.
Legislators also approved the governor’s proposal to prohibit state and local government officials from requiring proof of Covid vaccinations in order to qualify for services, employment or education. Arkansas had a ban in effect, but it expired in August.
Legislation to amend the Freedom of Information Act was approved to keep secret security measures in place for constitutional officers, justices of the Supreme Court and judges on the Court of Appeals.
If an agency needs to require proof of vaccinations in order to continue receiving federal funds, the agency may ask the Legislative Council for approval to do so.
Under the previous ban, agencies that offer health services had waivers permitting them to require employees to get vaccinated. Exemptions were granted to employees for religious or health-related reasons.
Legislation also was approved to clarify that schools must lock all doors leading outside during school time.
The tax cuts will benefit Arkansas in two ways. Income tax rates were lowered. The top rate will go down from 4.7 to 4.4 percent, beginning this year. That will save 1.1 million Arkansas taxpayers $75 million this year and $150 million next year.
The top rate for corporate income taxes will go down from 5.1 to 4.8 percent, saving 7,500 businesses $17.2 million this year and $34.5 million next year.
The tax relief measure includes a one-time credit of $150 for all taxpayers whose incomes is below $89,600. For taxpayers with incomes between $89,601 and $103,600 the amount of the credit gradually decreases. People whose income is $103,601 and above will not get a credit. The credit will save taxpayers about $156.3 million this year.
The legislature also created a reserve account and deposited into it $710.6 million from last year’s budget surplus. This reserve fund is a buffer for state government in the event of a downturn in the economy.
Arkansas operates under a strict balanced budget law. When economic activity slows down, people pay less in sales taxes and income taxes. When tax revenue drops, state government reduces spending proportionately.
If there is an economic downturn in the future that lowers tax revenue, legislators and state officials can draw from the new reserve fund to maintain essential state services. It will take approval from the Legislative Council, by a two-thirds majority vote, to draw from the reserve fund. If the legislature is in session, it will require a vote of two-thirds of the Joint Budget Committee.
Changing of the FOI law created the most drama of the special session. The original bill proposed by the governor generated opposition from groups who believed it would go too far in making government operations secret. After lengthy negotiations and lengthy public hearings in the Senate Committee on State Agencies and Governmental Affairs, senators reached a compromise that passed by a vote of 29-to-2.
The compromise restricts the public from accessing details about security measures in place to protect elected officials. The State Police are in charge of security for the governor, and recently there have been FOI requests seeking to discover details about the governor’s travel and security arrangements.
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