LITTLE ROCK, Ark. – Arkansas lawmakers gathered Wednesday on the second day of a special session called to address $1.6 billion in surplus money. Both chambers passed income tax cut legislation, which was the governor’s main focus.
The legislation will lower the top income tax rate to 4.9%. It will give most Arkansas taxpayers a one-time, nonrefundable $150 tax credit.
“Inflation has been a huge problem,” said State Sen. Jonathan Dismang, (R) District 28, who sponsored the bill. “We wanted to make sure we could provide relief to folks the best we can on a state level.”
The House passed its version of the bill shortly before the Senate did. Several senators spoke out against the bill, asking for money to be redirected to other sources.
State Sen. Keith Ingram, (D) District 24, said he worried about the legislation potentially jeopardizing millions of dollars in American Rescue Plan funding. The federal government can rescind some of the money if used improperly.
“I just don’t know why we’re in such a rush to do this and put almost a billion dollars of federal funding in jeopardy,” Ingram said.
Ingram said some lawsuits going through other states should come to a conclusion next month. He said Arkansas should have waited until then before deciding on this legislation.
“It’s hard to reconcile, to be honest,” Ingram said.
Dismang said he does not think ARPA funds will be impacted. A DFA administrator agreed with that assessment when the bill went through committee Tuesday.
“The department put out a very extensive memo outlining why they had that same position along with our attorney general,” Dismang.
The Senate also passed legislation that will allocate $50 million to school safety grants. No specific plans have been put in place yet. The House will vote on similar legislation Thursday morning.
The legislature will reconvene Thursday at 9 a.m.