State legislature moves to cut taxes but who benefits?

Update (May 6): The tax cut bills have now passed both chambers and were signed into law by the governor today, officially closing out the special session.

The First Extraordinary Session of the 95th General Assembly started Monday, May 4 and lawmakers were already moving quickly on another round of tax cuts.

Before things even got started inside the Capitol, Arkansas Community Organizations held a press conference outside raising concerns about what these cuts could mean for everyday Arkansans. Especially when it comes to schools, healthcare, and support for families.

The session was called by Governor Sanders with the goal of cutting income taxes again. The proposal would:

• Lower the top personal income tax rate from 3.9% to 3.7%

• Lower the top corporate income tax rate from 4.3% to 4.1%

Those numbers might not seem huge, but they’re part of a much bigger trend. Since 2015, Arkansas has steadily cut taxes, bringing the top personal rate down from 7% and the corporate rate from 6.5%.

During the committee meetings, community advocates and Democratic legislators spoke out about the real impact these cuts could have. They raised concerns about already underfunded schools, strained healthcare systems, and the long-term consequences for essential services across the state.

Despite that testimony the bills quickly advanced and are on track to be passed and signed into law.

Supporters of the cuts argue they won’t harm state services, but that claim doesn’t line up with what many Arkansans are already experiencing. Core programs from education to child welfare to community support systems are already stretched thin.

And while the state has reported budget surpluses, that doesn’t necessarily mean everything is working well. In many cases, it points to the opposite. When services are struggling while money is left unspent, it suggests we’re not fully investing in what people actually need.

According to community advocates:

• Over 90% of the tax savings are expected to go out of state

• The average Arkansan would see about $17 to $33 a year in savings

For more information, the AACF has created a map of what each county stands to lose from budget cuts. 

This isn’t just about tax policy it's about priorities. Are we going to continue cutting revenue while essential services are already under pressure, or are we going to invest in the things Arkansas families rely on every day?

With the special session expected to wrap up as soon as the bills are signed, the work doesn’t stop here. Attention now turns to the upcoming legislative session in 2027 and making sure people are informed, engaged, and ready to push back against further tax cuts that could take Arkansas all the way to a 0% income tax.

If you’re wondering what you can do - this is the moment to get involved. Join the Progressive Caucus and connect with the coalition of organizations and community groups already doing this work across the state.

That can look like helping organize, sharing info, showing up when you can, or just staying in the loop. The more folks we’ve got involved, the stronger we’ll be going into the next session.