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Arkansas House defeats phased repeal of soda excise tax after hours of debate
Summary
A proposal to phase out Arkansas’ soda excise tax failed on the House floor after extended debate over budget impacts, Medicaid funding and economic fairness; the measure fell 49-38 with two present.
The Arkansas House rejected legislation to phase out the state’s excise tax on soft drinks by a vote of 49-38 with two present, ending a lengthy floor debate on a bill that divided members across fiscal and philosophical lines.
Representative David Ray sponsored House Bill 16 36, a multi-year, trigger-based phase-out of the soda excise tax. Ray and supporters argued the tax is regressive, unique to Arkansas, and burdens grocery stores, restaurants and consumers. He proposed a staged reduction tied to sales-tax revenues to protect the Medicaid trust fund and other fiscal priorities.
Opponents said the bill risked jeopardizing Medicaid funding and that the revenue streams the tax supports are already committed. Rep. Wooten warned the trust fund covers roughly 880,000 Arkansans and said the bill contained no absolute guarantee the state would replace the special revenues with general revenue if necessary. Several members repeatedly expressed concern about timing given federal funding uncertainty.
Key fiscal points recorded on the floor: - Sponsor cited the annual soft-drink excise yield at about $42.8 million and described it as special revenue used to support Medicaid-related accounts. - DFNA and members noted the Medicaid trust fund balance referenced in debate at one point as about $524 million. - The bill used revenue triggers: reductions required DFNA certification that sales-tax receipts from soft-drink sales met benchmarks before each step of phase-down.
Why it mattered: The proposal sought to remove an excise tax enacted in 1992 that supporters called anachronistic and unfair; opponents warned of downstream effects on health-care funding and local services that rely on the revenues.
Outcome: The floor voted the bill down, 49 in favor, 38 opposed, 2 present. The sponsor said the phase-out was incremental and tied to revenue triggers, but many members remained unconvinced the triggers sufficiently protected prioritized spending.
Ending: The defeat leaves the soda excise tax in place; supporters said they may revisit the idea in future sessions with alternative protections for affected funding streams.
