Senate committee advances bill to cut top income-tax rates after brief testimony opposing the measure

Senator Jonathan Dismaine formally introduced SB 1 to the Senate Revenue & Tax committee, saying the bill would lower the state’s top individual income tax rate to 3.9% and the top corporate rate to 4.3% and move $290,000,000 from the general allotment reserve fund to the Arkansas reserve fund to help manage revenue shortfalls.

Keesa Smith Brantley, executive director of Arkansas Advocates for Children and Families, testified against the measure. She argued that Arkansas ranks near the bottom on child-wellbeing metrics and that recurring tax cuts make it harder to fund proven programs that support preschool access, maternal health and foster care. "Each time we cut taxes, those investments are a little bit harder to make," she said, and cited an analysis from the Institute on Taxation and Economic Policy that she said estimated the cut, including the homestead credit, would reduce state revenue by roughly $450,000,000.

Brantley tied the need for investment to outcomes such as kindergarten readiness, maternal mortality and infant mortality, and told committee members that some programs have seen only flat funding increases that do not keep pace with inflation. In response to questions from senators, she highlighted early-childhood education and the availability of child-care slots as areas that require state support to expand capacity and improve outcomes.

Committee members pressed differing views. Senator Blake Johnson asked whether returning tax dollars directly to parents might be a better investment than funding government programs; Brantley replied that preschool attendance at ages three and four improves school readiness and that families continue to face high child-care costs. Senator Payton noted that state revenue has continued to grow since prior tax cuts and asked whether the programs Brantley cited had seen actual cuts; Brantley said some line items have been flat and pointed to a 0.1% increase for the Division of Youth Services that does not match inflationary cost pressures. Senator Deese recounted recent tornado relief in his district to argue private giving can be fast; Brantley cautioned that private responses are uneven across the state and cannot substitute for uniform public investment.

After the testimony and questions, Senator Dismaine closed and moved that SB 1 "do pass." Senator Steve Crowell seconded the motion. The committee approved the motion by voice vote and the measure passed the committee stage.

The committee did not record a roll-call tally on the floor during the voice vote. The next procedural step will be placement on the Senate calendar for further consideration unless sponsors modify the bill.