ACRE’s Mid-Session Legislative Update

By Dr. Jeremy Horpedahl, ACRE Director and UCA Associate Professor of Economics

The Arkansas General Assembly has now completed 7 weeks of its 2023 Regular Session. While there is still a lot more work to be done this year, we’ve already seen some major developments, and at ACRE we are closely watching several pieces of legislation where our research can help inform the debate and legislative process. I wanted to provide a summary of what has happened so far, and what to look forward to in the remainder of the session.

The biggest news last week was the release of the full details the LEARNS Act (SB 294), which is Governor Sanders’ major initiative to reform K-12 education in Arkansas. Not only is this bill important in its own right, but it will also be important for allowing other parts of the legislative agenda to move forward. Given the potential fiscal costs of the education reform, other spending and taxation changes were partially on hold until the details became clear. I recently spoke with Newsweek about how all of the proposed spending and tax changes in Arkansas might fit together this year.

The education reform bill has already made it through the Arkansas Senate and is expected to come up in the House next week. ACRE has published a variety of research on K-12 education and school choice in the past. In particular, several of our research papers address an important question in the current debate: does school choice hurt traditional public schools? Dr. Thomas Snyder summarizes his research and the research of other economists in a recent ACRE blogpost. In brief, most of the research suggests that school choice programs do not hurt student performance in traditional public schools.

Here are a few of the other pieces of legislation ACRE has been following.

While there has not been a major tax reform bill filed yet for Arkansas income taxes, there have been several bills related to the issue of local taxes. ACRE Policy Analyst Joseph Johns summarized the relevant local tax issues in another ACRE blogpost. The first bill Mr. Johns discussed would ban local governments in Arkansas from enacting income taxes, and it has already been enacted into law as Act 96. Another bill would require A&P taxes to be put before voters before they can be enacted or increased. These are local sales taxes —  primarily enacted by cities — on hotels, restaurants, and other similar businesses, but do not require a vote of the citizens. HB 1027 has already passed through the Arkansas House, and Mr. Johns testified before the House committee presenting ACRE’s research relevant to the bill.

Several bills have also been proposed which would improve local government transparency in Arkansas, and our Policy Analyst Dr. Joyce Ajayi has testified on several of them. HB 1318 would improve the bidding process for city governments in Arkansas, making the process more transparent, and it has passed the Arkansas Senate. Another transparency bill is even more closely aligned with ACRE’s research. HB 1399 would give city governments the option to publish budgets online, rather than in newspapers, which has the potential to save cities money, and would also improve their scores in ACRE’s web transparency index. ACRE’s index already planned to include cities in our new 2023 report, and this bill would give them an immediate improvement in their scores for fiscal transparency. Dr. Ajayi testified before the House committee on this bill as well, but it is currently on hold awaiting a fiscal impact statement.

We’ve also seen a major bill proposed related to ACRE’s research on occupational licensing. Policy Analyst Zach Burt explained in a blog post how SB 90 would improve opportunities for work in Arkansas by establishing “universal licensing recognition.” A law like this would mean that workers could move to Arkansas and not need to go through a lot of red tape to start working if they were already licensed in another state. The bill has not been presented in committee yet, but ACRE is prepared to share our research with the legislature when it is presented, potentially in the very near future.

Thank you for continuing to follow ACRE’s research and our educational outreach to the legislature. Be sure to continue checking our blog and subscribe to our newsletter (go to the bottom of this page: https://uca.edu/acre/) as we will continue to provide weekly updates throughout the session.