Comptroller warns proposed constitutional amendment could shrink local property tax revenue

Comptroller Mike Hutchens told Pulaski County’s budget committee that SJR 15 (also referred to in discussion as Senate Bill 647 or "Issue 3") would create economic development districts with the ability to levy taxes and could exempt property in those districts from county property tax except for taxes levied by the districts themselves.

“Local tax entities will see a decrease in property tax collections,” Hutchens said, summarizing points from the fiscal-impact materials he had circulated. He said the proposal would appear on the November ballot as a constitutional amendment and that counties and public schools, which rely heavily on property tax revenue, should be aware of the potential consequences.

At a recent Arkansas Association for Counties meeting, Justice Person reported that supporters framed the change as a way to attract businesses that otherwise locate in neighboring states offering tax incentives. Person said meeting presenters described Arkansas and Arizona as among the few states without comparable economic‑development districts and urged local officials to read the DFA fiscal impact analysis carefully.

Committee members expressed concern that campaign messaging could emphasize lower taxes without explaining possible losses to local revenue streams. Hutchens said the DFA fiscal-impact statement offered possible amendment language and suggestions, but he emphasized uncertainty about final legislative or ballot language and encouraged members to study the documentation.

The committee took no formal action on SJR 15 at the meeting; members said they would continue to monitor the matter in the months before the November ballot.