Sanders Promises Fourth Tax Cut in Arkansas Special Session

Governor Outlines Ambitious Budget Plan

Arkansas Governor Sarah Huckabee Sanders delivered her State of the State address on April 8, 2026, at the start of the fiscal session, with education and specifically the continued rollout of Arkansas' LEARNS Act taking center stage. Sanders devoted the largest portion of her remarks to highlighting gains under the sweeping education law, pointing to rising reading scores, expanded school choice options, and increased teacher pay as evidence that the state is "finally on the right track."

The governor's proposed budget reflects that emphasis, increasing overall state spending by about 3% and setting aside up to $370 million for the state's school voucher program. More than 44,000 students are currently participating in the Educational Freedom Account program created under the LEARNS Act in 2023.

The Republican governor told lawmakers on Wednesday that she would call a special session to consider cutting the state's income tax by two-tenths of a percentage point if the Republican-dominated Legislature holds the line on the expansion of government "as soon as we pass our budget" in this year's fiscal session.

Tax Cuts and Economic Strategy

The governor wants to cut the state's top individual income tax rate from 3.9% to 3.7%, retroactive to Jan. 1, 2026. That would return more than $180 million to Arkansas taxpayers this year. She noted that Arkansas has reduced its income tax burden by 20% in the past three years and signaled plans to pursue an additional cut through a special legislative session later this year.

More than $180 million would go back to taxpayers in 2026 under the 0.2 percentage point cut, and the broader package of reductions since she took office would top $1.5 billion returned to Arkansans. Sanders is presenting the measure as the next installment in a four-year effort, not a stand-alone adjustment. The reference to four cuts in four years gives the proposal political weight for the governor because it links tax policy to a record she can point to as consistent and cumulative.

On Thursday, Sanders left the door open to adding corporate income tax cuts to the call for a planned special session, saying "that doesn't mean that we won't not include the corporate (income tax cut) too," adding that some of that will hinge on holding the line of the state's general revenue budget.

Budget Priorities and Government Efficiency

While education dominated the address, Sanders also highlighted increased funding for law enforcement and corrections, including pay raises for officers and the addition of 1,500 prison beds at existing facilities. The governor's proposed budget includes $53.4 million for a new state employee pay plan, with most of that funding directed toward salary increases for corrections officers and state troopers.

Sanders spoke about renegotiated contracts with child welfare providers and bringing an Office of Early Childhood web application in-house, saving $5.2 and $2.4 million, respectively. The governor estimated that Arkansas Forward would lead to $300 million in savings for Arkansas.

Political Opposition and Next Steps

Democrats quickly challenged the proposal. State Senator Fred Love, the Arkansas Democratic Party's gubernatorial nominee, said the plan favors high earners over core public services at a time when many families are already dealing with higher costs. He pointed out that 88% of those receiving EFAs were already attending private schools, essentially putting the state in the position of funding higher-income families at the expense of public school students.

Sanders is not asking lawmakers to consider a tax cut in isolation; she is making it contingent on a budget framework that avoids expanding Medicaid coverage mandates and avoids adding what she described as long-term ongoing expenses. In practice, that places the budget debate at the center of the tax fight. Before any separate session begins, lawmakers first have to settle the spending plan that will determine whether the governor moves ahead. The success of this latest tax reduction will depend on whether Sanders can maintain legislative support for her vision of limited government growth paired with continued tax relief for Arkansas residents.