Tax Cuts Highlight Legislative Accomplishments of 2024
LITTLE ROCK – The legislature’s list of accomplishments in 2024 was highlighted by a $438 reduction in income taxes for Arkansas families and businesses.
Individual income taxes for about 1.1 million Arkansas taxpayers will go down because the legislature lowered the top rate from 4.4 percent to 3.9 percent.
The legislature also lowered corporate income taxes by changing the top rate from 4.8 percent to 4.3 percent, saving about $66.2 million every fiscal year. An estimated 7,800 corporations will benefit from the tax reduction.
The tax cuts were passed in a June special session.
In addition to lowering income taxes, the legislature also lowered property taxes. For assessment years beginning January 1, 2024, the homestead property tax credit will go up from $425 to $500, saving homeowners $46 million a year. The second full year it is in effect it will save homeowners about $47 million.
The legislature also met in fiscal session in 2024, approving a budget for the current fiscal year of $6.31 billion. That is an increase of only 1.76 percent over the previous year. Arkansas legislators have always been fiscally conservative, and the 2025 budget is one of the most conservative in the state’s history.
During the fiscal session lawmakers passed laws to tighten regulations of data centers and the newly emerging crypto mining industry. The laws protect homeowners from excessive noise near the data centers. Another goal is to ensure that their energy consumption doesn’t cause power failures.
In August more than 3,000 additional families applied for Education Freedom Accounts, bringing the total number of families in the program to about 15,000 this school year. The accounts were created in 2023 to promote greater school choice for families who choose to send their children to private or parochial schools.
In its first year the program funded 5,548 accounts, each providing $6,672 for help with tuition.
The same legislation that created Education Freedom Accounts also raised teacher salaries. Arkansas teacher salaries went up 3.2 percent last year, to an average of $54,309. The LEARNS Act set a minimum salary of $50,000. It will dramatically affect teacher salary figures in coming years.
The Legislature approved rules to implement a provision in the LEARNS Act that helps families pay for literacy tutors for children who have difficulties learning to read. The families of about 20,000 elementary students are eligible for a $500 grant to pay tutors to help their children move up to grade level. The students are in kindergarten through the third grade.
During the current school year the state Education Department began making grants available to Arkansas school districts to help implement cell phone restrictions in the classroom.
The grants can be used to pay for mental health services, via telehealth technology. It also is being used for secure pouches in which students lock away their cell phones during the day. Each pouch costs about $30. Teachers and other school personnel will have special magnets that unlock them.
When the legislature convenes in regular session in January, they likely will consider further restrictions on students’ cell phone use.