State Capitol Week in Review
August 21, 2026
The Joint City, County, & Local Affairs Committee met in Hot Springs recently to review and discuss Senate Joint Resolution SJR15, known as Issue 3 on the November ballot.
The proposal would amend the Arkansas Constitution to give the General Assembly broad new authority to support economic development across the state. It would allow lawmakers to create “economic development districts” within cities, counties, or multi-county regions, and permit those districts to issue bonds, levy certain charges, and receive public funds for development projects.
The amendment would allow public money, including loans and grants, to be used for a wide range of economic purposes such as reducing unemployment, expanding transportation and commerce, and improving or developing real estate tied to economic growth. Economic development districts created under this authority could finance projects and issue bonds without being subject to the state’s existing constitutional debt limits.
Local governments would also be allowed to provide funding or lend credit to these districts, an exception to current prohibitions on aiding private entities. The amendment revises definitions of “economic development projects,” “services,” and “infrastructure,” expanding eligible uses to include manufacturing facilities, corporate headquarters, sports complexes, industrial parks, and more.
Property located within an economic development district would be exempt from most taxes, except those levied by the district itself. The amendment also clarifies that bonds backed by property taxes for economic development must still be approved by local voters.
Finally, the measure gives the amendment priority over any conflicting constitutional provisions and includes a severability clause.
Bill sponsor Senator Jonathan Dismang presented to the committee along with Justin Allen, partner at Wright, Lindsey, and Jennings LLP.
There was further discussion on local impact of potential Economic Development Districts from Pope County Judge Ben Cross, Clark County Judge Troy Tucker, and Hillrey Adams, the Mayor of Mountain Home.
Arkansas offers a range of incentives for major industrial projects through the Economic Development Commission, many of them tied directly to job creation. The state also boasts one of the nation’s strongest tax credits for rehabilitating historic buildings. Local officials, however, say a key piece is missing. Arkansas lacks the tools used in most other states to spur investment in retail development, office space, housing, and recreational projects. Forty-eight states provide local sales tax rebates or tax abatements that encourage private investment and help fund the infrastructure needed to support it. Arkansas and Arizona are the only states without such incentives. As a result, local leaders, especially in border communities, say they routinely watch potential projects slip away, either to neighboring states or not at all, because Arkansas cannot offer comparable incentives.
The officials said that Issue 3 gives local control to communities to make their own decisions about incentivizing development they may need.
Senator Dismang emphasized that the development tools are not one-size-fits-all by design. Different tools may be leveraged in different areas to help a community’s specific goals.
If approved by voters, Issue 3 will take effect January 1, 2027.