Lawmakers proposed 2026 fiscal budget of $6.49 billion as Gov. Sanders $750 million prison proposal fails on fourth try

By Wesley Brown

April 12, 2025—The Arkansas Legislature approved several key bills that are now headed to Gov. Sarah Sanders’ desk to sign into law before the expected end of the 95^th General Assembly that began over three months ago.

Among the key bills debated in the last full week of the session are legislation to increase the state’s per-student public school funding for the upcoming school year and the governor’s proposal to appropriate over $750 million in spending authority to build a new state prison in Franklin County in northwest Arkansas.

On Thursday, the Arkansas House passed HB1312, which amends public school funding by increasing the per-pupil amount by 5%, raising it to $8,162 for the 2025-2026 school year. Sponsored by Rep. Keith Brooks, R-Little Rock, that bill was approved almost unanimously in the lower chamber by a vote of 93-4. It was quickly referred to the Senate Education Committee, where it is expected to get a quick review and be sent to the Senate floor for approval before the session ends.

In other activity in the House, the lower chamber also, on Thursday, the Arkansas House passed several bills. HB1312 amends public school funding by increasing the per pupil amount by 5%, raising it to $8,162 for the 2025-2026 school year.

The House also passed HB1974, which mandates that state entities use E-Verify to confirm employment eligibility. Another bill, HB1806, gives parents the right to review and opt out of selected library media materials for their children.

Additionally, the House passed HB1975, creating the Child Content Creation Protection Act. This bill sets guidelines for how children should be compensated and protected when a parent or guardian uses their image for activities like vlogging, podcasting, social media influencing, or streaming, where compensation is received.

Other House legislation included HB1332, which requires the Arkansas Medicaid Program to evaluate claims for the frequency of obesity-related conditions and present the costs.

In the Senate, Senate Bill 354 by Sen. Jonathan Dismang, R-Searcy, did not receive the same favorable treatment as those house bills. After a fourth attempt to get out of the Senate, the bill fell short of the fourth-fifths majority approval required for an appropriations bill. The Senate’s 19-10 vote, including six presents, means that one of the governor’s key legislative priorities failed to get the legislature’s buy-in.

Under the bill, the legislature would have appropriated up to $750 million to the Arkansas Department of Corrections’ Division of Corrections for costs associated with prison construction in Frankly County. The Legislature had previously set aside $330 million for the proposed 3,000-bed penitentiary, plus an additional $75 million.

It also included an emergency clause allowing it to take effect on July 1, the start of the state’s fiscal year. The Legislature had previously set aside $330 million for the proposed 3,000-bed penitentiary, plus an additional $75 million.

The Senate also approved SB 263, a statewide tax cut lawmakers say will save Arkansas homeowners $56 million annually. That bill, which was approved by Senate and House votes of 33-1 and 99-0, respectively, was signed into law on March 18 as Act 330. The tax legislation will take effect in 2026, raises the homestead property tax credit by $100 to $600 a year. The credit is currently $500. About 708,000 homeowners will benefit from the lower real property taxes.

The governor and legislative leaders also announced that they will push for another tax reduction, House Bill 1685 to exempt food and groceries from the one-eighth cent state sales tax approved by voters in 1996 to benefit conservation efforts. HB 1685 will lower taxes by about $10.9 million a year. The bill does not repeal any local option city and county sales taxes on groceries.

That bill, sponsored by Rep. Kendon Underwood, R-Cave Springs, was approved on April 7 by the House in a vote of 96-2. HB 1685 received a “do pass” recommendation on Thursday and the Senate Revenue & Tax Committee and will come up on the Senate Floor next week.

On Tuesday (April 13), Gov. Sanders signed over 55 new bills into law, including the following: 

• HB1177, to amend the law regarding alcoholic beverages to clarify the law on private club advertising.
• HB1237, to regulate the business of taxicab, automobile, or similar vehicle engaged in carrying passengers for hire.
• HB1252, to modify the Arkansas Health Care Consumer Act; and to require coverage for prosthetic devices for athletics or recreation and prosthetic devices for showering or bathing.
• HB1514, now Act 253, to require that opioid overdose rescue kits be located on each campus of each public high school and state-supported institution of higher education.
• HB1633, now Act 475, to amend the law concerning the amount of property damage to a vehicle involved in an accident requires an accident report by law enforcement.
• SB380, now Act 439, to require records custodians to respond in writing in certain circumstances under the Freedom of Information Act of 1967.
• SB456, to prevent state-funded medical schools in this state from spending state general revenue funds from tax dollars on the name, image, and likeness of a student-athlete under the Arkansas Student-Athlete Publicity Rights Act.
• SB575, to amend the law concerning records to be posted on a website by the parole board; to permit the use of a mobile application for posting information concerning parole; and to create the “Safe Arkansas App”.

As a prelude to the end of the session next week, lawmakers in the House and Senate also approved the proposed Revenue Stabilization Act (RSA) for fiscal year 2026 that begins on July 1, 2025. Under SB637 and HB2003, the legislature intends to allocate Arkansas’s $6.49 billion budget and another $299.5 million in surplus funds.

The RSA, which prioritizes the distribution of state general revenue and maintains a balanced budget, was advanced from the Joint Budget Committee. The budgets in SB637 and HB2003 provide funding for general and higher education, human services, corrections, and other state agencies. The spending outlined is roughly $182 million above last year’s total.

The House and Senate reconvene on Monday when lawmakers say they expect to schedule all-day session at the Arkansas Capitol next week with plans to end the session by Tuesday, April 16. Since the session started in early January, Gov. Sanders has signed over 550 bills into law.