Broad Support
Issue 3 is about fairness, local control, and investing in our own communities. That’s why Yes on 3 received broad support and was voted to be included on this year’s ballot.
Sarah Huckabee Sanders
Governor
It “will help the Natural State compete on a level playing field with other states across the country that have similar incentives to support business development, helping us build on our status as a low-cost, high-growth destination for investment.”
Tim Griffin
Attorney General
"Issue 3 gives Arkansas communities the tools they need to compete for jobs, attract investment, and create opportunity—just like every state around us already have. In fact, we are one of two states have don’t have this job creation tool in our toolbox. That’s unacceptable, and we can change that by voting YES on Issue 3. Arkansas communities must have the ability to compete with communities in places like Texas and Alabama for jobs and investment. And Issue 3 will do it without raising taxes and impacting existing revenue streams."
Jonathan Dismang
State Senator
"Arkansas communities deserve the ability to compete on a level playing field for jobs and investment. Issue 3 allows economic development districts under state law and gives cities another practical tool to promote growth and opportunity, just like the states around us already do."
Leslie Rutledge
lieutenant Governor
"This November, I am proud to support Issue 3 to create more jobs. Arkansas cannot afford to sit on the sidelines while neighboring states race ahead. The Economic Development Amendment will help ensure our communities have every tool available to attract jobs, investments, and economic opportunities without raising taxes. Vote YES on Issue 3 and let’s keep making Arkansas First."
Additional Supporters include:
Breanne Davis - State Senator
Charles Snapp - Mayor of Walnut Ridge
Danny Shaw - Mayor of Bono
Jay Paul Woods - Mayor of Trumann
Jennifer Hobbs - Mayor of Wynne
Jon Milligan - State Representative
Josh Agee - Mayor of Paragould
Keith Futrell - Mayor of Pocahontas
Larry Fowler - Mayor of Ash Flat
Roger Lynch - State Representative
Steve Hollowell - State Representative
Arkansas Economic Leaders Back Issue 3 as Development Competition Heats Up
by Griffin Coop -
August 24, 2026, 12:00am
Arkansas Business
Mountain Home Mayor Hillrey Adams said he has a clear example of why he supports Issue 3, a proposed state constitutional amendment that would allow Arkansas cities and counties to use new tax revenue to help fund economic development projects within predetermined districts.
Adams said he was contacted last summer by a property developer who had plans to build a popular retail store and outparcels in the north Arkansas city, about 13 miles from the Missouri border.
The $15 million project on an undeveloped parcel of land on the east side of town would have generated an estimated $17 million in annual revenue through new property and sales tax collections.
The developer wanted the city to use some of the newly generated tax revenue to reimburse him for some of his expenses, like the road, water and sewer infrastructure for the development. But Arkansas law doesn’t allow such a rebate, Adams said, so he had to turn down the developer, who took the project to nearby West Plains, Missouri, which has different economic incentives.
Adams said he’s supporting Issue 3, a question on the Nov. 3 ballot, because it would allow cities and counties to construct deals like the one he rejected.
While the broad aims are clear, the Arkansas Legislature would have to enact enabling legislation with specifics setting out how the new economic development tool would work. In general, the amendment would allow cities and counties to create districts that could abate property taxes or sales taxes above historic levels within the district, similar to tax increment financing. The districts could also use the revenue to provide a rebate for developers or to require certain types of development within a district.
Economic development officials leading the campaign to pass the amendment say it will make Arkansas competitive with 48 other states that have similar incentives.
“I know there’s people in this town that would kill me if they knew I turned down this store that was on the table last year,” Adams said. “But we just can’t do it right now, and it would be a huge boost to have something like that in our area. That’s why I’m adamant to get this done.”
‘By a Thread’
Randy Zook said Arkansas needs more economic development incentives. Zook, who is the president and CEO of the Arkansas State Chamber of Commerce and Associated Industries of Arkansas, is the chair of Arkansans for Strong Communities, the ballot question committee supporting the amendment.
Zook said Arkansas has excellent incentives for manufacturing and industrial projects and that the state has used them to successfully attract big projects. But, he said, the state’s incentives for retail and housing are not competitive with most states, including every state surrounding Arkansas.
Arkansas communities need better options to attract the developments they need, including grocery stores, pharmacies, shopping centers and new housing. Those kinds of retail developments are competitive and developers tend to go where they get the best deal, Zook said.
And the best deal is often not in Arkansas even though many Arkansas towns need the tools to generate new capital investment, according to Zook, who grew up in McGehee in southeast Arkansas.
“The small towns in the Delta that are just hanging on by a thread need the ability to attract retail investment for the convenience of their citizens,” he said.
The amendment has the support of Gov. Sarah Huckabee Sanders, Lt. Gov. Leslie Rutledge, Attorney General Tim Griffin and the Arkansas Municipal League, among others. The Association of Arkansas Counties has not taken a position on the issue, a spokeswoman said. There is no organized opposition to the amendment, though there has been criticism, mostly from conservative groups and Republican members of the Legislature who believe it is not government’s role to steer tax dollars to private businesses.
Arkansans for Strong Communities has reported raising more than $1 million through the end of July with $183,767 in total expenditures.
The committee’s biggest contributions have come from companies in various parts of the construction and real estate industries. The largest contributions so far have been $107,500 from Dyke Industries of Fort Smith, $100,000 from the Arkansas Realtors Association and $100,000 from the Arkansas Economic Developers & Chamber Executives.
Other States
Cliff McKinney, a Little Rock lawyer who specializes in commercial real estate, frequently represents Arkansas clients doing real estate deals in other states where, he said, the economic development incentives are better.
Arkansas has an economic development tool called tax increment financing, or TIF for short, but McKinney said it isn’t much help after an Arkansas Supreme Court ruling in 2007 limited its use.
That law, approved by voters in a statewide election in 2000, allows local governments to rebate a portion of property tax revenue, above historic levels, that is generated within a district. But the Arkansas Supreme Court ruled that the first 25 mills of property tax are not available for collection in a TIF district, and McKinney said there usually isn’t enough remaining revenue to justify creating a district.
If Issue 3 passes, it would not need to meet the same standards as the 2007 Arkansas Supreme Court ruling. The measure would make property taxes and sales taxes created above historic levels available to economic development districts.
McKinney, who was part of a committee that helped draft the amendment, said the tax revenue captured by the district must also be spent within a district, but he noted that the districts do not have to be contiguous. That means, for example, a town could create a district in which it collects taxes at a new truck stop near an interstate exit and spend the money on a grant program to renovate businesses in its downtown area.
Missing Out
McKinney said Texarkana is a microcosm of how surrounding states’ economic development incentives have outpaced Arkansas’. McKinney said Texarkana, Arkansas, and Texarkana, Texas, have nearly everything in common, except the Texas side has been able to take advantage of an economic development tool since 1989 and the Arkansas side has not. He said 90% of the development in the area has been on the Texas side. He believes economic incentives are the reason.
State Sen. Jonathan Dismang of Searcy, a sponsor of the amendment in the Legislature and a member of the campaign committee, told a state legislative committee something similar last year. He said there is a “stark difference” in the retail options in Texarkana with more on the Texas side. “And a large part of that is because of the incentives they are able to offer and create in Texarkana, Texas,” he said.
McKinney said there are also examples in eastern Arkansas where the state’s manufacturing incentives have helped lure large projects with lots of jobs. But he said more housing is being built in nearby Mississippi and Tennessee because of the economic development incentives there. He said that’s hurting the growth of towns like West Memphis and Osceola.
“We can incent the factory but not the quality of life or housing that those workers need,” he said.
Chris Moses, the president and CEO of Little Rock real estate firm Moses Tucker Partners and a donor to the Issue 3 campaign, said Arkansas is “fighting a battle really with one arm.” He said Arkansas developers have a few incentives available like tax credits but they are hard to qualify for. And developers have to pay for infrastructure costs, like drainage and streets, for which they can’t be reimbursed in Arkansas, he said.
“If you can get that in Texas, then why even look at Arkansas?” he said.
Strategic Growth
Nelson Peacock believes Issue 3 can help rapidly expanding northwest Arkansas grow in a strategic way. Peacock, the president and CEO of the Northwest Arkansas Council, said the amendment would allow the area to create economic development districts to incentivize development that would limit suburban sprawl across the area.
If northwest Arkansas housing developments contribute to sprawl, there will be more cars on the road, more infrastructure needs for cities and less quality of life, he said.
If Issue 3 passes, Peacock believes, northwest Arkansas communities could create economic development districts to incentivize housing development in the places where they want it.
The Northwest Arkansas Council identified several areas in its strategic growth plan that it believes are ripe for increasing population density, such as areas in the U.S. Highway 71B corridor.
“We know the private sector is geared toward moving out where land is cheaper,” he said. “We know we need to incentivize different types of development in the future or that’s all we’re going to get.”
NIL Comparison
Zook and McKinney use an example from college athletics to explain why they believe Issue 3 is necessary to make Arkansas competitive with other states.
In college athletics, student-athletes can make money based on their name, image and likeness, called NIL, and teams use that as a way to entice players to attend their schools. McKinney said the University of Arkansas could choose not to offer NIL deals to players but that would put the university at a competitive disadvantage and would only work if every other team did the same thing.
“That’s what we’ve done to ourselves,” McKinney said of Arkansas’ economic development tools. “We’re the one state without NIL.”
Zook also said Arkansas needs the tools to be competitive, flawed as they may be.
“In a perfect world, nobody would do this,” he said. “But until Austin lays down its arms and Jackson, Mississippi, lays down its arms, this is a competitive world we’re in. We don’t have the tools to fight the fight right now. This will provide us those tools.”
Original Article can be found here: https://www.arkansasbusiness.com/article/issue-three-would-give-arkansas-cities-tool-most-states-already-have/
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