With improving Arkansas' maternal health and revising the state's higher education funding model among the top priorities, Arkansas' 95th General Assembly will assemble beginning at noon on Monday.
Other issues will include the state's general revenue budget, overhauling the pay plan for executive branch employees, limits on cellphones in the schools, streamlining the state's gun laws, and tax cuts as well as affirmative action, affordable housing, energy, immigration, mental health, tort and water-related issues.
Gov. Sarah Huckabee Sanders will reveal her priorities during her State of the State address to state lawmakers on Tuesday. The Arkansas House includes 81 Republicans and 19 Democrats. The Arkansas Senate includes 29 Republicans and six Democrats.
Regarding the Republican governor's major priorities during the session, Sanders spokesman Sam Dubke, in a written statement, said, "This session, the Governor will build on her administration's past success in education, public safety, and fighting inflation."
Asked whether Sanders' focus on higher education during the regular session will be linked to workforce training and revising the state's higher education funding model, Dubke replied last week that "The Governor plans to champion legislation that ensures our higher education system is focused on preparing students for the jobs of the future, not woke nonsense."
Pressed about whether the governor plans to propose, support or oppose legislation banning diversity, equity and inclusion programs at the state's higher education institutions, Dubke referred back to his previous statement about higher education.
Arkansas House Speaker-designate Brian Evans, R-Cabot, said with the published positive feedback that the executive branch has received over the governor's "no cell phones in classrooms pilot program, I fully expect there to be some type of legislation to enact that statewide."
Evans -- who is in line to be elected as House speaker on Monday and will announce the appointment of committee chairpersons -- said last week in an interview that there continues to be consistent dialogue among representatives on maternal health, mental health, higher education funding and water issues across the state, and "those seem to be the four big topics."
Arkansas Attorney General Tim Griffin said last week in a written statement that "In this year's session, I will be advocating for much-needed legislation on a number of issues, including juvenile justice reform, organized retail crime, human trafficking, and cybersecurity.
"In 2023, I worked closely with members of the General Assembly and Governor Sanders to pass the Protect Act, which has already made Arkansas a safer place to live, work, and travel," the Republican attorney general said.
During the regular session, state lawmakers will consider the governor's proposed general revenue budget of $6.49 billion for fiscal 2026 that begins July 1 -- a $182.5 million increase, with most of the increased general revenue allocated to the state's Education Freedom Account voucher program and the state Department of Corrections.
The governor's proposed general revenue budget envisions a $299.5 million general revenue surplus at the end of fiscal 2026.
State lawmakers will also consider the governor's proposed overhaul of the executive branch pay plan with a projected price tag of about $102 million and the aim of using existing state budgets to cover virtually all of that cost.
The proposed pay plan would raise salaries for about 14,539 executive branch employees -- about two-thirds of the Cabinet agencies' workforce. The proposed pay increases are intended to bring these state employees up to comparable private labor market rates and are targeted toward employment areas facing chronic shortages, including correctional officers, family service workers, Arkansas State Police troopers and nurses, according to the governor's office.
During the regular session, the General Assembly also may refer up to three proposed constitutional amendments to voters in the 2026 general election.
BUDGET
The governor's proposed budget would increase general revenue funding for the Education Freedom Accounts by $90 million to $187.4 million in fiscal 2026 to accommodate thousands more students in the program, plus $90 million more in set-aside funding "to ensure all Arkansas families have access to the full EFA amount, even if demand exceeds expectations," the governor said in unveiling her proposed budget on Nov. 21.
The state's Education Freedom Accounts are vouchers designed to help students attend private school, parochial school or home school.
The Education Freedom Accounts were created under Sanders' signature education initiative called the LEARNS Act, which was enacted in the 2023 regular session. The LEARNS Act also increased starting teacher pay from $36,000 to $50,000 a year and authorized $2,000 raises for other teachers.
In all, 14,297 Education Freedom Account participants were funded in fiscal 2025, which ends June 30, said Kim Mundell, a spokeswoman for the state Department of Education.
The governor's request for $90 million in additional funding for the Education Freedom Accounts in fiscal 2026 "will provide approximately 12,400 new Education Freedom Accounts in addition to funding the increase to existing EFAs, for a total of approximately 26,700," she said. "An EFA will be worth a maximum of $6,994 per student (90% of fiscal 2025 foundation funding)."
If the additional $90 million in proposed set-aside funding is needed for the Education Freedom Accounts, that "would provide approximately 12,800 more new EFAs in (fiscal 2026), bringing the total to approximately 39,600," Mundell said.
The governor's proposed general revenue budget includes no increase in general revenue for the state's public school fund of $2.48 billion in fiscal 2026.
The state's educational adequacy fund -- financed with a 0.875% share of the state's sales tax -- would pay for increases in fiscal 2026 and fiscal 2027 to cover the House and Senate education committees' recommendations for providing an adequate education to the state's public school students, said state budget director Robert Brech.
The House and Senate education committee's recommendations call for an estimated $99.5 million increase in the state's share in fiscal 2026 and a $62.2 million increase in the state's share in fiscal 2027, according to Bureau of Legislative Research records.
State Department of Finance and Administration spokesman Scott Hardin said that "Our current estimate is a balance of $795.6 million" in the the state's educational adequacy fund at the end of fiscal 2025.
The governor's proposed budget would increase general revenue funding by $48.2 million to $480 million for the Department of Corrections' Division of Correction in fiscal 2026 and by $2.4 million to $107.7 million for the Department of Corrections' Division of Community Correction in fiscal 2026. About $40 million of the general revenue increase is for the new medical contract, according to state officials.
The governor's proposal would increase general revenue funding for county jail reimbursement by $9 million to $34.8 million.
On Nov. 8, the state Board of Corrections voted to approve the purchase of an 815-acre property in Charleston, with plans to build a new 3,000-bed prison there.
The action came a day after area residents gathered for a town hall meeting where residents voiced frustrations and state officials answered, to varying degrees, questions about the surprise $2.95 million purchase of the land in the north part of town with the intention of building the correctional facility.
On Oct. 31, Sanders announced the purchase of the land and the state's intentions to make it the site of a new prison. Local leaders and area lawmakers have sharply criticized the move. The state has set aside $405 million for the prison, Hardin confirmed, but state officials have said they don't yet know the total cost for the project.
Arkansas Senate President Pro Tempore Bart Hester, R-Cave Springs, said last week in an interview "that issue is resolved for most members.
"We know we need a prison," he said. "We have been funding a prison. They selected a site. We are going to build a prison. ... One member can file a dozen bills. I just do not think it is going to receive a significant amount of focus in the session."
But Sen. Bryan King, R-Green Forest, said Friday that "Hester and others have spent years underfunding corrections.
"We cannot afford this $1.5 billion financial disaster," he said in a written statement. "I would say this if it was in Franklin or any other county. Don't try to make this like it's just because it is Franklin County."
Hester said Friday in a written statement that "Unfortunately for the people King represents, it has been a very long time since his policy recommendations have been taken seriously by the Legislature."
The state's General Revenue Allotment Reserve balance, which includes unallocated surplus funds, totals $384.2 million, said Scott Hardin, a spokesman for the state Department of Finance and Administration.
The state's Catastrophic Reserve Fund balance is $1.8 billion, he said.
The state's overall balance in the Restricted Reserve fund is $2.2 billion, which includes a balance of $1 billion in the Arkansas Reserve Fund Set-Aside fund, Hardin said.
MEDICAID AND MATERNAL HEALTH
Arkansas has one of the nation's highest rates of maternal and infant mortality.
Sanders said in a Nov. 21 letter to the Joint Budget Committee that "As a mom of three, I am also focused on addressing Arkansas' concerning maternal health statistics.
"This budget includes $13 million in new Medicaid funding for proposals created by the Strategic Committee on Maternal Health I convened earlier (in 2024)," she wrote. "Additionally, this budget includes $100 million in set-aside funding for Medicaid sustainability."
The governor proposed a $21.5 million increase in the state Department of Human Services' budget to $1.85 billion in fiscal 2026.
Evans said last week that "the governor has set aside some funding already to help move us to a better level of care.
"There is a lot of work still yet to be done on that, and I look look forward to working with executive branch on how to bring Arkansas up to a better level of maternal care," he said.
House Democratic leader Andrew Collins of Little Rock said "what has been discussed isn't enough to do what we need to do.
"We recognize we have a lot of work to do," he said.
According to KFF, formerly known as the Kaiser Family Foundation, Arkansas is the only state that either has yet to extend postpartum coverage past the 60-day minimum required under federal law, or has no plans to do so.
State Rep. Aaron Pilkington, R-Knoxville, has filed a bill to extend Medicaid postmartum coverage from two months to 12 months. It would all0w new mothers to receive the extended postmartum coverage through the state's Medicaid expansion program -- Arkansas Health and Opportunity for Me, or ARHOME, where the state purchases health insurance on behalf of those enrolled in the program. Mothers who don't qualify for ARHOME would receive the extended coverage through the state's traditional Medicaid program.
Collins has filed a similar bill.
The governor has said she is opposed to extending Arkansas' postpartum Medicaid coverage to 12 months. According to the governor, postpartum women in Arkansas already have other coverage options through Medicaid or private health insurance and that the state just needs to do a better job of switching them to other forms of coverage when their pregnancy Medicaid coverage ends.
Under then-Gov. Asa Hutchinson, Arkansas became the first state to implement work requirements for a Medicaid expansion in June 2018, during President Trump's first term.
More than 18,000 people lost their health coverage while the requirement was in place over nine months. A federal judge blocked the requirement in a 2019 ruling. At the time, the state's Medicaid expansion program was known as Arkansas Works.
Asked whether the governor wants to propose a work requirement for the Medicaid expansion program when the state submits its request for a waiver to the Trump Administration and if so why, Dubke said last week in a written statement that "The Governor looks forward to working with the Trump Administration to save taxpayer money and continue Arkansas' record as a national leader in conservative reforms."
ARHOME's waiver from the federal government expires on Dec. 31, 2026.
As of Dec. 1, the state Medicaid program had 863,117 beneficiaries, including 414,678 children, 224,560 in ARHOME and 223,879 other adults in the program, according to the state Department of Human Services' website.
HIGHER EDUCATION
The governor's proposed general revenue budget would reduce the total general revenue allocations for the state's two- and four-year colleges from $778.8 million in fiscal 2025 to $777.5 million in fiscal 2026.
The proposal would also increase the general revenue allocation for higher education grants by $3 million to $43.6 million in fiscal 2026 and trim the general revenue allocation for the sustainable building maintenance program for higher education institutions by $1.7 million to $2.8 million.
In mid-August, the governor said she wanted to focus on higher education in the 2025 regular session.
Improvements in higher education are needed to provide the skilled workforce vital to business expansion and the state's economic growth, the governor said during an Aug. 13 stop in Rogers. The Arkansas Division of Higher Education subsequently contracted with Austin, Texas-based HCM Strategists LLC for $107,500 to conduct an analysis of return on investment in the state's higher education funding formula through the end of last year.
Hester said that "I think the Legislature is aligned with the governor in that we invest a huge amount of money in higher ed.
"I think it is money well spent when we are educating for the jobs that Arkansas businesses need, so I believe that we are going to find a way to incentivize institutions of higher education to produce credit hours and degrees that match the needs of Arkansas and we will find a way to less incentivize degrees that there are less of a need for Arkansas," by changing at least portions of the state's higher education funding formula, he said.
State Sen. Dan Sullivan, R-Jonesboro, said he is working on legislation mirroring Florida's law aimed at banning diversity, equity and inclusion programs at the state's higher education institutions.
In May 2023, Florida Gov. Ron DeSantis signed a bill into law banning the state's public colleges and universities from spending money on diversity, equity and inclusion programs.
As to whether the diversity, equity and inclusion legislation will be coupled with the changes in portions of the state's higher education funding formula, Hester said that "we are discussing the merits of a big bill versus a package of bills right now, but I can assure you that DEI will be part of the package for the bill.
"Ultimately, the goal is every contractor, every employee, every professor and every student has an equal shot at those roles," he said, and no one has an advantage or disadvantage.
During the Nov. 5 general election, voters handily approved a proposed constitutional amendment to allow Arkansas Lottery proceeds to be used for scholarships and grants for student enrollment in vocational technical schools and technical institutes.
The proposal is now Amendment 103 to the Arkansas Constitution. The Legislature will consider enacting a companion measure to implement the constitutional amendment.
ENERGY
Hester said that "energy policy is going to be something that gets a lot of focus, and that's from wind policy to net metering to the role of the Public Service Commission.
"I have seen drafts of bills for all of the above," he said. "I have been here long enough to know when people start lobbying up you know that there is something coming up.
"All of these issues can be negotiated beforehand on what we do, and I always prefer that," Hester said. "We probably usually have a better outcome when we negotiate something."
He said Arkansas has some of the cheapest energy in the nation and "we are seeing, and will continue to see, businesses flock to Arkansas. So how do we continue to provide cheap energy?"
Hester said there is discussion about "adjustments within the PSC -- like if we have been doing something for 20 years, do we have to continue to do it that way?"
Evans said there is a need for more availability of electric power with businesses and industry moving to Arkansas and he expects to see some type of energy policy to help the state and energy companies provide that.
IMMIGRATION
Hester said one of the things that matters to Americans, based on the Nov. 5 federal election, is "getting illegal immigration under control.
"I think anything that Arkansas can do to help support the federal government in locating and removing bad guys we should do," he said. He added that he doesn't count everybody who came to America illegally to be a bad guy.
"But there are plenty of bad operators, and I suspect that we will look at what we can do to support the federal government in session," he said.
Hester pointed out that Benton County is one of the few counties that cooperate with U.S. Immigration and Customs Enforcement, and "I hope we find a way to encourage more of the state to cooperate with ICE."
AFFIRMATIVE ACTION
Sullivan filed Senate Bill 3, which is aimed at ending affirmative action programs in state and local government.
The bill is similar to legislation Sullivan sponsored in 2023 that passed the Arkansas Senate, but failed to clear the House.
The bill states, "The state shall not discriminate against, or grant preferential treatment to, an individual or group on the basis of race, sex, color, ethnicity or national origin in matters of state employment, public education or state procurement."
The bill would repeal an Arkansas law that requires state agencies to adopt programs designed to increase the percentage of minority employees within their office, as well as Arkansas laws on recruitment of minority teachers at public schools and retention of minority staff, faculty and students at state colleges and universities.
AFFORDABLE HOUSING
Hester said that there is going to some focus by lawmakers on affordable housing in many different directions.
"We just need more homes, and that means we have got to have a better availability of sewer and water to develop the land that we have," he said. "Something we are going focus on is how do we get through the government regulations of municipalities that are, as a general rule, very hostile to any housing."
TAX CUTS
Evans said that he expects "very minimal tax cuts" during the regular session.
"We have been fairly clear and transparent that we do not intend to make any additional cuts to the income tax during the session," he said. "We want to get another two or three quarters behind us and see how the economy rebounds itself with a new administration in D.C., and then from that it will give us better tools to make wise decisions -- hopefully in the fiscal session in 2026."
The individual and corporate income tax rate cuts enacted during the June special session are projected by the finance department to reduce state general revenues by $483.5 million in fiscal 2025 and by $322.3 million in fiscal 2026.
Hester said "we are in general agreement that we are going to do income tax (cut) discussions after session, closer to June when we know what our year end looks like.
"That doesn't mean that we won't discuss other tax (cut) bills during the session," he said.
Hester said he expects to introduce a bill to eliminate the state's 0.125% sales tax on groceries, and possibly eliminate the sales tax on groceries at the local government level.
"The desire would be (to) have no tax on groceries, none," he said.
The state's 0.125% sales tax on groceries raised $10 million in fiscal 2024 that ended June 30 on the state level, Hardin said.
On the local level, the grocery tax generated $279.8 million in fiscal 2024 and the total sales tax on the local level generated $1.97 billion in fiscal 2024, he said. Any local sales tax implemented at the city and county level currently applies to the purchase of groceries, he said.
State Rep. Bart Shultz, R-Cave Springs, who sponsored a law raising the homestead property tax credit from $425 to $500 per parcel in the June special session, said it's highly likely lawmakers will be able to increase the homestead property tax credit during the regular session, but "I don't have a direction of how much yet."
He said he is waiting to see the annual report about the property tax relief trust fund from the state's chief fiscal officer, due at the end of this month.
LENGTH OF SESSION
As for the expected length of the regular session, Hester said that "the best way I can articulate it is 'long enough to get the job done.'"
Evans said that "we are not going into this session with a predetermined date.
"We are going to take care of the people's business," he said. "We know inevitably, when it comes to the last two or three weeks of the session, it gets really really busy. If we can doing things to help slow that down a little bit, so that members have a better feeling of the deliberations that (are) going into the process, then we are very willing and open to doing that, so setting a predetermined date that ... (and saying) 'we are going to be done by that date,' we are not doing that."
Evans said legislative leaders plan for the Legislature to take off "the entire week of spring break" by recessing on March 20 and returning on March 31. It's a time during the session when it's good for people to have the ability "to recharge and deprogram," he said.