Arkansas Voters Reject Issue 3 Economic Amendment
The constitutional amendment failed narrowly, with 50.7% of voters opposing it while 41 of 75 counties backed it.
Updated on Nov. 5, 2026 in Regional Economics
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Arkansas voters rejected Issue 3 on Tuesday, a constitutional amendment that would have permitted local economic development districts and public money for economic development programs. Supporters said they will regroup and consider a different proposal.
Why it matters
Supporters argued Issue 3 was needed to make Arkansas more competitive with other states by letting cities and counties offer economic incentives. Opponents said the measure would grow government and asked voters to approve a program whose rules had yet to be outlined.
Statewide, 50.7% of voters rejected Issue 3 while 41 of Arkansas' 75 counties supported it, according to the ballot results. The exact rules a replacement measure would carry have not been defined by supporters.
The players
Sarah Huckabee Sanders
Sarah Huckabee Sanders is the governor of Arkansas, who won reelection on Tuesday and has cut taxes four times over the past four years.
Jonathan Dismang
Jonathan Dismang is an Arkansas state senator who co-sponsored the resolution that referred Issue 3 to voters.
The details
Issue 3 would have amended the Arkansas constitution to permit public money for economic development programs, loans, and grants, and to let local governments create economic development districts where tax rebates could be negotiated. The Legislature referred the measure to voters through a resolution sponsored by Sen. Jonathan Dismang and Rep. Howard Beaty, and it was one of four measures on the November ballot.
Timeline
Tuesday (November 3, 2026): Voters narrowly defeated Issue 3 at the ballot box.
Wednesday (November 4, 2026): Hester said he plans to file a tax cut bill.
Next year's legislative session (2027): Hester plans to file his tax cut bill.
Season Trajectory
Issue 3's defeat arrives as Governor Sanders has cut taxes four times and lowered the income tax by 25% over four years, while her administration reports 75,000 new jobs. Supporters now plan more targeted proposals, which sets up a debate over whether economic development incentives will follow the same path as the broader tax-cut agenda.
Because Issue 3 failed, Arkansas cities and counties cannot create the economic development districts or offer the tax rebates the measure would have allowed. Residents will not see the new local incentive programs that supporters described, and any future version would require a fresh proposal.
The takeaway
The narrow result shows voters were divided on how much authority to give local governments over economic incentives. Any future proposal will need clearer rules to win support.
What happens next
Hester plans to file a tax cut bill during next year's legislative session in 2027, and supporters will conduct research on narrower economic development proposals.
Further reading
For more on state-level economic policy, explore Regional Economics coverage of Arkansas.
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