Arkansas currently has multiple government “tools” for “economic development,” including revenue bonds, voter-approved tax-backed bonds, local ordinance authority, and a dedicated state agency which manages a dozen “Divisions.” And these tools are actively used.
Issue 3 (on the Nov 3 ballot) would expand certain options, particularly around “lending of credit” (meaning the ability to tax Arkansans to pay back government loans) and adding new district structures which can make lending decisions absent voter-approval and without input of county and municipal governments. But notice–these expanded “tools” are not filling a vacuum.
Existing Bond and Local Financing Tools:
- Revenue bonds (Amendment 65): Available to local governments and districts;
generally no voter approval is required; secured by specific pledged revenues. Lenders bear the risk of revenue shortfalls. - Tax-backed bonds (Amendment 62): Cities and counties can issue bonds for capital
improvements and certain economic development with majority voter approval and debt limits (generally 20% of assessed value for municipalities, 10% for counties). Taxpayers bear the risk. - State general obligation bonds (Amendment 20): These are backed by the “full faith
and credit” of the taxpayers and can be repaid in any manner available to the state for generating revenue. Possible only with statewide voter approval. - Local actions by ordinance: Improvement districts, certain incentives, and partnerships that require approval by the city council or quorum court.
- Grant and bond-related programs administered by the Arkansas Economic
Development Commission (AEDC): The AEDC manages or coordinates a range of
grants (Community Development Block Grants, Rural Services grants, Site Development Program awards, small-business and accelerator grants, and others) and works with local governments on incentive packages and financing structures that support projects using the bond tools listed above.
Does Arkansas Currently Use These Tools?
Yes. The AEDC coordinates projects through roughly a dozen functional divisions (Business Development, Business Finance, Community Development, Existing Business, Grants, Rural Services, Small Business & Entrepreneurship, Film, Military Affairs, Strategic Initiatives, and others).
The AEDC regularly announces projects that use the existing incentive and financing framework. Recent reported totals: (these are cash disbursements reported by AEDC – not tax credits or private investment)
| Year | Incentive Payments Disbursed | Grant Payments Disbursed | Training Grants Disbursed | Source |
| 2022 | $34.4 million | $60.6 million | — | 2022 Annual Report |
| 2023 | $12.7 million | $27.7 million | $132,000 | 2023 Annual Report |
| 2024 | $16.0 million | $9.7 million | $137,000 | 2024 Annual Report |
| 2025 | $17.7 million | $9.7 million | $137,000 | 2025 Annual Report |
These figures reflect projects that operated and were funded under current law using existing incentives, bonds, grants, and local approvals.
What Would Issue 3 Change?
Issue 3 would add Economic Development Districts that may issue bonds outside ordinary debt limits and outside the safeguards in Amendments 62/65, plus give broader authority to cities and counties to lend credit (repay bonds with taxes) or appropriate public money for private economic-development projects (broadly defined to include activities tied to jobs, underemployment, commerce, or real-estate development).
Issue 3 would remove Constitutional voter checks on government borrowing and increase taxpayer liability on bond shortfalls.
It would not create the first available “Economic Development Tools”
Arkansas government already engages heavily in taxpayer funded “economic development.” It recruits, expands, and finances projects through AEDC and local governments.
Issue 3 would remove many existing limits on government borrowing – not “create” an economic development toolbox.
It would let Economic Development Districts issue bonds outside ordinary debt limits and constitutional restrictions, generally without voter approval. It would give cities and counties power to lend credit or appropriate public money for private economic-development projects.
In practical terms, it would move these decisions into the hands of smaller appointed or self-selected bodies that no longer need majority voter approval or the ordinary approval of a city council or quorum court, while removing external debt and lending-credit guardrails.
IN CASE YOU MISSED IT…
Rep. Brit McKenzie: Why I’m voting No on Issue 3.
Op-Ed: Vote No on Issue 3. The Trojan Horse already sent you the bill.
Will Issue 3 Allow Arkansas to Compete Economically with Texas?
False Starts – The Story of “Economic Development” in Jefferson County, Arkansas
“Economic Development:” Two Words That Settle Nothing
The Rich Get Richer: Issue 3 and the Reverse-Robin-Hood Effect
Act 576: The Government Power Grab You Weren’t Supposed to Notice
Op-Ed: We Won the Steel. Now We Have to Win the People
Mississippi County, Arkansas: A Case Study in “Economic Development” Districts
