“There is significant evidence that reductions in marginal state tax rates encourage state economic growth …Rates on productive behavior should be reduced.” “Reduce the state’s income tax…repeal the state’s capital gains tax.” Arkansas Policy Foundation, Murphy Commission project, 1998
(December 2017) Nine years into a national economic expansion Arkansas’ economy trails the national average in jobs creation, according to U.S. Bureau of Labor Statistics records.
Arkansas payroll employment has increased 8.3% since the expansion began in June 2009.1 By contrast, U.S. employment increased 12.2%, BLS records show.2 U.S. jobs creation also expanded at a higher percentage rate (5.5%) in the preceding expansion (November 2001-December 2007). Arkansas employment grew 5.2% in the period.3
State Legislators Examine Jobs Issue
State legislators on the Arkansas Tax Reform and Relief Task Force are reviewing the state’s fiscal structure. The task force’s4 purpose “is to examine and identify areas of potential reform and to recommend legislation” for consideration during the 2019 regular session.
The act specifies the panel examine the following issues:
(A) Modernize and simplify the Arkansas tax code;
(B) Make the Arkansas tax laws competitive with other states in order to attract businesses to the state;
(C) Create jobs for Arkansans; and
(D) Ensure fairness to all individuals and entities impacted by the tax laws of the State of Arkansas.
Arkansas Also Trails Region
Payroll employment is the broadest economic indicator at the state level. BLS records also show Arkansas trails most states in the 12-state southeast region in the current expansion.
| State | June 2009 | October 2017 | Growth Rate |
| Florida | 7,221,100 | 8,655,100 | 19.9% |
| South Carolina | 1,808,600 | 2,102,500 | 16.3% |
| Tennessee | 2,602,800 | 3,023,400 | 16.2% |
| Georgia | 3,898,300 | 4,510,100 | 15.7% |
| North Carolina | 3,896,500 | 4,439,300 | 13.9% |
| Kentucky | 1,754,200 | 1,949,400 | 11.1% |
| Virginia | 3,652,200 | 3,973,100 | 8.8% |
| Arkansas | 1,161,400 | 1,258,200 | 8.3% |
| Alabama | 1,883,600 | 2,012,200 | 6.8% |
| Mississippi | 1,095,800 | 1,153,600 | 5.3% |
| Louisiana | 1,896,900 | 1,977,700 | 4.3% |
| West Virginia | 749,400 | 748,700 | -0.09% |
Arkansas also trailed most states in the preceding expansion.
| State | Nov. 2001 | Dec. 2007 | Growth Rate |
| Florida | 7,123,000 | 7,931,800 | 11.4% |
| South Carolina | 1,796,500 | 1,949,300 | 8.5% |
| North Carolina | 3,847,000 | 4,168,200 | 8.3% |
| Virginia | 3,496,100 | 3,777,000 | 8.0% |
| Alabama | 1,895,900 | 2,013,400 | 6.2% |
| Georgia | 3,933,700 | 4,170,300 | 6.0% |
| Tennessee | 2,658,600 | 2,804,600 | 5.5% |
| Arkansas | 1,147,600 | 1,207,400 | 5.2% |
| Kentucky | 1,777,400 | 1,858,000 | 4.5% |
| West Virginia | 735,200 | 760,200 | 3.4% |
| Mississippi | 1,125,000 | 1,160,300 | 3.1% |
| Louisiana | 1,905,800 | 1,935,000 | 1.5% |
–Greg Kaza
1 National Bureau of Economic Research, http://www.nber.org/cycles/cyclesmain.html
2 BLS, Current Employment Statistics. Arkansas (June 2009)1,161,400 (October 2017)1,258,200. United States (June 2009) 131,021,000 (October 2017) 147,013,000. https://www.bls.gov/home.htm
3 BLS, CES. Arkansas (November 2001) 1,147,600 (December 2007) 1,207,400. U.S. (November 2001) 131,176,000 (December 2007) 138,413,000.
4 PA 79 of 2017 (Sponsor: Rep. Mathew W. Pitsch, R-Fort Smith)
