Gov. Sarah Huckabee Sanders said Tuesday she would like to use the state's $1.161 billion surplus on education and tax cuts, but did not say whether she would call the Legislature into a special session to do so.
Speaking to members of the Rotary Club of Little Rock at the Clinton Presidential Center, the Republican governor was asked about how the state should use the budget surplus.
"I want to continue to invest in education because I know it's one of the biggest difference makers," Sanders said. "One of the other things that I mentioned earlier that I want to continue to do is responsibly phase out the state income tax."
Sanders told reporters after the event she was not ready to commit to calling a special session to bring lawmakers back to the state Capitol to pass a tax cut, saying she may wait until next year when the General Assembly is scheduled to meet for the fiscal session in April.
"We'll work with our partners and friends in the Legislature to make that determination on whether we do something sooner or do something during the fiscal session," she said.
Both of the Legislature's top leaders, House Speaker Matthew Shepherd, R-El Dorado, and Senate President Pro-tempore Bart Hester, R-Cave Springs, said there has not been any recent discussion with the governor about the prospects of a special session.
"We want to continue to provide those savings to Arkansans and continue to find ways to cut taxes," Shepherd said.
Hester said it's most likely the next tax cut will come during the fiscal session.
"[The] plan could change," Hester said. "As of right now that is still the plan and there [has been] zero, no discussion."
Earlier this month, state finance officials announced the state had a $1.16 billion surplus for fiscal year 2023, which ended June 30.
The 2023 budget surplus was the second-largest general revenue surplus in any fiscal year -- which extends from July 1 to June 30 -- behind only the $1.63 billion surplus from fiscal year 2022.
After the 2022 budget surplus, then-Gov. Asa Hutchinson called lawmakers back to Little Rock for a special session to accelerate a tax cut the Legislature passed in 2021, which reduced individual income taxes from 5.5% to 4.9% and the corporate income tax from 5.9% to 5.3%.
"That was on the back end of Gov. Hutchinson's term," Shepherd said. "Here we are on the front end of Gov. Sanders' term."
Shepherd said it is difficult to compare this year's budget surplus to the one from last year that prompted Hutchinson to call the special session because the two governors are in different points in their respective tenures.
After 30 minutes of answering questions from moderator Chris Bahn, publisher of Arkansas Business Publishing Group, Sanders took questions from members of the Rotary Club.
One member of the Rotary Club asked the governor what the state income tax would be in her "perfect world."
"I mean in a perfect world, I'd like to see [the state income tax] at zero," Sanders said. "I mean, I think you have to be careful because the economy and the environment can shift. And that's why we have to do it over time and we can't just immediately take it to zero."