Issue 3 Explained: What Economic Development Districts Would Do to Property Taxes
Arkansas voters decide Nov. 3. The amendment creates no district itself, and the tax effect depends on laws not yet written.
Issue 3 does not create a single district. It changes the constitution so the Legislature can authorize them. Property inside a district would be exempt from property taxes levied by schools, counties and cities, and the district itself could tax it, per the Extension fact sheet.
Voters decide Nov. 3. If it passes, it takes effect Jan. 1, 2027, and the details wait on laws not yet written.
Issue 3 is a proposed amendment to the Arkansas Constitution on the November 3, 2026 ballot. The General Assembly referred it through SJR 15 in April 2025, per the University of Arkansas Division of Agriculture fact sheet. It would let the Legislature authorize cities, counties and cooperative areas to create economic development districts.
Districts could issue bonds and levy taxes, assessments or other charges, and their debt would be exempt from certain city and county debt limits. If voters approve, it takes effect January 1, 2027, and lawmakers would still need to pass laws setting how districts form and run.
What are the facts?
| Question | Answer in the sources |
|---|---|
| Who referred it? | The General Assembly, through SJR 15 (sponsors: Sen. Jonathan Dismang and Rep. Howard Beaty) |
| What does it authorize? | State programs, loans and grants for economic development, and districts created by cities, counties and cooperative areas |
| How does it pass? | A majority of voters statewide |
| When does it take effect? | January 1, 2027, with implementing laws still to be written |
| Bonds repaid by property taxes | Bonds issued by a city, county or other subdivision for these programs and repaid with property taxes would still need voter approval |
| What does it override? | Conflicting constitutional provisions and court rulings |
What does it mean for land?
The Extension fact sheet says property inside a district would be exempt from property taxes levied by school districts, counties, cities and other taxing entities, and that the district itself could tax that property through taxes, assessments or charges. It lists vacant land, agricultural, residential, commercial and industrial real estate among the covered property.
The Arkansas Senate's summary describes districts that could freeze property taxes at current rates for a set period, such as 10 years, which it says would keep school revenue stable. It also says districts could freeze local sales taxes and issue bonds repaid from district revenue.
The two descriptions are not worded the same. Both summarize the same referral, and the text of SJR 15 controls.
What are the arguments?
Supporters argue the amendment lets communities invest in development without raising taxes. Opponents argue it shifts the cost of schools, roads and law enforcement onto property outside the districts. The Senate summary adds that voters approved a similar plan in 2000 as Amendment 78, and that a Supreme Court challenge repealed several of its provisions.
What is still unknown?
No source names a district that would form, a location, a tax rate or a duration. None names a Northwest Arkansas project. The Extension fact sheet calls the measure Issue 3. The Senate summary did not give an issue number.
What is our read?
The amendment creates no district itself. Any effect on a landowner's tax bill depends on laws that have not been written. Nothing takes effect before January 1, 2027.
Watch three things: the November 3 result, the implementing bills in the January 2027 session, and the first district proposals on city and county agendas.
What should landowners do now?
Read the ballot text and the Extension fact sheet before voting. After the election, ask the county assessor and city or county clerk whether any district is proposed that would include a given parcel.
Frequently asked questions
When is the vote? November 3, 2026.
Does Issue 3 create districts right away? No. It lets the Legislature authorize them, and implementing laws would come first.
What would change for property inside a district? The Extension fact sheet says other taxing entities could not tax it and the district could. The Senate summary describes a freeze at current rates. Check the amendment text.
The bottom line
Voters will decide a constitutional change that moves property taxes inside future districts to the district, and the details wait on laws not yet written.
The November 3 result is the date to watch.
Looking for land in Northwest Arkansas? Browse land and acreage listings.
References
- University of Arkansas Division of Agriculture, "Issue 3 Arkansas Ballot Issue Fact Sheet"
Cited for: the referral, the powers, the effective date, the property tax treatment and both sides' arguments - Arkansas Senate, "Legislature Places Three Proposed Amendments on 2026 Ballots"
Cited for: the tax freeze description, the sales tax and bond language, and the Amendment 78 history
