Issue 3 for November 2026
- What Issue 3 actually does. It's a legislatively referred constitutional amendment (Senate Joint Resolution 15) letting cities and counties create "economic development districts." Arkansas and Arizona are currently the only two states that don't let local governments do this. Inside a district, a city could:
- Abate property or sales taxes above their current baseline for a set period
- Use the new tax revenue a development generates (the "increment") to reimburse a developer's infrastructure costs — roads, water, sewer
- Issue bonds against that future incremental revenue
- Rebate a share of new sales tax collections to a business that made a big upfront capital investment, to help it recoup costs
It's essentially a tax-increment-financing (TIF) model, new to Arkansas. Backers point to Mountain Home losing a $15 million retail project — one that would've generated $17 million a year in tax revenue — to West Plains, Missouri, because Arkansas had no way to help reimburse the developer's infrastructure costs. Supporters frame it explicitly as local control: "these projects will be customized to the wants and needs of each community and decided upon locally," per SJR15 proponents, with no state mandate involved and — proponents stress — no tax increase required to use it.
- Issue 3 DOES NOT raise taxes; DOES NOT impact existing revenues in Sherwood.
- Issue 3 GIVES LOCAL CONTROL to Sherwood to make our own decisions about incentivizing development we need.
- Gives leaders the tools to put in their economic development tool bag. 48 states currently use these tools today!
- Issue 3 levels the playing field with all of the surrounding states.
- These tools ARE NOT ONE-SIZE-FITS-ALL by design. Different tools may be leveraged in different areas to help meet a community's specific goals, whether it's revitalization, housing, food insecurity, or infrastructure needs.
Where the Sherwood-specific opportunity is. The mechanism captures growth above the historical baseline, and that baseline can be property tax as well as sales tax. That matters for a city like Sherwood, which already leans on millage and has been wary of asking voters for more sales tax capacity:
- Sherwood wouldn't need a new tax vote to use this. It could designate a district around underused commercial land, and finance the water/sewer/road work needed to make it shovel-ready by bonding against the future property or sales tax growth that new development there would generate — revenue that doesn't exist yet, so nothing is taken from the current general fund or the Street Fund's existing millage.
- Because abatement/rebate authority under Issue 3 covers both sales and property tax increments, Sherwood could specifically use captured property-tax growth from a new development to offset infrastructure costs, rather than being limited to sales-tax rebates the way a city with no millage reliance might default to.
- It gives the city a tool to compete for the kind of project (a grocery store, a retail development competing with North Little Rock or Jacksonville just up the road) without going back to voters for a millage or sales tax increase the way it's had to for police funding or parks bonds recently.
There is not a "Vote No on Issue 3" campaign for the 2026 measure specifically, and it is communicated how currently Arkansas and Arizona are the only two states not allowing this at the local levels.
What are your thoughts?
Sherwood Seeks Own School District
The Sherwood Education Foundation released their Feasibility Study and they are prepared to move forward with the tasks associated with requesting an exit from the Pulaski County Special School District and the subsequent creation of the new Sherwood School District. We sent members of the Chamber a copy of this study. The Board of Directors have passed a motion to seek feedback from our members concerning the study and the Chamber is interested to collect data from our members on their perceptions and understandings in order to provide feedback to the Sherwood Education Foundation as it pertains to our business community. This request is not to be for or against anything, but an effort to ensure our membership is kept informed and provided opportunities to be heard and advocated for. We truly appreciate your time, and remind you that your participation is truly voluntary. We do not seek to identify you, we seek to use information. Please limit your responses to those concerning your business.
Data Centers & Our Community
Data centers continue to be an important topic of public discussion in Pulaski County. Here is a straightforward update on where the process currently stands—including what these projects could mean for local schools.
On August 25, the Pulaski County Quorum Court placed Ordinance 26-I-56A on its first reading. The proposal would establish regulations for large-scale data centers—officially described as “high-intensity digital infrastructure”—in the unincorporated areas of Pulaski County.
The proposed regulations include:
• A conditional-use permit and public review process
• Review of potential effects on electricity, water, wastewater, roads, drainage and emergency services
• Noise and residential setback standards
• Application, inspection and monitoring costs
• Financial safeguards and plans for decommissioning a facility
The ordinance has not received final approval. Because it was placed on first reading, it must continue through the Quorum Court’s legislative process before becoming county law.
A separate proposal for a temporary 90-day moratorium was withdrawn at the August 25 meeting. An earlier attempt to establish a yearlong moratorium in May did not take effect after the final vote was found to be short of the number required for passage.
What could this mean for PCSSD?
The proposed AVAIO Digital project near Wrightsville is within the Pulaski County Special School District’s taxing area. Public statements associated with the project have estimated that it could eventually generate approximately $4 million to $5 million per year in new millage revenue for PCSSD, even if industrial-development revenue bonds are used.
Another estimate presented during the county discussion suggested that a single $1 billion data center building could generate approximately $2.8 million annually for PCSSD. These figures illustrate why school funding has become an important part of the conversation.
For context, PCSSD reports annual revenue of approximately $172.3 million, including roughly $132.6 million from taxes. An additional $4 million to $5 million would therefore represent a meaningful new local revenue source for the district.
However, these remain projections—not guaranteed receipts. The amount PCSSD ultimately receives would depend on:
• The project’s final size and completed investment
• The taxable value assigned to the land, buildings and equipment
• Construction and operating timelines
• Depreciation of taxable equipment
• Any tax incentives, bond arrangements or payments in lieu of taxes
• The applicable millage rates and Arkansas school-funding rules
The broader community discussion includes water and electricity use, utility costs, noise, environmental effects, transparency, permanent employment and the reliability of projected tax revenue. Supporters also point to construction activity, capital investment, expanded tax bases and opportunities for technology-related economic development.
The conversation is not over, and no final countywide regulatory decision has been made. We encourage residents and businesses to examine both the potential benefits and the potential costs, follow upcoming public meetings and participate respectfully in the process.
The next regular Pulaski County Quorum Court meeting is scheduled for September 22, 2026. Meeting information and official updates are available through Pulaski County.
*Parts of this report were extracted from the news using Chat GPT which relied heavily on a data center. The Google Data Center for Little Rock is next.