House and Senate leaders say they’ve reached a deal to allow passage of $35 million in tax cuts that includes Gov. Mike Beebe’s proposal to reduce the sales tax on groceries.
The co-chairs of the Joint Budget Committee said Thursday that both chambers have agreed to reducing proposed cuts for used cars and manufacturers’ utilities to lessen the impact on the state’s coffers. The other tax cuts part of the package include an annual back-to-school sales tax holiday, an expansion of a tax credit for ecotourism and a tax cut for single parents.
Beebe earlier Thursday said he agreed principle with a tax cut agreement, but wanted adjustments to reduce the impact on the state’s budget. Originally, all of the proposals would have cost the state nearly $40 million.
Beebe has contended the grocery tax, which is estimated to cost the state $20.8 million in the coming year, is the only reduction Arkansas can afford in his proposed $4.6 billion balanced budget for the coming year. Republicans in the majority-Democrat Legislature have said they believe other cuts can be funded by paring back some of the spending increases in Beebe’s proposed budget.