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Grocery-tax cut in Beebe's budget proposal

By ANDREW DeMILLO The Associated Press

This article was originally published November 15, 2012 at 9:33 a.m. Updated November 15, 2012 at 10:14 a.m.

— Gov. Mike Beebe is proposing a reduction in the state’s grocery tax that would be triggered if the state’s budget obligations in several key areas decline over a six-month period.

Finance officials on Thursday said Beebe is calling for reducing the state’s grocery tax from 1.5 percent to 1/8th percent. The cut would eliminate all but a portion of the sales tax that was approved by voters as part of a constitutional amendment.

The tax cut would be triggered if deductions in several key areas decline by at least $35 million for six consecutive months. The deductions include the state’s desegregation obligations and payments for certain bonds.

The tax cut was part of a $4.9 billion general revenue budget proposal for next year that Beebe’s administration detailed to lawmakers.

Beebe’s budget proposal calls for increasing state spending by $180 million. The state Department of Human Services, which manages the state’s Medicaid program, would get the largest share of the budget increase, with Beebe proposing $98 million in additional funding for the agency.

Human Services has detailed a series of cuts it will have to make in the state’s Medicaid program, including removing thousands of seniors from nursing home care, to plug a $138 million shortfall the program faces even with the additional money.

Beebe proposed increasing money for public schools by $49 million. The governor also called for setting aside $10 million for a “rainy day fund” that the state can tap in financial emergencies.

Read tomorrow's Arkansas Democrat-Gazette for full details.

Comments on: Grocery-tax cut in Beebe's budget proposal

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Displaying 1 - 4 of 4 total comments

NONSHEEPLE says... November 15, 2012 at 9:56 a.m.

That vote BETTER be NO....

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RBBrittain says... November 15, 2012 at 2:07 p.m.

"No" to cutting grocery taxes yet again? How stupid, NONSHEEPLE. Why don't you come out and say what your REAL problem is with Beebe's grocery-tax cuts? Perhaps it's because he's one of the few politicians today who not only DID what he promised, but ended up doing MORE? Maybe you're still ticked that he was one of the few Democratic governors to survive the 2010 election unscathed?
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When he first ran for governor in 2006, Beebe only promised to get rid of HALF the 6% state sales tax on groceries; he got that in his first legislative session. He's since built on that to 3/4ths of the state grocery tax; if this works that will go to nearly 98% (47/48ths to be exact). If your numbers are different, that's because (a) you're defining "groceries" (more properly "food and food ingredients") differently than the Streamlined Sales Tax Agreement, like the guy who complained about dog insulin the other day, and/or (b) you're counting local tax; but Beebe's using the SSTA definition (avoiding arguments raised when prior proposals used the food-stamp definition) and excluding local taxes (which would have endangered many smaller cities & counties) were THE two political twists that allowed Beebe to do it where others failed.

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LevyRat says... November 15, 2012 at 2:31 p.m.

Beebe is to be congratulated. Sales tax on food is criminal, it is nearly as bad as sales tax on our utilities.

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SPA says... November 15, 2012 at 2:50 p.m.

Please do not tax food, or water either, for that matter.

We cannot escape taxes. So, please do tax jewelry, furs, alcohol, gambling...any and all things are not a requirement for life. Luxuries are fair game for taxes; necessities are not.

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