Arkansas Governor Calls for Doing Away with Grocery Tax
By: KARK 4 News
Updated: November 15, 2012
Governor Mike Beebe is recommending that Arkansas do away with its so-called grocery tax.
The recommendation came in meetings at the State Capitol this morning on the 2013-2015 budget.
Beebe's budget seeks to repeal the remaining state sales tax on food except for the 1/8 cent tax levied by voters in Amendment 75 of the Arkansas Constitution. That would reduce the tax from 1.5-percent to 1/8-percent.
The elimination of the grocery tax would depend on a formula determined by changes in state budget obligations. More specifically, it would tie into the mandate that certain deductions must be made from net general revenue before funds are distributed to state agencies. When those deductions fall to below $35-million for a six-month period, it would trigger the reduction in the sales tax on food.
The governor's budget also calls for a two-percent Cost of Living Adjustment for each state agency for fiscal year 2014, with a determination yet to come on fiscal year 2015.
The proposal shows available revenue at more than $4.9-billion and a budget of more than $4.7-billion.
An amount for rainy day funds is set at $10-million.
The budget also shows $70 million per year for Medicaid to be funded from the General Improvement Fund.
The Governor's proposed balanced budget calls for a 4.4% increase in spending for Fiscal Year 2013. It calls for a 3.7% increase in spending for Fiscal Year 2014.
The recommendation came in meetings at the State Capitol this morning on the 2013-2015 budget.
Beebe's budget seeks to repeal the remaining state sales tax on food except for the 1/8 cent tax levied by voters in Amendment 75 of the Arkansas Constitution. That would reduce the tax from 1.5-percent to 1/8-percent.
The elimination of the grocery tax would depend on a formula determined by changes in state budget obligations. More specifically, it would tie into the mandate that certain deductions must be made from net general revenue before funds are distributed to state agencies. When those deductions fall to below $35-million for a six-month period, it would trigger the reduction in the sales tax on food.
The governor's budget also calls for a two-percent Cost of Living Adjustment for each state agency for fiscal year 2014, with a determination yet to come on fiscal year 2015.
The proposal shows available revenue at more than $4.9-billion and a budget of more than $4.7-billion.
An amount for rainy day funds is set at $10-million.
The budget also shows $70 million per year for Medicaid to be funded from the General Improvement Fund.
The Governor's proposed balanced budget calls for a 4.4% increase in spending for Fiscal Year 2013. It calls for a 3.7% increase in spending for Fiscal Year 2014.
