Arkansas Governor Seeks to Reduce Sales Tax on Groceries
- Jan 16, 2013 | Gail Cole
Last fall, Arkansas Governor Mike Beebe (D) included a reduction in the state sales tax on groceries in his proposed budget. In his State of the State Address yesterday, the governor renewed his commitment to reduce that tax. That said, he does not think now is the right time to reduce it.
To quote the governor:
"When I was sworn in as governor in 2007, I promised to attack the onerous state sales tax on groceries. With the help of three previous legislatures, the grocery tax has incrementally fallen from six percent to one-and-a-half percent. … I could propose a bill to remove the rest of this tax from our books, save the one-eighth cent put on by the voters through the Constitution. However, while building the budget, it became clear that I could not make such a proposal in good conscience. With the challenges we face, I don't see room to cut this tax at this time without endangering needed services. But I still want to plan for it."
The governor explained that money will become available for a further cut in the grocery tax, but he did not know when. The bulk of the funds will come from the cessation of the state's ongoing payments to the Pulaski County school districts, pursuant to the desegregation ruling of the 1980s.
His solution follows:
"I propose that we pass legislation to make grocery-tax relief the first call on this money, when it becomes available."