(Little Rock) (AP) – 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% 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.