Gov. Mike Beebe this morning talked with reporters about the tax cut deal he struck with legislative leaders.
See video coverage at the Arkansas Video Blog.
Here is the official statement Beebe issued:
In a meeting this morning, Speaker Petrus and House leadership agreed to support Governor Beebe’s plan to cut the state grocery tax in half beginning July 1. Governor Beebe praised the Senate and specifically the Senate Revenue and Taxation Committee for holding firm to the plan to eliminate the state sales tax on groceries, the largest tax cut in state history. Governor Beebe and the House Leadership have worked together to reach a positive understanding to help move our state forward with substantive tax relief that includes:
--Cutting in half the grocery tax, the first step in a phase-out of the tax.
--Adjusting the state income tax brackets so that those Arkansans earning 100% of the federal poverty level will not pay state income tax. This will save low-income Arkansans about $16 million a year.
--Increasing the cut on the sales tax on utilities used by manufacturers from 1% to 1.5% in the first year of the biennium and 2% in the second year of the biennium. This will provide a savings to manufacturing employers of $15 million the first year and $20 million the second year.