Arkansas Blog: Other stuff -- BUDGET UPDATE

If you care to take a break from football, you can get into the Beebe budget by clicking on Roby Brock's Talk Business blog.

UPDATE: On the jump is Gov. Beebe's release on his budget proposal. Note a 10 percent bump for higher education.

BEEBE NEWS RELEASE

LITTLE ROCK – Governor Mike Beebe submitted his balanced budget Wednesday morning to the General Assembly’s Joint Budget Committee.
“This budget aims to move Arkansas forward and benefit all Arkansans while emphasizing new initiatives in key areas of service,” Beebe said. “By including the grocery tax cut in the balanced budget, we are building the foundation to ensure that this tax relief can survive into the future instead of using one-time surplus money for a quick fix.”
Among the highlights of the biennial budget are the following:

 $174.4 million over the next biennium for an immediate reduction in the state sales tax on food by half, from 6% to 3%.
 Increases in both teacher salaries and funding for the Arkansas Better Chance Program for pre-kindergarten children.
 Continued increases in foundation funding for education to meet the Supreme Court’s mandate.
 Establishment of a $1,000 college scholarship fund for low-income families using existing balances in the Higher Education Grants Fund.
 A ten-percent overall increase in funding for Higher Education.
 Utilizing the Medicaid Trust Fund to ensure critical medical services for elderly and low-income Arkansans.
 An increase in the Homestead Property Tax Credit from $300 to $350. The increase will be funded from the special fund that was established for the credit.
 New funds to address foster care and residential services or at-risk youth, treatment programs for disabled adolescents and a new 16-bed treatment unit at the State Hospital.
 Funding to continue the success of drug courts and substance-abuse treatment programs. This includes a new unit in Northwest Arkansas and a new Transitional Housing Program for inmates returning to open society.
 Funding to add 60 probation officers to the Department of Community Correction to ease case loads and help rehabilitation efforts.
 Opening 200 more women’s beds for the Department of Correction and phasing in the long-planned Special Needs Unit in Malvern.
 A reduction in the sales tax rate on gas and electricity consumption for manufacturers from 6% to 5%.
 Replaces the sales tax on farm fuel with a per-gallon tax to prevent dramatic cost increases for farmers in the future.

Governor Beebe’s budget proposal submitted Wednesday includes only general revenue dollars, and does not address the State’s one-time surplus money, federal funds or special revenues.

Comments

He also sets aside $2 million for debt service for a super project. What's that for?

Posted by: OneOfMany | January 17, 2007 02:05 PM

Guv. BB's recommended a 10% increase ($64 million) for higher education. Gov. Huckebee had previously recommended $109 million in FY08 (17%??) and $37 million in FY09 for higher education.

If BB is such a great friend of higher education - I guess it is a good thing he likes them so much??

Posted by: edenfivetoo | January 17, 2007 03:35 PM

That's great but is that a complete list?

Surely they are going to increase
the number of social workers
handling child abuse case
loads. Wouldn't hurt to increase
the pay too to get and retain
better social workers.

Posted by: The Bold and The Blue | January 17, 2007 05:52 PM

Tax Cuts for Seniors That Don't Help Low-Income Seniors
Tax cuts for seniors? Helping older voters on fixed incomes seems like a good idea to many legislators, but a number of states are passing tax cuts for taxpayers over age 65 regardless of whether the seniors need the help:

In Kansas, the state Senate this week debated a bill to exempt Social Security payments from state income tax, costing the state $19 million in tax revenue-- a tax benefit that will not help lower-income seniors and would give the largest benefits to the richest seniors in the highest tax brackets.
Last week in Missouri, House Speaker Rod Jetton introduced a similar plan to eliminate state income taxes on Social Security benefits, costing the state an estimated $100 million per year. Since current law already exempts individuals making less than $27,000 and couples making less than $32,000, the plan would do nothing to help the large number of lower-income seniors.
A Georgia referendum last fall eliminated the state property tax for all seniors regardless of income, costing the state $6.8 million for fiscal year 2008.
The problem with these kinds of laws is not just that they help richer seniors while offering little or no help to the poorest seniors who need the most help. They also ignore demographic realities. As the Georgia Budget and Policy Institute wrote in an analysis of the Georgia law, "the population over 65 will continue to grow...As this population grows, the revenue loss associated with senior citizen tax exemptions will also increase...While certain tax exemptions and preferences are justified, the state should aim to base all exemptions on income, rather than age alone."

Instead of these untargeted senior tax cuts, other states have enacted reforms that provide tax relief for the seniors who need the help most. As we detailed last July, a number of states use "Circuit Breakers" to limit property taxes to a percentage of income, a reform that targets help to lower-income seniors. Other alternative reforms are programs that defer payment of property taxes by seniors until property is sold or "homestead exemptions" that exempt part of a home's value from taxes.

So instead of nice sounding tax cuts for seniors, lawmakers should make sure reforms actually give tax relief to the lower-income seniors on fixed income who need the help most.

http://www.progressivestates.org/content/318/07102006-winning-on-property-taxes-the-montana-model-for-progressives#8

Posted by: RLR | January 18, 2007 11:31 PM

Arkansas Blog

Other stuff -- BUDGET UPDATE

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