Favorite

A penny saved 

I do the weekly grocery shopping. Sunday, I spent $109.

With the occasional splurges for holidays and such, I probably spend about $6,500 to $7,500 a year at Kroger.

The tab isn't all for groceries, of course. Light bulbs, dog food, rat poison, batteries, soap and other items run up the bill without incurring a 3 percent charge from the state's remaining sales tax on groceries.

Last Sunday, though, the basket was filled almost entirely with taxable goods. Three months from now, if Gov. Mike Beebe has his way, that same cart would cost about $1 less.

Beebe wants to cut a penny off the sales tax on groceries. He would like to remove the levy entirely, but he says a further penny reduction is all the budget can bear this year, given falling state revenues and the prospect that the economy will get worse before they get better. He opened his governorship with a three-cent reduction in 2007.

Beebe will be on the ballot in 2010. That penny reduction would put another gold star on his political resume. But is it a sound decision from a politician who's been nothing but cautious in his long career? Moreover, does it have the voter resonance that Beebe seems to believe?

Arkansas voters famously rejected abolition of the grocery sales tax in 2002. They are not selfish people. They understood that you can't cut taxes without making sacrifices. The 2002 repeal, which included over-the-counter medicines, would have taken $400 million out of the state cash flow, a painful loss to schools, prisons and health care.

But, Beebe would argue, a one-cent grocery tax cut is something else. Its cost is an estimated $30 million annually. That's chump change in a $4.4 billion annual budget.

It's certainly chump change at the grocery store. I don't think I had a single item in my basket Sunday that I could have purchased with $1, and thus gotten free, with my savings from Beebe's tax reduction. A sack of honey crisp apples (eating healthy, see) was a whopping $9 before the store coupon. White rice costs more than $1 a pound.

The minimal benefit is one reason for wonder about the political dividend of a tiny tax cut.

The primary objection, however, lies in Beebe's plan for meeting expected shortfalls in Medicaid, the federal program for the poor. He'll rely on an accumulated surplus this year. When the surplus money is gone, well, he hopes revenues will have picked up sufficiently to continue services to the needy, many of them elderly. Pushed aside are ideas to expand the health insurance coverage of working poor families with Medicaid.

That $30 million would do a great deal if applied to Medicaid, which provides federal money in a 3-1 match. With $120 million annually, the state could cover year-around nursing home care for some 2,500 elderly. It could provide tens of thousands of people with health care coverage. It's no small thing. And it's a reduction that Mike Beebe would impose forever.

Arkansas's regressive tax on groceries has, odd as it seems, never caused much popular discontent. Many see a perverse fairness in it, as they do with flat income tax schemes. Everybody pays the same (regardless of ability to pay). More perverse still, though, is putting a lifeline for the needy at long-term risk in favor of short-term political gain.

 

Favorite

Sign up for the Daily Update email

Comments

Subscribe to this thread:

Add a comment

More by Max Brantley

  • Judge Griffen files appeal of case dismissal

    Judge Wendell Griffen has filed his request for the entire 8th U.S. Circuit Court of Appeals to hear his appeal of a 2-1 decision dismissing his lawsuit that his constitutional rights had been violated by the Arkansas Supreme Court in removing him from all death penalty cases.
    • Jul 16, 2018
  • The billionaires and their charter schools: Point/counterpoint

    A convergence of coverage today on charter schools, the play toys of the Billionaire Boys Club and a growing threat, particularly in Little Rock, to community public schools.
    • Jul 16, 2018
  • We have met the enemy: The open line

    The open line with a dose of Trump and other unhappy news.
    • Jul 15, 2018
  • More »

Readers also liked…

  • Double-talk

    A couple of instances of doublespeak cropped up in Little Rock over the weekend.
    • Jun 29, 2017
  • Along the civil rights trail

    A convergence of events in recent days signaled again how far we have come and how far we have yet to go in civil rights.
    • Jan 18, 2018
  • The Oval outhouse

    One thing all Americans finally can agree upon is that public discourse has coarsened irretrievably in the era of Donald Trump and largely at his instance.
    • Jan 18, 2018

Latest in Max Brantley

  • Let's vote

    The potential for exciting November elections grew last week with filing of petitions for three ballot initiatives to add to two already cleared by the legislature.
    • Jul 12, 2018
  • Corrupt Arkansas

    Arkansas jail blotters last week added a couple more names of so-called public servants.

    • Jul 5, 2018
  • Who's coming for dinner?

    Thousands of children, stripped from their families at the border, remain hostage to a U.S. government using them to coerce illegal-entry guilty pleas from their parents. The U.S. wants to make criminals of many seeking legal asylum.
    • Jun 28, 2018
  • More »

Most Recent Comments

  • Re: Let's vote

    • And while we're at it lets get a vouchers for private schools initiative on the…

    • on July 14, 2018
  • Re: Punishing the poor

    • Then maybe the congress will give up on the unsustainable socialized medical insurance fiasco that…

    • on July 14, 2018
 

© 2018 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation