Budget Solutions Top Agenda for Assembly

May 5, 2003
Posted at: 2:56 p.m. CDT

LITTLE ROCK, Ark. -- As legislators convene this morning for a special session to create a state budget, state agency budgets and higher taxes are at the top of the agenda.

Lawmakers are faced with how to generate enough revenue to cover a $250 million shortfall in the budget for each of the next two years.

This morning, supporters of a tobacco sales tax gathered to rally in support of a levy they say would pump $90 million into state coffers and help keep children from smoking.

The tax would either be 16 percent at the wholesale level or 15 percent at the retail level.

Tobacco lobbyists, meanwhile, maneuvered to minimize the increases on an industry that increasingly appeared to be the main target for higher taxes.

They plan to present an alternative to the House Rules committee today that would offer a 30-cent per pack increase on wholesale cigarettes and five percent wholesale tax on all other tobacco products.

Today, Representative Bill Stovall of Quitman said he planned to introduce a bill that would combine a lower tobacco tax increase and a small surcharge on income tax. He said it would generate $90 million.

Last week, Governor Huckabee floated the possibility of a one cent sales tax. One-fourth would be applied to the budget shortfall and the rest held in escrow to go toward court-ordered education reforms to be tackled in the fall.

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