State's Chief Financial Officer says Arkansas Can't Afford More Tax Cuts

MARCH 6, 2007 - Posted at 3:26 p.m. CST

LITTLE ROCK, AR - Arkansas' chief fiscal officer told lawmakers today that the state cannot afford any more tax cuts over the next two years.

Arkansas Dept. of Finance and Administration Director Richard Weiss detailed to the Joint Budget Committee changes in Governor Beebe's budget since he first presented it to lawmakers in January.

Weiss says $40.6 million was cut from Beebe's original budget proposal to pay for additional tax cuts.  Those cuts include a proposal to raise the minimum taxable income level and a reduction the sales tax manufacturers pay on utilities.

So far this year, legislators have agreed to cut in half the state's sales tax on groceries from six percent to three percent, costing Arkansas $121 million in the next fiscal year.  Yesterday, Beebe signed an income tax reduction that will reduce state revenues by $14 million next year.

(Copyright 2007 by The Associated Press.  All Rights Reserved.)