State Budget Changes: Beebe Covers His Flank

"Governor, if your office knew that there would be a projected shortfall in the General Revenues in 2009 then why did you just last week rush through a special session in which you insisted that 95% of the money from the tax increase would be diverted to roads? If there is a shortage, doesn't that decision endanger Medicaid spending, for the children?"
by Mark Moore, Arkansas Watch: Governor Mike Beebe , with the help of a cooperative state print media, completely dominated the legislature and got everything he wanted in the Special Session. The state's severance tax for natural gas will be greatly increased, and all of the money will be kept by the government, mostly to spend on roads. Beebe elected not to use any of the funds for a tax cut. None of the bonanza will be shared with the taxpayers.

While he was winning that immediate battle, the decision to keep all of the money in Little Rock certainly raised some questions. Questions like, "why wasn't the severance tax money used for a major tax cut? The state treasury is overflowing while families are hurting. What good are new roads when we can't afford the gas to drive on the roads we've got?"

Those were difficult questions to answer. The state is currently sitting on a $140 million dollar surplus; the natural gas finds are certain to boost tax revenues even without a tax rate increase; and the Governor had made a commitment to eliminate the other half of the sales tax on groceries. With families hurting far worse than state government, why the urgency for a special session to raise taxes even further? It appears Beebe and his friends in the corporate media have gone into spin-overdrive to protect his flank on this one. . . . [Read More]

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