LITTLE ROCK, Ark. (KTHV) - Governor Mike Beebe outlined his proposed budget for 2013 on Thursday to the Arkansas Legislature.
The governor proposed increasing the public school fund by 2.5 percent, and he wants to significantly reduce the grocery tax and chip away at the looming Medicaid shortfall.
Arkansas is one of four states in the country that has a surplus, and Finance Director, Richard Weiss, attributed the success to conservative projections.
"Arkansas has a balanced budget. We balance our outlays to our income," says Weiss.
The most notable increase in this budget goes to education and Medicaid. The Public School fund increase equates to more than $49 million in additional funds.
According to Commissioner of Education, Dr. Tom Kimbrell, Arkansas is one of the only states in the country continuing to increase funding for public schools.
"This state continues to support education, $125 per student in foundation alone is not even heard of across the country right now. Only one other state is even adding new money. Most states are still cutting their educational budget," said Kimbrell.
One change that could impact most Arkansans is the possible reduction of the grocery tax. Gov. Beebe proposed reducing it from 1.5 percent to .125 percent. That would be triggered if budget obligations in several key areas decline over the next six months. Weiss said the reduction could happen soon.
"In a grouping of those things it could very easily happen next year," says Weiss.
The grocery tax reduction hinges on saving money in the next year. The requirement calls for $35 million in savings or show steady decline over six years in the areas of the desegregation settlement, payment of bonds for Arkansas Water Financing Act. The state could also close the gap if it gains money from the tourism fund.
The governor also began addressing the state's Medicaid shortfall.
"Both through ongoing general revenue and recommending the use of one time monies for the next two years, a total of 140 million dollars there to shore up Medicaid," said Weiss.
Despite the governor committing $160 million to Medicaid, state officials still estimate there will be a shortfall in the program nearing $140 million next year.