Gov. Mike Beebe on His Fiscal Forecast for '15, What He'll Say to His Successor

by Arkansas Business Staff  on Monday, Dec. 23, 2013 12:00 am  

Gov. Mike Beebe (Photo by Russ Powell)

Mike Beebe was elected governor in 2006 after having served 20 years in the state Senate and a four-year term as state attorney general. Beebe won re-election to his second, and final, term in 2010. During his administration he has focused on education, economic development and tax reform.

Beebe, born in Amagon (Jackson County) in 1946, earned a bachelor’s degree in political science from Arkansas State University in Jonesboro in 1968. He completed law school at the University of Arkansas in 1972, while serving in the U.S. Army Reserve. He and his wife, Ginger, have three adult children.

Gov. Mike Beebe currently serves at the chairman of the Southern Governors’ Association.

There have been some indications that the state Legislature might not reauthorize the use of federal money to buy private health insurance for poor Arkansans, the “private option.” What will you do if that happens?

The passage of the private option was a tight vote, as was expected with the three-fourths supermajorities required in both houses of the General Assembly. To this point, we haven’t heard of any specific individuals planning to withdraw their support in February. Arkansas’ private option has become a model other states are examining and pursuing to potentially insure more of their lower-income citizens without using the traditional Medicaid model.

If the private option is not reauthorized, there are two significant consequences. First, you will be taking health insurance away from what will, by then, likely be in excess of 100,000 Arkansans, just six months after they have begun to receive it. It will also leave a sizable hole in the state budget, as savings in general revenue generated by the influx of federal funds have already been dedicated to pay for tax cuts in fiscal year 2015.

You have overseen the elimination of most of the grocery sales tax in Arkansas. Do you plan to ask legislators to further cut it or to completely eliminate the tax?

The General Assembly passed a bill this year that will eliminate as much of the sales tax on groceries as is allowed without a vote of the people. Under this new law, whenever the state is no longer making payments related to the school desegregation settlement, the first call on that money will be further reducing the sales tax on groceries. We’ve already reduced it from 6 percent to 1.5 percent. There is one-eighth of a percent that was enacted as a conservation tax by the voters that will still remain after the grocery tax is reduced further.

What’s your revenue and tax collection forecast for fiscal 2015?

Our forecast remains conservative but does include slow growth in the next fiscal year. I always instruct our Department of Finance & Administration to be conservative in its calculations, because you never know what financial circumstances will arise. As a case in point, we’ve recently made a small downward adjustment to our forecast for the current fiscal year as a result of the fallout from the federal government’s most recent shutdown.

How close are you to finalizing your fiscal 2015 budget and what can you reveal about it?

I am close to finalizing my proposed budget but am not ready to discuss specifics. It will include a continued increase in funding for public education, and additional money for our Department of Correction as we continue to adjust our parole system and keep more parole violators behind bars. The DF&A will present the budget to the General Assembly in January.



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