Attention Focused on Revenue and Taxation Committee

Friday, Jan 23, 2009
Attention Focused on Revenue and Taxation Committee
January 23, 2009LITTLE ROCK - The Senate Committee on Revenue and Taxation will have an important role during the 2009 legislative session.Senate Bill 88, to reduce the state sales tax on food by a penny, has been referred to the committee. Also, any legislation to raise taxes on tobacco and liquor will be referred to the committee.SB 88 would lower the grocery tax from two and seven-eighths percent (2.875 percent) to one and seven-eighths percent (1.875 percent). The governor and some legislators have made it their goal to gradually reduce the state sales tax on groceries to the minimum amount possible.The legislature cannot completely eliminate the food tax. That is because a 1/8 of a cent sales tax on all items was approved by voters in 1996 and is now in the Constitution. Its revenue goes for conservation, state parks and heritage programs. It can be repealed only by voters in a statewide election.Lowering the food tax by a penny will reduce state revenue by about $30 million a year. The legislature will have replace that revenue, or reduce services. The governor's balanced budget proposal would use some "one time money" in the surplus to pay for ongoing services next fiscal year. His intention is to maintain critical services until the economy rebounds and state revenue increases.The governor and public health officials are also behind a proposal to raise cigarette taxes by 56 cents a pack, which would raise about $77 million a year. They also propose a change in the tax on smokeless tobacco that would generate an additional $10 million. Those new taxes will be considered by the Senate Revenue and Taxation Committee.The $87 million a year in additional revenue from tobacco taxes would pay for a variety of health care programs, including a statewide trauma system. Legislation to create and expand existing health care programs would go to other committees, like the Joint Budget Committee and the Senate Committee on Public Health, Welfare and Labor.Public education is always at the forefront of legislative issues. This year the state's school choice law will be a major focus of attention. It allows parents to transfer their children to schools outside the district in which they live, but not if the transfers would lead to segregation in the district they leave. A group of parents have filed a lawsuit in federal court, seeking to have the law struck down.Members of the Senate Education Committee are working on changes to the choice law that would allow parents to seek better schools for their children, while still preventing the re-segregation of public schools.The Senate last week approved SB 77, the animal cruelty bill, by a vote of 34-to-0. It now goes to the House of Representatives. SB 77 would make aggravated animal cruelty a felony for a first offense. The severest penalties would be for torturing dogs, cats and horses.The Senate approved SB 39 to abolish the state Board of Cosmetology, which licenses individual barbers and hair stylists, hair salons and cosmetology schools. Its functions would be assumed by the state Board of Health. After its approval SB 39 was sent to the House.