Governor Mike Beebe is calling for a 1-cent cut in the state's sales tax on groceries in a balanced budget proposal that leaves out nearly $146 million in funding for Medicaid programs, prisons and other state services.
 
The governor said yesterday he wants to use part of a projected $300 million surplus as a "rainy day fund" to help pay for the projects that were not funded by his proposed $4.4 billion budget for the upcoming fiscal year. Beebe also said the "unfunded appropriations" listed in his budget could be funded if revenues next year come in higher than expected.
 
Beebe released the proposed budget and forecast for the next two years as lawmakers prepare for the legislative session that begins in January. The forecast predicted that net available revenues will reach $4.5 billion in the next fiscal year, an increase of $89.3 million. For the following fiscal year, the state predicted revenues would reach nearly $4.7 billion, an increase of $178 million.