Two of Arkansas’ top elected officials say they don't expect any changes to the sales tax exemptions for ag input purchases by the state's farmers.

Gov. Mike Beebe, a Democrat, and House Speaker-elect Davy Carter, a Republican, told members of the Agricultural Council of Arkansas they would not support legislation that would eliminate the sales tax exemption.

With state government budgets under pressure everywhere, producers have been concerned that the favorable tax treatment they’ve enjoyed on ag purchases might come under attack when the legislatures in Arkansas and other states convene.

“We are not going to change exemptions to the agricultural sales tax,” Beebe said in answer to a question about cutting the state sales tax following his keynote address to Agricultural Council members at their annual meeting in Little Rock. “I’ve stated my position on that, and it’s not going anywhere as long as I’m governor.”

Understands agriculture

Earlier, Carter, a lawyer and banker from Cabot, indicated he, too, would not support any measure that would eliminate sales tax exemptions that are currently in place for agriculture.

A native of Marianna whose family still farms in Lee County, Carter said he understands what it means to be in agriculture and the importance of agriculture to the Arkansas economy. “It’s one of the few reasons we’ve been able to keep our fiscal house in order.”

Responding to a question from the audience, the lawmaker said farmers shouldn’t worry about the loss of the sales tax exemptions. “That is something that is not going to happen. There’s no coordinated effort to do away with these. These exemptions are fairly easy targets, but what we find when we look at them is there’s a reason why we have them.”

The governor and the speaker said Medicaid is likely to be an issue in the 2013 session of the Legislature. Beebe spent much of his time explaining why he thinks the Legislature should agree that Arkansas will participate in the expansion of the Medicaid program from children and the elderly to take in Arkansas residents who are below 133 percent of poverty on income.

“Expanding Medicaid will not cost Arkansas anything in the first three years of the program,” said Beebe. “But if we elect not to participate the federal tax dollars Arkansas residents pay to support Medicaid will go to other states that do elect to participate.”

Opt out optional

Both Beebe and Carter agreed that Arkansas could elect to begin the program and opt out in future years if the Legislature decides it’s not in the best interests of the state to continue. But Carter said he was not ready to commit to supporting Medicaid expansion until the Legislature has more answers about the issue.

“I think we all have questions because of the numbers involved,” he said, citing the fact that some 800,000 residents are now enrolled in Medicaid at an average cost of $5,900 per resident. Expanding Medicaid under the new Affordable Care Act would raise the number of Arkansans covered under the program to about 1.3 million.

“All of us should have questions about the federal dollars that are being spent on Medicaid and whether we can afford to continue such programs,” Carter said.

Beebe and Carter were two of a series of speakers who gave updates on issues ranging from Arkansas’ Boll Weevil Eradication Program to the outlook for the weather in Arkansas and the remainder of the country in the weeks ahead.

Gary Adams, vice president for economics and farm policy with the National Cotton Council, and Andrew Grobmyer, executive vice president of the Agricultural Council of Arkansas, discussed the latest developments on the new farm bill, which was given a nine-month extension in the final hours of the 212th Congress.

STAX Program

If Congress had been able to agree on a new farm bill, both the Senate and House versions contained similar language establishing the Stacked Income Protection Program or STAX that the National Cotton Council had been promoting for more than a year in Washington.

“Whatever happens, we are hopeful that a program will be in place in time for the 2013 planting season,” said Adams. “That program could include a reduced direct payment.”

On the boll weevil eradication front, Regina Coleman, the executive director of the ABWEP, said program assessments would be set at $8 per acre in 2013 and the Boll Weevil Eradication Foundation was making progress on reducing the organization’s debts.

The Ag Council of Arkansas also re-elected Herrick Norcross of Tyronza as president; Rick Bransford of Lonoke, first vice president; and Stewart Weaver, Edmondson; Ryan Carwell, Jonesboro; Jed Anderson, Marianna; and Jeff Rutledge, Newport, as members of the executive board. Cal McCastlain, a producer from Monroe County, was elected treasurer.