Governor Mike Beebe has asked all state agencies to prepare budgets for the next two-year cycle that cut their spending by 7%. It's a move officials say could buffer against a sagging economy or provide money to further cut Arkansas' grocery tax.

Beebe's request also asked agencies funded by the state's general revenues to prepare a budget that assumed no new money would be available, and another one planning for moderate increases.

The excess money may also give Beebe ammunition if he pushes for another cut in the state's sales tax on groceries, which was cut in half by the Legislature last year.

Matt DeCample, a spokesman for Beebe, says economic worries spurred the tougher look at budgeting for the next two years, not a plan to cut taxes.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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