Things were starting to go sour for Arkansas Governor Mike Beebe. Earlier this year, both chambers of the state legislature quickly passed a new 3-cent tax on milk and dairy products to prop up the state's beleaguered farmers. This move ran directly counter to one of Beebe's signal accomplishments: a two-thirds reduction in grocery taxes since he took office in 2007. "It was a little inconsistent," he said.

Not just inconsistent but highly unpopular. Over the course of just a few days, the owner of a small chain of Arkansas pizza parlors had gotten more than 700 of his customers to call Beebe's office and complain about the new tax. Because the plan already had passed the legislature, bigger milk purchasers also targeted the governor directly, running a full-page color ad in the Arkansas Democrat-Gazette that featured a little girl in pigtails pleading with Beebe not to tax her milk money.

Beebe was in a box. He knew that vetoing the milk tax would mean little, because its sponsors had more than enough votes to override him. Instead, he scrubbed the budget and found several million dollars sitting in an obscure agriculture biodiesel fund that could, without too much sleight of hand, be shifted over to help the dairy farmers. Just like that, Beebe's problem was solved. With the money in hand, the new milk tax was withdrawn.

The governor calls that "kind of a lucky brainstorm." But in a way, it was vintage Beebe, taking advantage of his extensive knowledge of state government, based on 20 years in the state Senate and four years as attorney general, to solve a political problem. "He's a master at getting what he wants," says Steve Harrelson, the state House majority leader, "and we're willing to let him get what he wants--as long as we get some funding for the projects we want."

Beebe has indeed used his acumen not just to deal with inconveniences like the milk tax but to obtain from the legislature just about everything he has asked for. At a time when most governors are floundering due to budget deficits, and some are under fire due to personal scandals, Arkansas has a governor who is widely admired and very much in command.

Not many people outside the state have heard of Mike Beebe, but those who watch closely are saying he may be the best governor in America right now. Dale Bumpers, who ran the same state successfully in the 1970s, is willing to go further: "I think that he could wind up being considered the best governor Arkansas ever had." This may sound like an exercise in political puffery--that is, until you stop and consider what Mike Beebe has actually accomplished in two and a half years.

His initial reduction in the grocery tax--something state lawmakers had talked about doing for 40 years, but never got around to--amounted to the largest tax cut in state history. This year, he followed up by cutting the food tax further, while giving an energy tax break to manufacturers, and still left the state with a $300 million surplus. On the other hand, he has raised other taxes, despite the burden of a three-quarters supermajority requirement for passage in the legislature. One was a 56-cent per pack cigarette tax increase, designed to pay for a coordinated trauma care system. The other, at the expense of natural gas producers, had been talked about, but not acted on, over an even longer period of time than the reduced grocery tax.

Beebe has put to rest a school-funding lawsuit that bedeviled the state for more than a decade. Despite his initial opposition to creating a lottery, he played a prominent role in crafting its implementation following enactment. Meanwhile, he has helped bring in new companies and 18,000 jobs during a recession that is bleeding other states dry. "I can't think of anything of note that's really important to the state and the future of the state that he couldn't get if he wanted," says another former governor, David Pryor.

There are numerous explanations for why Beebe has done so well, but one seems to stand out: He is the first Arkansas governor with legislative experience elected in more than 30 years--since Pryor in 1976. "Everyone in the legislature, all 135 of them," Pryor adds, "knows that he knows more about the governing process, the levers of power and the budget than anyone there."

Beebe lacks the glamour of some of his predecessors. No one expects him to become president, like Bill Clinton, or a serious national candidate, like Mike Huckabee, or even a U.S. senator, like Bumpers and Pryor. At 62, he acts like a man perfectly content to cap his career in Little Rock. In so doing, he offers a striking example of why experience, timing and old-fashioned interpersonal skills still offer the best recipe for gubernatorial success. "This is the job he's basically trained himself to do," says Don Zimmerman, executive director of the Arkansas Municipal League. "He's kind of like having a professionally-trained governor, as opposed to having the person who happened to be the best politician during the election year."

Beebe is a bit of a populist by ideology, but he's definitely no spendthrift. "Inevitably," he says, "you're constrained in what you do legislatively by what revenues you've got."

Beebe began thinking about the revenues he would have long before he took office as governor. As president of the state Senate during the post-9/11 recession, he engineered budget cuts that set the stage for the surplus he came in with. In an odd sort of way, it's a potential problem. Beebe has complained to President Obama that a good chunk of the federal stimulus money is designed to help states plug deficits. Since Arkansas hasn't been running a deficit, Beebe has worried that the state would miss out on funds and be "punished for doing the right thing."

The governor's cautious side was fully on display during the 2006 campaign, in which he first floated the idea of reducing the 6-cent grocery tax. Beebe felt that the tax should be eliminated gradually, with reductions coming as the state could afford to make them. His opponent, initially blind-sided by the issue, thought he could trump Beebe by calling for the tax's immediate abolition. But Beebe stood firm and now has the tax down to 2 cents. Had he pushed for outright elimination right off the bat, it's likely that nothing would have happened. "I'm as much a tactician as I am a strategist," Beebe says. "There are things I will come back to and adjust, but we'll continue the fight."

Beebe's incrementalist approach also paid off in pushing through the changes in the natural gas tax. The state's rate of three-tenths of a cent on every 1,000 cubic feet of gas extracted was by far the lowest in the country and hadn't been changed since 1957. Despite biennial attempts at increasing the tax, bills "never came out of committee, much less got three-fourths of the vote in both houses," Beebe recalls. The gas industry was always able to spread sufficient campaign money around the legislature to preserve the status quo.

The situation changed in recent years, however, with improvements in extraction technology and new exploration. In his first year as governor, Beebe hammered out a compromise that led to a 5-cent tax rate, buying off just enough industry supporters with significant breaks for new wells. "Some would say he accomplished less because he insisted on getting the compromise," says Jim Argue, a former state Senate president, "but the reality is that without that, there would have been no tax increase. History shows that."

What Beebe likes to do is to get all the interested players in the same room, either to sign on to a bill before it's introduced or to pull off a last-minute compromise later in the process. He is nearly always willing to cut a deal that gives his own side less than 100 percent. When talks bog down, however, he's not above threats, telling opposing sides that if they can't fix a problem, he'll fix it for them. In the case of the natural gas tax, he used the club of a potential ballot initiative that would have raised rates much more than the legislation did. "I'll tell you, the governor was tough," says Danny Ferguson, who lobbied on the gas tax issue for Southwestern Energy. "A lot of things the industry wanted didn't go forward."

The front of the governor's mansion in Little Rock was used as a stand-in for the home of a billionaire this season on the television comedy "30 Rock." Behind a brick and white-column facade lie an impressive collection of silver, an enormous Persian rug donated by an actual billionaire resident (former Governor Winthrop Rockefeller) and a newly expanded Great Hall that can seat 200 guests comfortably. At a recent "Chef's Ball," at which stars and patrons of the local dining community celebrated the best in area cuisine, Beebe questioned the provenance of the main dish, Korean Galbi-style pork tenderloin and belly. "I call it fatback," he said. "I guess it's become fashionable."

Given the setting, the remark may have sounded like so much aw-shucks humbug, but Beebe comes by his populist instincts naturally. Like Barack Obama, he is a politician possessed of self-assurance that somehow arose out of a difficult childhood. He was born to a teenage mother in her grandmother's tar-paper shack outside Amagon, Arkansas. He never knew his father. The family moved repeatedly from state to state, with Beebe's mother working as a waitress and marrying several times before finally returning home in time for him to complete high school and work his way through Arkansas State University.

Beebe then went to law school with an eye toward joining the FBI--a notion he attributes to the "youthful exuberance of the James Bond era." He ended up going to work for a small but politically connected law firm in Searcy, 50 miles northeast of Little Rock. (His law partners helped him persuade Bumpers to appoint him to the Arkansas State Board of Trustees while he was still in his mid-20s.) Beebe was a highly successful trial lawyer and innovative in his use of expert and technical testimony. The $4.1 million verdict he won in a wrongful death case in 1981 set a state record at the time, although Beebe would go on to break it five years later. "Mike's great gift as an attorney was to see both sides and then be able to see how to prevail," says Paul Petty, a Searcy lawyer.

In 1982, Beebe ran for the state Senate. His organizing efforts were thorough and impressive enough to persuade the incumbent to give up the seat without a fight. In fact, Beebe never faced an opponent during 20 years in the state Senate. His politicking inside the chamber was just as effective. He entered as part of an unusually large freshman class--11 out of 35 members--and some of the newcomers sought to challenge the Senate's prevailing "Old Guard" oligarchy. Although Beebe would eventually curb some of that group's worst practices--individual members chairing multiple committees, official copies of bills being hidden away in desk drawers to prevent passage--he made sure not to alienate the leadership in his first term. He got a coveted seat on the all-important Joint Budget Committee as a freshman.

Skillful as he was in court at cross-examination, Beebe became just as good at ferreting out information in legislative hearings. "In an environment like Arkansas, there is not much professional staff--certainly in the 80s and 90s there was not much staff," says Hendrix College political scientist Jay Barth. "Legislators had to rely on peers who they respected as experts. That was very much to Beebe's benefit. He took the time and had the smarts to learn the nuances about state government, and people had to rely on him as they made their own decisions."

Eventually, Beebe landed in a leadership role. His ability to control the majority of Senate votes on almost any given issue made him the local Damascus--everything went through him. Even after he left the Senate to become state attorney general, forced out of the legislature by term limits, he continued to function as de facto legislative liaison for Governor Huckabee. Huckabee was a successful governor, but he had little interest in pressing the flesh with legislators or engaging in the minutiae of the legislative process. Beebe was willing to do it for him. The fact that Beebe was a Democrat and Huckabee was a Republican didn't seem to matter all that much.

Whereas Huckabee holed up in his office, Beebe works the halls and cafeterias and brings in legislators four or five times a day for talks during sessions. "There's no telling where you'll find him in this building," says state Senator Shane Broadway.

On one recent afternoon, Beebe emerged from his second-floor Capitol office, raced up the marble steps to the House chamber, and began chatting with legislators and lobbyists, moving right up into their faces like a baseball manager questioning a call but in an amiable way. Beebe is an inveterate shoulder-patter; his own shoulders shake hard when he laughs. A small pack of reporters follow him around from huddle to huddle and ask about upcoming legislation. "I'm for all these bills, in the spirit of what they're trying to do," Beebe told them that day. "But if you don't have the money, you don't do it."

Herb Rule, a former legislator who is now a lobbyist, says there's an old adage in Arkansas about how legislators don't get many chances to vote on good legislation. "Instead, your main job is beating bad legislation." In Beebe's time, the number of bad bills that have to be beaten back--or even get introduced--has significantly decreased. Beebe and his chief of staff, Morril Harriman, who served with him for 16 years in the state Senate, try to vet as much as possible before it even reaches the drafting stage. In this sense, Beebe governs the way he practiced law, evaluating cases on the front end to determine their potential before ever signing on. "He's done a wonderful job of setting a limited agenda of serious, good bills," Rule says.

Of course, Beebe was dealt a strong hand right from the start. He works with longstanding Democratic allies in both chambers. And, while Arkansas governors always have been powerful, they've been made more so by term limits (eight years in the Senate and six in the House), which have left behind a legislature composed mostly of greenhorns. The courts also did Beebe an enormous favor by in effect banning most earmarks. When legislators want to direct money toward hometown projects, they have to convince Beebe of their value. "I'll be the first to admit I've been fortunate in a lot of respects," Beebe says. "A lot has happened that I had nothing to do with."

Besides the constitutional and partisan advantages, legislators simply have granted Beebe powers they haven't entrusted to other governors. A major case in point is the Quick Action Fund--a $50 million discretionary pool of money that gives the governor ready cash to close deals with companies looking to relocate or expand in Arkansas. It is in large part because of this fund that the state economic development commission has made deals with 202 companies, cutting by half the number of jobs the state would otherwise have lost due to recession during Beebe's tenure thus far. "There have been more company announcements than I can remember," says Reynie Rutledge, CEO of First Security Bank, "and it's in an economic downturn."

Beebe doesn't hear a lot of criticism, even from Republicans. Doyle Webb, the state GOP chair, is quick to praise him. To the extent that the governor does get criticized--and he seems to remember every slight--it is by nominal allies who take a look at his track record and popularity and wonder why he doesn't ask for more.

Bob Johnson, the Senate president pro tempore, responds that it's Beebe's firm grasp of the need for compromise--the discipline to "take it in bites"--that allows him to build from success to success. "The reason he accomplishes what he accomplishes," Johnson says, "is he knows exactly what to ask for."

Beebe can be competitive. His friends in Searcy recall hearing explosions of anger and frustration from a fair distance off the court during his tennis-playing days. But when he knows he's going to lose a policy fight, he does so quietly. He remained on the sidelines during the campaign to allow creation of a state lottery. He expressed disappointment when Arkansas voters blocked gay and unmarried couples from adopting children or providing foster care, but he hasn't pushed for repeal of the ban.

Even so, Beebe has proven himself willing to lose on principle from time to time. "Certainly you'll get no argument from me about the importance of pragmatism," he says. "At the same time, there are other factors that enter in, even if they're not the most pragmatic."

Both Beebe and Argue, the former Senate president, like to tell a story from their Senate days about a dispute they had over Medicaid funding. The details are complicated, but the pivot point came when Argue, a large man, cornered Beebe in a restaurant. The two had squabbled repeatedly about their overall approach to policy making, with Beebe saying that Argue was too idealistic, "with no pragmatic bone in his body," while Argue in turn claimed Beebe carried caution to a fault.

In this case, Beebe knew that Argue was right on the merits. "He shamed me into changing my position," Beebe recalls. Together, the two carried the Senate with them. But they ended up losing the bill when they couldn't persuade Huckabee to go along. "Mike Beebe, he's a very pragmatic guy and he ends up with solutions," Argue says, "as opposed to a guy like me who's so idealistic that sometimes he doesn't get the problems solved. He is a problem solver to the core."