Arkansas Legislative Council – October 16, 2009
Posted on October 16th, 2009
Date & Time: Wednesday, October 16, 2009 at 9:00 AM
Location: Room 171, State Capitol
Committee Information: Members on Committee
Agenda: http://www.arkleg.state.ar.us/assembly/2009/Lists/Meetings/Attachments/11855/I7854.pdf
Attachments
9:00 am – Meeting called to order. Minutes approved. We quickly moved into the September Revenue Report.
9:07 am – Sen. Kim Hendren asked what we are doing to make cuts so that we do not have to come back and ask for a tax increase. Richard Wiess points out that we operate under revenue stablization. However, even after all of B Funds are cut, that only makes up 13 million worth of cuts. We are still operating with a $89 million deficit.
9:10 am – We are currently 3.3% under adjusted net available for distribution. The Allotment Reserve Fund (sort of like a Governor’s rainy day fund) has spent $61 million to shore up the budget, there are only about $39 million dollars left.
9:14 am – Rep. Hutchinson is asking which areas that we can cut since we cannot cut K-12 Education and we cannot cut Higher Ed because we recieved Federal Stimulus Funds. For the first time ever, I heard Richard Wiess say that there may be a way to cut K-12 given that the the Commissioner of Education still maintains that he can certify adequecy. I wonder if this is an area that they are thinking about cutting.
9:18 am – In July we were $13.712 million below forecast, in August $33.216 million below forecast, in September we were $88.973 million below forecast.
9:20 am – Rep. Glidewell asked how much are we in debt to the Federal Government for the Unemployment Insurance. Mr. Wiess said that he currently does not have the numbers.
9:22 am – Rep. Flowers is asking for the sources of certain funds. In particular the Tobacco Taxes has grown by 71% resulting in a monthly increase in about $9 million dollars.
9:31 am – Rep Flowers is still asking questions. In the mean time I have notices that the special dedicated revenue for Breast Cancer Research, Breast Cancer Control, Aging and Adult Services (Meals on Wheels), UAMS, and DHS Grants (Senior and Prescription Drugs) has fallen by about 15%. These revenues come from a special tobacco tax. What happened was that our increase in the tobacco tax for funds that go to the general revenue caused sales in Arkansas to fall. Which cause the special taxes for dedicated projects (which did not increase) to fall. In essence, what we did was rob 15% from those causes above to put it in the general revenue. This is a clear case for dynamic scoring of proposed taxes.
9:38 am – Percy Malone is trying to make a case for continuing to spend. He makes a strike at former Governor Huckabee for being the one to increase the last tax. What he failed to mention was that it was he and Mike Beebe who shoved it down his throat when they controlled the Senate.
9:40 am – The next forecast adjustment will likely be made on December 1. Sen. Broadway is asking if there is an indication that this may be the worst month and things will get better. He said that last month is so far off normal, that future predictions lack confidence than typically would be the case. Sen. Broadway is also trying to make the case that we should continue to keep funding at current levels. He seem to lose some confidence in that position as Richard Wilson responded to his questions.
9:48 am – Rep. Dismang is asking if we have an indication of the impact on sales taxes and income taxes from the lottery. Apparently the impact on the budget from income taxes will be small. There is no immediate answers on the impact on the sales taxes.
9:51 am – Sen. Jimmy Jeffress is asking where the lottery loan repayment will go to. It will go back into the states revolving loan fund.
9:59 am – There is alot of discussion and questions where we can ask questions about expenditures as well as revenues. We technically cannot ask about stuff outside the revenue report.
10:00 am – We are currently reviewing reports from Standing Committees. Rep. Davy Carter asked about the $750,000 claim. Rep. Flowers provided details, arguably somewhat inaccurately.
10:05 am – Rep. Davenport presented the Game and Fish / State Police report. Highlight is probably the new iPod/iPhone application by the Fish and Game Commission. Report was reviewed without question or comment.
10:07 am – Rep. Roebuck presented the Higher Education report. Rep. Flowers is asking for additional information and ask that a greater effort to get the information about scholarship out to certain student groups. Report was accepted.
10:09 am – Litigation and Reports Oversight reviewed, only informational questions were asked.
10:14 am – Rep. Dismang provided the Performance Evaluation and Expenditure Review. He makes the points that we are allowing for expenditures before the appropriations are made, and it will lead to reverse bidding for the projects. Rep. Dismang was diligent in getting the Arkansas ENERGY STAR Appliance Rebate Plan established in a way that was much more efficient than in other areas.
10:20 am – Rep. Wells provided the Uniform Personnel Classification and Compensation Plan report. The report was adopted without question or comment.
10:23 am – Butch Calhoun is reporting on the Rural Services Grants. Most were awarded this last time, but I fear that may not be the case due to a lack of funds next year.
10:25 am – The Student Loan authority is requesting permission to restructure its existing bonded indebtedness by issuing refunding bonds and transferring student loans to Straight-A Funding, a federally sponsored conduit.
10:39 am – Committee adjourned.
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