Arkansas Legislative Council – December 18, 2009
Posted on December 18th, 2009
Date & Time: Friday, December 18, 2009 at 9:00 AM
Location: Room 171, State Capitol
Committee Information: Members on Committee
Agenda
Attachments
The Council was established by Act 264 of 1949 to collect data and information upon which legislative decisions will be made during regular session of the General Assembly. The Bureau of Legislative Research of the Legislative Council is a service agency within the legislative department of government. All members of the General Assembly have access to the Bureau of Legislative Research. The Legislative Council is the supervisory committee for the Bureau of Legislative Research, the Council coordinates the activities of the various interim committees and through the various committees provides legislative oversight of the executive branch of government. The Council consists of 36 regular members which is comprised of 20 House members and 16 Senators. In addition there are 24 ex-officio voting members and 5 ex-officio non-voting members.(A.C.A. 10-3-301)
9:05 am – Meeting called to order and minutes from last meeting approved. Here are the minutes: Exhibit C – Minutes – 11-20-09
9:06 am – Richard Wilson, Assistant Director of Research Services in the Bureau of Legislative Research. You can see the revenue report here. Exhibit D.1 – BLR Monthly Revenue Report. Senator Kim Hendren said that we keep getting these reports with negative numbers, but keep getting told it is going to get better in the near future. He wanted to know when we are going to do something about this or if we intend to keep going and wait for the taxpayers or China to bail us out. Rep. Reep asked for clarification on values. Rep. Pennartz asked a leading question pointing out that the tobacco tax is bringing in more money than was budgeted for the trauma system.
9:14 am – Richard Wilson is indicating that there is not likely to be a rapid recovery due to mostly unemployment.
9:16 am – The following graph is mislabeled in the agenda, it does not concern the unemployment trust fund. This graph is the U.S. Business Cycle Downturns from 1929 to 2009. Exhibit D.2 – Unemployment Insurance Trust Fund Information. This graph demonstrates the how this is the worst economic situation in duration since the Great Depression.
9:20 am – Mr. Artee Williams is currently reporting on the current indebtedness to the federal government for the unemployment trust fund. Mr. Williams said that by the end of the year we will be $223 million in debt. Sen. Smith made the point that this means that unemployment taxes are going to be going up and going up drastically. Mr. Williams countered that we don’t know how much that will be because the federal government MAY not charge interest on that debt and MAY not require a complete repayment. [In otherwords, this MAY get rolled into the insane national debt that our children and grandchildren will have to pay.]
9:26 am – Sen. Teague is asking how much the unemployment trust fund should be in order to be considered solvent. The Title 12 unemployment trust fund should be around $700 million up to about $1 billion (with a “B”)
9:29 am – Sen. Hendren has discovered that the prediction that the unemployment trust fund will $353 million by the end of the year 2010. Sen. Hendren is asking how this fits into our balanced budget requirements in our State Constitution. The response is again that this may be paid by the federal government. The question of Constitutionality was deftly avoided.
9:33 am – Senator Hendern is asking about fraud in this system. He still hasn’t got his question about balanced budget requirement. The room is very loud. Much talking and activity in the room.
9:35 am – Rep. Hutchinson asked about the State Constitutionality of this debt. The question was deferred to Richard Wiess, Director of DF&A. Sen. Broadway redirected with a question about what the department is doing in communications with DC to solve this problem that 24 other states are facing. Response: Listening sessions and meetings are beginning to take place, their group will be going to talk to Congress next month.
9:39 am – Rep. Hobbs is asking that even if Congress “forgives” the debt of the trust fund, will there still be requirements to increase the unemployment trust fund. The response is the affirmative.
9:44 am – I asked where the errors to caused this situation in the first place, and even if we increased the unemployment taxes and begin to create the solvency reserve recommended of $700 million to $1 billion, what activity is in place to prevent the trust from being raided again by increasing unemployment benefits. I asked what went wrong, was the trust fund mismanaged by the legislature or due to recommendations by the department.
9:45 am – He tried to redirect to the point that we did not expect this economic downturn. I countered that by his own words that even before the economic downturn he knew that the $700 million to $1 billion was the balance required for solvency, but the trust had never been above about $225 million. Clearly this mismanagement by the department or the legislature created the current situtation. I was cut off by the chairman.
9:55 am – Richard Wiess presented the revenue forecast. AMAZING! Guess what, they predict we will have a 2.0 percent growth rate next fiscal year. Here is the forecast: Exhibit D.3 – DFA Official Revenue Forecast. I wonder who seriously believes that we should create our next budget based upon such a rosy forecast? The importance of this is big. The spending created in the upcoming budget session will be based upon this forecast. If the forecast predicts additional revenues, the budget will have increased spending. There is nothing conservative about this budget forecast.
10:06 am – We are currently reviewing the subcommittee reports. Here are links to the various reports: Exhibit F.1 – Rules and Regs Subcommittee Report, Exhibit F.8 – PEER Subcommittee Report, Exhibit F.10 – Review Subcommittee Report, Exhibit F.11 – Personnel Subcommittee Report.
10:10 am – Rep. Dismang is asking that we hold additional hearings to deal specifically with the Unemployment Trust Fund. The chairman agreed to see that this is placed on the agenda. Sen. Altes asked that the chair of PEER be asked to chair these meetings.
Other reports given today are here: Exhibit H.1a – ABA Report – November 2009, Exhibit H.1b – Capitol Zoning District Report, Exhibit H.1c – ADCC Population Report 12-7-09, Exhibit H.1d – ADC Population Report 12-11-09, Exhibit H.1e – DFA Monthly Revenue Report – November 2009, Exhibit H.1f – DHS-DCFS Placement Report, Exhibit H.1g – DHS- Medicaid Report, Exhibit H.1h – ASP Report, Exhibit H.2a – Workforce Services Report – Unemployment Insurance – Training Fund, Exhibit H.2b – Workforce Services Report – Special Fund, Exhibit H.3a – ATRS Request for Review, Exhibit H.3b – Travel Report, Exhibit I.1 – Health Department update, Exhibit K.1 – ISP-2009-202
10:16 am – Rep. Lowery is asking the Arkansas Legislative Council to formally go on record to object to the Free Thinker’s Display on the Capitol grounds. Very emphatic “Aye” rose up. The only audiable “Nay” was voiced by Rep. Nancy Blount.
10:19 am – Rep. Greenberg is presenting his interim study proposal. It was approved.
10:20 am – Meeting adjourned.
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