Weekly Legislative Wrap-Up (a few days late)
Posted on January 20th, 2010
Last Friday, the Arkansas General Assembly’s Joint Budget Committee wrapped up its first week of budget hearings, ahead of the state’s first-ever fiscal session, which will begin February 8. Directors of several state agencies, known as “the Big Six,” presented their budgets for fiscal 2011 to the committee, whose recommendation will now be used to draft the appropriation bills that will be voted on during the upcoming session. However, before taking up agencies, the committee heard from Department of Finance Director Richard Weiss, who presented Gov. Mike Beebe’s revenue forecast and $4.48 billion general revenue balanced budget for fiscal 2011.
Richard Weiss
Given the current revenue shortfall, the Governor’s plan recommends suspending an increase in the pay plan for state employees, but the outlook is not all bleak. The forecast projects moderate growth, nearly restoring the state to revenue levels seen before budget cuts of July 2009. “Also, we’re not having to use one-time money to balance the budget like we had to do for this year,” said Rep. Bruce Maloch, (D-Magnolia), co-chair of the Joint Budget Committee. However, in case the economy gets worse, the Governor proposes creating a $34.5 million reserve fund, to come from future revenue and to be used to fill in possible gaps. The legislature will vote on the recommendations in February.
As for agency budgets, the committee approved all executive branch recommendations, while acknowledging some minor adjustments will be made once the session is underway. Though the Department of Education has seen an overall shortfall, for now, it can rely upon money set aside from public school fund balances, and will have sufficient appropriation to continue funding programs necessary to guarantee school adequacy, as required by the state Supreme Court.
Gov. Beebe’s proposal for state colleges and universities calls for a $17.2 million increase in general revenue for higher education in fiscal 2011 over fiscal 2010. However, the committee recognized there will be some tweaking of the appropriations during the session.
The Arkansas Department of Correction (ADC) and Department of Community Corrections (DCC) are also impacted by falling revenues, but given the state’s constant struggle to maintain adequate prison space, ADC told legislators it will search within its budget for money to open at least some new beds at its facility in Malvern. The governor also proposes using $6.2 million in one-time money to reimburse counties for housing state prisoners.
Health Department leaders told legislators their budget can support the continued implementation of a statewide trauma system, though it may be slowed by the decrease in revenue. Medicaid is a major concern in regard to the Department of Human Services budget, though there are no plans to cut services. “Medicaid and the Medicaid Trust Fund remain sound for fiscal year 2011. However, because of increased demands on the Fund, the Agency is studying possible changes for future years and will be closely monitoring any federal health care legislation to determine its impact on Medicaid,” said Maloch.
“The first week of hearings went as planned. There was good discussion by the members, and the agencies addressed many of our questions,” Maloch said. Hearings will likely last one more week, as the Joint Budget Committee reviews budgets for the State Library, Department of Workforce Services, and the Department of Higher Education’s agency budget.
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