OffTheMarble Commentary Summary on Arkansas Issues

Posted on January 30th, 2010

Listed below is what I consider my “Essential Stack of Stuff”. This list is my commentary and research on issues facing Arkansas.

Prison Overcrowding in Arkansas – Will Conservatives Ignore It Or Present Solutions?

Prison Overcrowding – A Conservative Solution

The Arkansas Budget & How The Game Is Played

Five Principles of Responsible Transportation Policy

The Cost of State Online Spending-Transparency Initiatives

Arkansas Fuel Taxes Highest of Any Surrounding State

Explosive Spending Growth by the State of Arkansas

Arkansas: Taxed Enough Already…

Growth in Government Employees in Arkansas

Five Conservative Ideas for State Level Healthcare Reform

My Take: Arkansas Highway Finance

Tax Creep, Liberal Creeps, and the Arkansas Middle Class

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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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Joint Budget Committee – January 12, 2010

Posted on January 12th, 2010

Date & Time: Tuesday, January 12, 2010 at 9:00 AM
Location: Room 171, State Capitol
Committee Information: Members on Committee
Agenda and Attachments

Budget Materials:

• Arkansas Public Higher Education Operating Recommendations FY10-11 Volume 1: Universities
  
• Arkansas Public Higher Education Operating Recommendations FY10-11 Volume 2: Colleges
  
• Arkansas Public Higher Education Personal Services Recommendations FY10-11
  
• Arkansas Public Institutions of Higher Education Appropration Requests (including Legislative Recommendations) FY10-11
  
• Arkansas Four Year Institutions of Higher Education Non-Classified Personal SErvices Requests (including Legislative Recommendations) FY10-11
  
• Selected Statistical Financial Data
  
• Arkansas Legislative Tax Handbook
  
• Summary of Expenditures and Construction Expenditures for State Agencies and Institutions for Fiscal Years 1998099 through 2007-08
  

The Joint Budget Committee provides for consideration of appropriation bills and budget proposals submitted by the General Assembly. The Joint Budget Committee is authorized to meet during the interim to work on budgetary and other matters. When the Legislative Council holds pre-session budget hearings after October 1 (preceding the next regular session of the General Assembly) all members of the Joint Budget Committee appointed to serve at the next following regular session are authorized to attend. (A.C.A. 10-3-509)

9:03 am – The meeting called to order by Rep. Bruce Maloch and Sen. Gilbert Baker. Rep. Maloch said that we are now plowing new ground. This it the first time that budget hearing have been held at this time of the cycle.

9:04 am – [There is an interesting dynamic going on with the budget hearings that we have never had before. This is the first time the same group of legislators will be voting on the budget as are involved in the budget hearings. Usually the budget hearings are heard by third term members who will not be participating in the session.]

9:06 am – Sen. Gilbert Baker is asking that legislators do the hard work now so that we can have a quick efficient session.

9:08 am – We have a large stack of essential stuff on our desks this morning. Hopefully I can find this information online that I can link to.

9:09 am – BLR Staff is current covering the pre-fiscal session budget hearing parameters. You can view that information in the Attachments. Also covered in that attachment is the Budget Hearing Special Rules.

9:18 am – The Budget Hearing Special Rules were adopted by the committee by a voice vote. No audible objection.

9:21 am – Mr. Kim Arnell is currently reviewing how to read the budget manuals and describing the features.

9:23 am – [It looks like the current budget materials are not current. These we currently have appear that they do not reflect the recent $106 million in cuts.]

9:28 am – The manuals above that are labeled (including Legislative Recommendations) appear to have updated information.

9:35 am – Senator Glover is asking about if there is going to be a difference between the legislative recommendations and the Governor’s recommendations.

9:38 am – Richard Wiess is presenting the revised economic forecast (second edition) .

9:39 am – The net available general revenue forecast for FY 2010 will be reduced by $106 million, equivalent to a 2.4 percent reduction. Therefore, effective January 11, 2010, the new funding level for 2010 is $4,302.77 million or 95.64% of A.

9:41 am – They are still predicting a 4.1 percent growth for FY 11. [I really don't understand the constant and ongoing hyper-optimism by DF&A.]

9:45 am – Sen. Steele asked how much is left in the “rainy day fund”. The answer is about $32 million. He followed up with a question if there would be any job cuts. The answer was that there will be no reductions in the state workforce.

9:47 am – 95.6% of “A” category appropriations will be funded. There is discussion that increases in the pay plans will be suspended.

9:49 am – The Governor is directing growth revenues into the balanced budget revenue reserve fund, also known as the rainy day fund. I don’t think that most of the members of the legislature fully realize the consequences of that yet, otherwise they would be howling. You see… if the surplus revenues go to the revenue reserve fund, then they don’t go into the General Improvement Fund.

9:55 am – Senator Percy Malone is asking why any surpluses would not be applied to those areas that have previously been cut. He also wanted to know what happens to the surplus revenue stream once it goes above the predicted $32 million difference. [I think that this would essentially mean that the Governor will have consolidated control of 100% of surplus revenue and left the legislature with empty General Improvement Fund coffers.]

10:04 am – Senator Johnny Key is asking questions to determine how the forecasts were determined and how much confidence we can have in the forecasts that DF&A uses from “Global Insight”. Of course, they have to say they are confident but they did note that everything has been volatile lately.

10:08 am – Sen. Percy Malone voiced his opinion that he doesn’t see anything that would indicate 4% growth. He is pointing out that to have a 7% swing from 3% down to 4% up. He is struggling to find a way to ask the question that gets the information that DF&A doesn’t want to say. Sen. Malone is an experienced legislator, when guys like him start digging, it is because they know there is some information there somewhere that he needs to know but isn’t being told.

10:15 am – Sen. Miller is asking about the Governor’s proposal. He is asking if the language of the proposal means that the Governor would control these funds without approval of Legislative Council. Richard Wiess hedged his answer saying that it will be according to what we allowed him to do. Sen. Miller is asked about the 25% of the previous one time money, asking if the Governor was using that too. Apparently the answer is yes.

10:20 am – Both of the Budget Committee Chairmen started asking clarifying information. I think the questions that both ask has less to do with not knowing the answer, but so members of the committee would have the answers they needed to know.

10:25 am – Rep. Pennartz is asking what portion of the Governor’s surplus funds is remaining. The Governor has $113 million but there was no requirement that 25% would be retained like the legislature’s. Rep. Pennartz has determined that the Governor still has about $94 million remaining.

10:31 pm – The meeting has adjourned for lunch and will reconvene at 1:00 pm.

1:06 am – The committee has reconvened. We are currently reviewing infromation in Higher Ed. Operating Recommendations.

1:18 pm – Alot of this information currently being covered are difficult to describe without being able to reference to the documents that we are looking at.

1:35 pm – State higher education funding per student full-time equivalent is declining. The state funding covers less than half of the cost. If state support is reduced, the student’s burden is increased.

1:37 pm – The lottery revenues change who pays the cost of college, it will not impact the higher education budgets. [Except for the fact that it may increase enrollment which could impact the budget from both positive and negative ways. Increased enrollment means increased revenues but also increased need for educational infrastructure.

1:39 pm – Several higher ed. institutioins were financially unable to fully implement the pay plan because 1) half the pay plan was to be paid from A funds and the other half from B-1 funds which were cut due to budget shortfalls, 2) the legislature ultimately decided to take $11 million from B-1 and replaced it with Stimulus money but Stimulus funds cannot be used for continuing obligations such as pay raises.

1:44 pm – Other funding for higher ed comes from the Allotment Reserve Funds for $17 Million. Since there is not assurance that the Allotment Reserve Funds will continue to be available, therefore these funds cannot be used for continuing obligations such as pay raised.

1:47 pm – I just saw Representative Les Carnine who grew a goatee over the holidays. He now bears a striking resemblance to Ed Rollins.

1:53 pm – The Arkansas Higher Education Coordinating Board recommended the state portion of the 2.3% COLA, $7.6 million for initiatives that have been funded from grants and/or General Improvement Funds are not covered by the funding formula, $0.5 million to match Federal Land Grant Funds increase. The total request for new funds is $20,148,122.

1:59 pm – The “non-formula” additional fund recommended are 1) the Arkansas Delta Training and Education Consortium (ADTEC)/Arkansas Delta Workforce Innovations for Regional Economic Development (ADWIRED) and the Crossroads Coalition ($3.2 million), 2) ASU Arkansas Delta Heritage Centers ($2.1 million), 3) UALR Nano-Technology Center ($2.3 million), and 4) UAPB Federal Land Grant Matching Funds ($0.5 million)

2:03 pm – Ultimately what this means is that higher education institutions will be seeking tuition increases. Legislators have been asking questions on how cuts can be made without increasing tuition. Some legislators have suggested that by not providing raises that tuition increases could be avoided. The pushback was that the salaries are lower in higher ed in Arkansas than in other SREB states. It was also pointed out that tuition rates are lower than other SREB states.

2:15 pm – Rep. Steve Cole, who is also a vice chancellor of a small Arkansas college is pleading the case for prioritizing funding for the smaller colleges. He made a compelling case, but like everything else it will be put within the context of all the obligations of the state.

2:28 pm – We are currently reviewing Arkansas Public Higher Education Operating Recommendations FY10-11 Volume 1: Universities. As you can see I found a link to the manual. I have also linked it at the top of this page for easy future reference.

2:41 pm – Rep Bruce Maloch, house co-chair, made a motion to adopt the legislative recommendations with a few exceptions recommended by the AR Higher Ed Coordinating Board.

2:45 pm – This whole process is odd, this motion is for appropriations that do not actually take into effect they economic downturn. Appropriations are actually fair higher than actually get funded through the Revenue Stablization Process. Appropriations only limit the maximum amount that can be spent, and are not determinative of how much is funded.

2:49 pm – Agenda completed for today. We will meet again tomorrow.

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Arkansas Legislative Council: Adminstrative Rules and Regulations – January 11, 2010

Posted on January 11th, 2010

Date & Time: Monday, January 11, 2010 at 9:00 PM
Location: Room 151, State Capitol
Committee Information: Members on Committee
Agenda
Last meeting

This committee reviews matters regarding administrative rules and regulations by state agencies, boards, and commissions for Legislative Council review, as required by A.C.A. 10-3-309; and such other matters pertaining to administrative organization, rules, regulations, and procedures as may be assigned to the committee by the Legislative Council.

9:04 am – The meeting was called to order by Sen. Percy Malone.

9:05 am – Item B on the agenda was passed over.

9:07 am – Revisions to the Rules and Regulations for the Arkansas Auctioneers Licensing Board were presented by Ms. Kristy Arnold. Sen. Malone asked if there were any fee increases. The response was that there were not. These new rules primarily deal with electronic auctions.

9:08 am – Mr. Bill Trice with the State Board of Dental Examiners presented Article XVIII; Mobile Dental Facility Regulations. Rep. Billy Gaskill, who is a retired dentist, asked several questions about who is served primarily and if all people could be served. The primarily group targeted are those under financial distress, but may serve all people. Senator Malone is asking about the regulation and limits on the type of care to provided with reference to anesthesia. Mr. Trice explained that those regulations are in these new regulation. Sen. Malone asked for a specific reference to that limitation. Mr. Trice explained that it is not in this particular regulation, but is the result of other regulation and works with this one. Rep. Gaskill provided explainatory commentary and praised this type of work for children.

9:16 am – Rep. Johnnie Roebuck asked about how follow-up care is provided. Mr. Trice said they have to have follow-up care arranged, either by another local dentist, Childrens Hospital, or a scheduled return visit and they have to provide that information to the board.

9:18 am – Sen. Malone is making alot of pushback to Mr. Trice about the need to provide a prearrangement with a local dentist for follow-up treatment. Rep. Johnnie Roebuck is also asking alot of questions asking about what work was done with the Dental Association to create this rule. Rep. Roebuck’s husband is a dentist. [I don't know if I understand what Sen. Malone is going after with his questions, but I suspect he has had some negative reaction from his consituents who are rural local dentists.] Mr. Trice said that the Dental Association was “on-board” with these rule changes.

9:23 am – We returned to item B on the agenda to review of the report on the promulgation process for rulemaking by the State Board of Public Accountancy on the board’s proposed amendments to Rules 6, 7, 10, 12, 14, and Rule 1. This was held up due to a fee increase put in place. Apparently they have now removed the fee increase. Sen Malone is lecturing the the board representatives about the rule making procedure and the need to contact the press when a meeting between board members occur.

9:30 am – The representative for the State Board of Public Accountancy is being questioned about her previous testimony in the last meeting. There is apparently some conflict in her testimony from the previous meeting about he procedure that was followed. Sen. Malone actually had her previously transcribed and read back to her. Apparently there was only one board member at the time due to a vacancy on the board. Therefore, apparently there were not two or more (required for press notification) board members were not present when the discussion of the public comments for the new rules were handled.

9:36 am – Sen. Malone asked for information about the responsibility of board members once there term has expired from the Attorney General’s office. We were informed that one a person’s term has expired they are not and often to not continue attending the meetings until their replacement is appointed.

9:38 am – We are currently covering the rules related to the rules from the Dept. of Education about the access to public school information on comprehensive school improvement plans. Apparently, in the public comments it was requested that the rules be amended to require a link to the most recent version of the information. The report stated that, “No changes were made as a result of this comment.” Apparently, changes were, in fact, made and the change was made to the proposed rules.

9:43 am – We are currently discussing the rules related to professional development. This covers teacher training related to accomodate lottery scholarships and the use of AEDs.

9:46 am – Representative Randy Stewart is asking about a rule change related to the requirement to get a “sworn statement” from a doctor to miss a training. She says that it means just a doctors excuse. There is a definite difference from a legal standpoint. [This is one way the bureacracy creeps in it's power. They put into place oppressive rules that go further than the law created by the legislature, when they testify before the legislators about rules implemented they claim that certain terms mean the same thing, but the legal meaning in actually goes far beyond legislative intent.]

9:51 am – Sen Percy Malone voiced his displeasure saying that he didn’t care for them making law over there and that they should stick to their knitting. [Situations such as this is why one of the most important duty of legislators is to oversee the rules created by the agencies.]

9:55 am – As a member of the Education Committee, I specifically remember this coming through. The law never intended anything other requiring the total number of 60 hours of professional development hours. There was never any intent to require anything but a teacher demostrate an extended period of illness if they could not get the professional development over the year. The local school district should have the ability to wave or make up missed training.

10:01 am – Rep. George Overby asked if they would take control from the local school board. The Dept. of Education response was “no”. I get the feeling that most of the legislators feels like the Dept. of Ed is being rather non-responsive and dismissive of the legislators concerns.

10:03 am – Sen. Kim Hendren voiced the result of un-intended consequences in the creation of these rules and regulations.

10:04 am – The attorney for the Dept. of Ed voiced that they would adjust the rule to reflect the preferences of the legislators.

10;07 am – We are now covering the methods of calculations of school miscellaneous funds.

10:08 am – Off topic… whisper moving through the committee room that the Governor is recommending an $106 million cut to the the state budget.

10:11 am – Paul Stricklin is reporting on the rules for the Arkansas Emergency Telephone Services Board. This board is the one that administers the 65 cent fee on cell phone to provide 911 services to cell phones.

10:13 am – Karen Bassett from the Dept. of Enviromental Quality is back concerning Regulation 33; Motor Vehicle Racing Facility Regulations. This was held until staff could determine if anyone was inadvertantly affected by that regulation. There was not.

10:15 am – Regulation 18; Air Pollution Control Code was reviewed. This related to open burning. Regulation stands reviewed.

10:16 am – Things are moving faster than I can keep up with now. This often happens toward the end of committee meetings.

10:17 am – Ryan Benefield of ADEQ presented Regulation No. 23; 2009 Hazardous Waste Management Annual Update. Rule stands reviewed.

10:18 am – We passed over item 8 on the agenda.

10:19 am – Robert Hart with the Dept. of Health, Center for Local Public Health, Engineering Section is presenting a new rule related to backup power for Public Water Systems. Sen. Malone asked if there were deficiencies that prompted this rule. Mr. Hart denied that there were. Sen. Malone replied, “Then why are you making a new rule then if the existing one is working?” [Darn good question] Mr. Hart claimed that just makes the rule clearer. He is explaining that the language became outdated since it was created in the 1990s. The rule changes are supposedly just clean up language.

10:26 am – Apparently this new regulation requires that the water systems has stand-by power or other means for maintain water pressure during a power outage. The rule stand reviewed.

10:28 am – We are returning to item 8 on the agenda. Byron Freeland with the Dept. of Finance and Administration; Arkansas Racing Commission is presenting a raft of rule changes. See the agenda.

10:30 am There is a ton of stuff left on the agenda, but I have to head over the the Board of Directors meeting for the Science, Technology, Engineering, and Mathematics (STEM) in Education Coalition. The stuff toward the end of the agenda is usually routine, so it probably would have been pretty boring anyway.

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Pre-Filing Begins For Fiscal Session Legislation

Posted on January 7th, 2010

From The House Communications Office: The first-ever fiscal session of the Arkansas General Assembly begins Monday, February 8. However, next week marks an important first step in preparation for the session, as appropriation bills and concurrent resolutions may be pre-filed beginning Monday, January 11.

In the House of Representatives, the pre-filing process is simple and efficient. To minimize the possibility of error, the sponsor hand delivers the legislation to the Chief Clerk. Each bill, drafted by the Bureau of Legislative Research, has a barcode that is scanned, assigning the bill a number. Upon scanning, the legislation is automatically posted to the General Assembly’s Website, under “Recently Filed Bills.” The full text of the bills and resolutions will be available to the public on the day they are filed.

Also next week, Joint Budget Committee members will conduct pre-fiscal session budget hearings beginning Tuesday, January 12. The committee will initially review and recommend action on appropriation measures for the Department of Education Public School Fund Account, Department of Human Services, Department of Health, Department of Corrections, Department of Community Corrections, Department of Higher Education, and the Arkansas State Library. Appropriations will be for the state’s next fiscal year, which begins July 1, 2011. The committee’s deliberations will continue after the session convenes.

FISCAL SESSION FACT SHEET

• In November 2008, 69% of Arkansas voters approved legislatively referred Proposed Constitutional Amendment 2, which became Amendment 86 to the Arkansas Constitution.
• Amendment 86 reduces the period for which appropriation bills are valid from two fiscal years to one, requiring the General Assembly to meet in a fiscal session during even-numbered years, with deliberations limited to action on appropriation bills.
• Each fiscal session will begin the second Monday in February of even-numbered years (Monday, February 8, 2010), and shall not exceed 30 days.
• The fiscal session may be extended one time, however, for no more than 15 days, by a 3/4 vote of both the House and the Senate.
• In order for non-appropriation legislation to be introduced, a concurrent resolution substantially describing the bill must be approved by a 2/3 vote required in both chambers.
• A concurrent resolution to allow a non-appropriation bill may be pre-filed along with other legislation beginning Monday, January 11, but must be filed no later than Monday, February 8, (the first day of the session).
• If a concurrent resolution is approved by 2/3 of the House and the Senate, the non-appropriation bill referenced in the resolution must be filed no later than February 22, 2010, (the 15th day of the session).
• If the bill is an appropriation bill, it too must be filed no later than February 22, 2010, (the 15th day of the session), however, requires no concurrent resolution.
• Two non-appropriation bills are expected to be introduced for consideration. The Revenue Stabilization Act is not an appropriation bill, but it funds General Revenue budgets and must be addressed to govern state spending in the next fiscal year.
• Lawmakers are also expected to consider legislation establishing award amounts for lottery scholarships. This will be a non-appropriation bill that effectively functions as one, and is essential to ensuring net revenue generated by ticket sales from the voter-mandated Arkansas Lottery is passed on to students who qualify for scholarships at Arkansas’s two-year and four-year colleges and universities.
• Both the Revenue Stabilization Act and the Lottery Scholarship bills must be authorized by concurrent resolutions.
• In the spirit of a limited and cost-efficient fiscal session, the House intends to follow certain procedures. Those include Mondays being reserved for committee meetings of the Joint Budget Committee, the Rules Committee, and other House committees desiring to consider issues limited only to bills which were withdrawn by the author during the Regular Session for the purpose of further study.
• The House will convene at 12 p.m. on Monday, February 8. At 12:30 p.m., the House and Senate will convene in Joint Session.
• Regular course of business calls for the House to convene at 1:30 p.m. on Tuesdays, Wednesdays and Thursdays for action on bills referred by committee. Fridays will be reserved for Members to attend to constituency service.
• Further streamlining of fiscal session activities will include eliminating the consideration of simple resolutions; no ceremonial presentations will be conducted on the House floor; no House tours will be conducted, and no House pages will be used during the session.

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Committee on Performance Evaluation and Expenditure Review (PEER) – January 7, 2009

Posted on January 7th, 2010

Date & Time: Thursday, December 7, 2009 at 1:30 PM
Location: Room 171, State Capitol
Committee Information: Members on Committee
Agenda and Attachments

This committee reviews matters pertaining to the financial operations and fiscal performances of state agencies, departments, and institutions, including but not limited to, program performance and evaluation, efficiency in the operation of agency programs and services, coordination of programs and services which require the expenditure of state funds, the stability and adequacy of the various fund and fund accounts of the state, and other matters pertaining to agency performance and accountability in the use of public funds may be referred to this committee. Matters pertaining to the organization, consolidation, merger, or abolishment of a state agency, board, commission, or program, and such other matters as maybe assigned by the Council.

1:33 pm – Meeting called to order by Sen. Bryles. The first order of business is the December 2009 Revenue Report.

1:34 pm – After the revenue report was read… stunning silence. It is bad. Net Available for Distribution is down 4.2% Revenues are $55 million under the forecast adjusted on 10/20/2009. At that time, the forecast was $89 million under forecast from the session last spring.

1:37 pm – Corporate income tax collections are down 51.2% from the same month last year. Cigarette tax revenues are up 55.6% for the same period.

1:40 pm – Individual income tax collections are down 15.7%

1:41 pm – Budget hearing start next week, I think there will be alot of discussion about this at that time.

1:43 pm – Currently reviewing Cash Fund Appropriation Increase Requests. The one by the Department of Education generated questions related to the impact of the desegregation lawsuit results and how it will impact the schools. The current offer for settlement is for $430 million over 7 years.

1:47 pm – The Budget Classification Tranfer Request for the Arkansas Public School Computer Network was withdrawn by the Department of Education. They are delaying the purchase due to the software will no longer be supported after 2015. Sen. Malone is asking that because this DIS service is a cost recovery operation, how it can really be a realized savings for the purposes of a classification transfer. They explained that an additional reason for withdrawing the request is because of anticipated budget cuts.

1:52 pm – We are currently covering Federal Grant Appropriation Requests for FY10. A lot of these appropriations are pass through for the ARRA (Stimulus) Funds.

2:13 pm – There are alot of questions about the Arkansas Wireless Information Network upgrade from 7.2 to 7.5. This discussion was spurred by a pass through appropriation request from a federal grant.

2:15 pm – Rep. Dismang is asking about the Community Development Block Grant (CDBG) Disaster Assistance. He is asking if this can be done much quicker than the past grants have occured. He has experienced a lot of questions from constituents concerning how long it took to get the grants from the first flood.

2:27 pm – A lot of jumping around asking questions about the items for part E of the agenda. Most of the questions are informational with legislators seeking to understand the processes involved and how these grants are administered. The senior legislators like Sen. Bryles have been very patient with these sort of questions because they are critical in the era of term limits for legislators to understand what is going on. It does cause the meeting to go long and at times get off track, we learn a lot during times.

2:40 pm – Legislators again asking the questions to learn if the programs and the positions created by the Stimulus Funds will continue after the funds terminate. Again, we are being told that they will. It doesn’t seem that most legislators believe it.

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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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Highway Finance: New Revenue Subcommittee – December 16, 2009

Posted on December 16th, 2009

Date & Time: Tuesday, December 16, 2009 at 10:00 AM
Location: Room 272, State Capitol
Committee Information: Members on Committee
Agenda

10:06 am – Meeting called to order by Chairman Jim McKenzie. The minutes from the previous meeting were adopted as distributed.

10:08 am – We are currently reviewing the new policy briefs. The first one is an increase in Income Tax. In this policy suggestion, the so-called advantages are: “It is elastic and responds well to inflation without legislative adjustment. It is progressive, taxing those with a higher ability to pay at a higher rate. The so-called disadvantages are: “It is weak with regard to economic efficiency (it is inequitable) because it separates the users from the payers. The traditional recipients of general fund revenue have in the past strongly resisted using those revenues for transportation. The revenue potential is limited.” This tax requires a 75% supermajority of both houses to raise.

10:13 am – Now we are talking about a Gasoline and Diesel Excise Tax. The so called advantages. The so-called advantages are: “The gasoline and diesel excise taxes are a user fee and are the traditional way of funding roadway improvements. It is consistent with the user pay principle that has been the foundation of America’s highway system. Administration costs are low.” The so-called disadvantages are: “The motor fuel excise taxes are inelastic, therefore their purchasing power will decrease over time. Construction costs are projected to rise more rapidly than in the past two decades, eroding purchasing power more quickly. New federal fuel efficiency standards will reduce the productivity of the gasoline excise tax at an increasing rate as the next decade progresses. As alternative fuel vehicles, particularly plug-in hybrids and electric vehicles become more prevalent, motor fuel excise taxes will be unable to fairly capture the costs of these vehicles to the road network. Diesel fuel taxes may not be set at a rate that fairly captures the costs of heavy trucks to the road system.” This tax would require a 75% majority of both chambers to raise this tax.

10:21 am – The policy brief of Public Private Partnerships/Tolling was covered very very briefly even though it is one of the longest. The thought is that it is only applicable and successful in large metropolitan areas.

10:23 am -There is alot of discussion about the policy brief called the “Equitable Share for Heavy Trucks.” The policy brief claims trucks pay 6 cents/mile. Trucking industry records shows that they pay nearly 15 cents/mile.

10:28 am – Rep. Jon Woods sitting here beside me. He said, “If half the state knew what we were discussing today, the capitol would be overwhelmed with calls.” I agree. That is why I am doing this.

10:30 am – It seems that there is a lean toward some type of sales tax. Mr. Mike Wilson suggest that we may need to consider temporarily withdrawing from the streamline sales tax agreement. The phase in process hits snags due to the SSTA.

10:32 am – We are currently reviewing a computer model that demostrates the results of the revenue generating taxes. This is a spreadsheet that I should be able to get into my little fat fingers. I am wondering if there are any dynamic adjustment factors in the model. If I get the opportunity I will ask.

10:37 am – This model uses as a baseline of $290 million and includes purchasing power in the future out to 2020.

10:42 am – There is a model about the carbon tax. It was modeled as being phased in over 4 years of .25 cents per standard measure of carbon in the fuel being used.

10:49 am – Amost everyone is talking about significant inflationary increases. I wonder if that is because they know the impact of massive federal deficit spending. If so, they are not saying it.

10:52 am – One of the “advantages” of a carbon tax is that it is a “new” tax and can get through the Constitutional loop hole created by an unelected judge. New taxes only need to be passed by a simple majority rather than the supermajority required to pass or increase a tax. If the TEA Party is looking for something to get behind, a constitutional amendment to the state constitution to restore the original intent would be a great idea to consider.

10:57 am – There seem to be alot less willingness to speak up in support of new taxes these days like there were when we first started this committee. The chairman called for support and suggestions for any of the proposal. He was met with silence and someone said, “Don’t everybody speak at once..”

10:59 am – Mr. Mike Wilson suggests that instead to deciding which to promote why don’t they start eliminating a few of they do not think will work.

11:01 am – The point was made that Arkansas ranked like 8th nationallly in income taxes and perhaps that would not be one that should be considered.

11:05 am – Rep. Pennartz asked for a single table for the amount raised by each tax and the amount of the tax itself.

11:10 am – Committee adjourned.

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Legislative Joint Auditing – December 11, 2009

Posted on December 11th, 2009

Date & Time: Tuesday, December 11, 2009 at 10:00 AM
Location: Room 171, State Capitol
Committee Information: Members on Committee
Agenda

The duties of the Legislative Joint Auditing Committee shall be to provide for the auditing of each department, institution, board, commission, office, and agency of the state government for the purpose of furnishing the General Assembly with information vital to the discharge of its constitutional duties. (A.C.A. 10-3-407)

All reports mentioned in this post can be found here.

9:10 am – Meeting called to order by Rep. Johnny Hoyt. Minutes of November 12, 2009 adopted.

9:11 am – Rep. Monty Betts presented the Executive Committee Report which was adopted without question or comment.

9:12 am – Rep. Mike Patterson presented the report from the Committee on Counties and Municipalities. The report was adopted without question or comment.

9:16 am – Rep. Eddie Cheatham presented the report from the Committee on Education Institutions.

9:17 am – I can hear Christmas carols in the committee room coming from the Capitol Rotunda. Sounds beautiful. Children’s voices fill the capitol this time of year. I love it, this place comes alive like no other time.

9:18 am – Report by Rep. Cheatham adopted without questions or comments.

9:20 am – Rep. Jim House presented the report from the Committee on State Agencies. This report was adopted without question or comment.

9:22 am – Gail Stone, Executive Director of the Arkansas Public Employees Retirement System is presenting a report regarding instances in which county officials have retired and returned to work for the county.

9:24 am – So far there are seven county officials who have refused to return the questionaires and have hired an attorney.

9:26 am – In the report the following quote, “Despite some of the sensationalist media coverage to the contrary, we are happy to report that the number of elected officials that failed to properly vacated office prior to recieving APERS benefits is quite small” Yeah, that right there is an internal investigation conducted without bias.

9:30 am – Senator Bobby Glover made the point that with the drop, salary, and retirement combined, some of these guys were not double dipping, the were TRIPLE DIPPING.

9:31 am – When asked what laws should be put in place to prevent this in the future, APERS Executive Director responded that nothing needs to be done.

9:33 am – Rep. Gaskill asked if not for the courage of Rep. Kerr would this have goine on forever? APERS Executive Director confirmed that it probably would have just gone on and on.

9:36 am – Sen. Farris said that somebody took a law to do a good thing (allow the state to hire retirees for positions that are hard to fill) and snuck around the back door to find a way to abuse the system.

9:38 am – This is especially true of elected officials. If an elected official “retires” or otherwise “terminates” their employment, it is obvious to anyone that they have to resign and leave office.

9:41 am – Rep. John Burris is asking questions that are being avoided and unresponsively answered by the APERS Executive Director. Anytime you see this kind of obstruction, you can bet that more intensive investigation and diligence to get to the bottom of the problem is necessary. George Hopkins of the Arkansas Teacher Retirement system gave the honest and unobstructive first reaction to this. His position WAS one that was intent on providing the ethical resolution of this. He has since pullled back from that position. Gail Stone, Executive Director of APERS appears to be dragging out and obstructing this legislative investigation.

9:48 am – Ms. Stone initially claimed that no new laws were necessary, but after a line of questioning from both Rep. Burris and Sen. Jeffress it became clear that APERS did not consider particularly bad abuses to be “not illegal”. Doesn’t that point to a need for legislation?

9:52 am – Sen. Jeffress is asking if it would be appropriate to have an APERS perform a survey of all “Agency Heads and 99s”. He stated that in the form of a motion. There is currently wordsmithing going on. Ms. Stone said that she would comply “as much as I am allowed” then quickly said she misstated that and agreed to fully comply. What does that mean? “As much as I am allowed” by whom? Who would not be allowing her to comply.

9:57 am – Discussion is currently on the motion to perform the review. Rep. English asked that the motion to be amended to go back 3 years instead of one year for the investigation.

10:02 am – It is funny to me that legislators who never have concern for cost to taxpayers suddenly have a concern for cost when they want to use the argument to obstruct an investigation. Jim House is saying that he thinks this would be to costly too expand the investigation.

10:05 am – Motion by Rep. English to amend to the motion to go back 3 years instead of 1 year passed.

10:06 am – The point was made that even when this investigation is made we would not have names to connect to the violation due to confidentiality. That right there would be a good place to create some sunshine in government. This is an area that needs some openness and accountability.

10:08 am – Sen. Jeffress is asking that audit and APERS verify those who retired if they gave up the emollents of office (cell phone, car, etc.) during the waiting period before they came back to work.

10:11 am – The motion passed. A role call was made. Rep. Cheatham made the motion to roll call to kill the motion to help obsure and hide the facts and prevent this investigation. Rep. Allen Maxwell seconded the motion. Mark it down folks. This is the tricks used to prevent openness and accountablity in government. Are you tired of this kind of government?

10:17 am – Rep. Hoyt decided to use the authority of the chair to place that request for information without a vote of the committee. I am glad that Rep. Hoyt did that, but I find it sad that he had to do it that way. Some members don’t know how big a favor Rep. Hoyt did for them.

10:24 am – Sen. Kim Hendren is making the point the shroud of secrecy is NOT good government.

10:28 am – Sen. Farris asked Gail Stone if she was concerned enough about this situation when if first come up to ask about the appropriateness of it. She responded, “Not in an official capacity.” Sen Farris followed up and asked, why she maded that inquiry. She seemed very stressed, slowly answered … “it seemed they were winking at the law.”

10:37 am – This whole meeting I have been wondering why Gail Stone, Executive Director of APERS, seemed to be obstructing this legislative inquiry with guarded answers. Well, there is more to the story, perhaps she is not the “bad guy”. Apparently the Chairman of the Board of Directors for APERS is currently under investigation for this very thing. This person is Larry Fraetsi (spelling?) currently the Jefferson Co. Collector. So a person who is Ms. Stone’s boss has a direct conflicting interest in the situation. It seems a resignation is in order. I now feel sorry for Ms. Stone. She is in a tough position.

10:43 am – David Webb is presenting the report for the Department of Education Grants. Report can be found here Sen. Jeffress asked that the report be provided to the Education Committees. Rep. Nix asked how specific the limitation on the usage of these grants. Apparently those which are ARRA (Stimulus) Grants are very restrictive. Rep. English is asking about how the Title I Grants work, a response will be provided to her in a personal meeting.

10:49 am – Kim Williams is providing the Audit Report for Lonoke County. This report can be found here

10:57 am – Meeting adjourned.

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Joint Committee on Advanced Communications and Information Technology – December 8, 2009

Posted on December 8th, 2009

Date & Time: Tuesday, December 8, 2009 at 10:00 AM
Location: Room 151, State Capitol
Committee Information: Members on Committee
Agenda

The committee shall make continuing studies concerning the development of access to statewide public telecommunications network for distance learning, telemedicine, and universal access for governmental entities, and other issues concerning advanced communications and information technology, either initiated by the committee or referred to it by either house of the General Assembly for study, in the interim between sessions of the General Assembly. This committee shall review any plan developed or updated by a public instrumentality. The committee may seek the assistance of the Office of Information Technology of the Department of Information Systems in conducting this review. (A.C.A. 10-3-1704) The Committee shall exercise leadership in the interim between legislative sessions and shall attempt to coordinate for the various committees of the General Assembly the various activities, studies, and planning activities of the General Assembly which relate to the development of access to a statewide public telecommunications information infrastructure. The Committee shall cooperate with the Governor, with public secondary and postsecondary institutions of education, with the appropriate administrative agencies of this state, with legislative and administrative agencies and institutions of other states, and with the federal government and others in the planning and development of access to a statewide public telecommunications infrastructure linking institutions, businesses, government agencies, schools, hospitals, libraries, communities, and other public and private entities to the national information infrastructure. The Committee shall exercise appropriate legislative oversight of the operations of the Department of Information Systems. The staff of the Joint Committee on Advance Communications and Information Technology shall serve as staff liaison to the Department of Information Systems Advisory Board and the Department of Information Systems Steering Committee.

10:00 am – Meeting called to order by Senator Capps, Chairman.

10:01 am – The minutes from the August 6 and November 5th & 6th meetings.

10:08 am – Ken Gibson, Chief Information Officer for the Arkansas Department of Emergency Management is giving an overview of the Emergency Notification System to Arkansas citizens.

10:17 am – Questions from Rep Wood and Rep. Nix about municipal specific information.

10:18 am – Senator J. Jeffress is asking if the emergency notification system is using only land line numbers or if it also includes cellular. Mr. Gibson said that the system uses only 911 contacts for calls, but text messaging will go out to cellular users.

10:21 am – The Arkansas Dept. of Emergency Management does not make recommendations to what type of notification system a city should use, but they do recommend to citizens that you get a NOAA radio regardless of the system your city uses.

10:26 am – Don McDaniel, Network Manager of the Arkansas Department of Information Systems is presenting information on the Federal Broadband Stimulus Program Overview. This program is being administered through the U.S. Department of Agriculture’s (USDA) Rural Infrastructure Development Programs.

10:34 am – The best source of information about this program can be found at www.broadbandusa.gov.

10:37 am – Connect Arkansas is presenting information on the American Recovery & Reinvestment Act (Also known as “the Stimulus”) grant for the National Telecommunications & Information Administration of apporximately $2.1 million to Connect Arkansas ($1.6 million for broadband data collection and $500,000 for broadband planning and mapping activities).

10:47 am – Apparently Arkansas has applied for about $17 million in grants, other states have on average applied for $88 million. Because Arkansas is so far ahead of other states in developing this concept, it is hoped by Connect Arkansas that Arkansas will be obtaining additional future funds.

11:04 am – We are still meeting, I just have little interest in reporting on the little pigs oinking and jockeying for a position at the trough.

11:23 am – Committee meeting adjourned.

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