Legislators gear up for 1st fiscal session

’11 state budget, scholarships on agenda

— The state’s first legislative “fiscal” session starts Monday to take up Gov. Mike Beebe’s proposed $4.5 billion general revenue budget for fiscal 2011, set amounts of lottery scholarships and consider the governor’s idea for another rainy-day fund.

Beebe said also a big concern for him is the exploding Medicaid budget that Department of Human Services officials have said will require hundreds of millions of dollars in cuts over the next few years and will mean cuts in services to thousands of Arkansans.

“We’ve got our Medicaiddirector trying to work with everyone - providers, clients - to try to see what we can do to change,” Beebe said. “We’ve got unsustainable growth in Medicaid. We don’t have enough money in this state. We’ve got to change the way we’re doing this. I don’t have the answer.”

The session starts at noon Monday, with Beebe scheduled to address the House and Senate in the House chamber at 12:30 p.m. His address will be carried by Arkansas Educational Television Network stations and some community cable channels.

In the past, the Legisla-ture has met in odd-numbered years, and during every such session within memory lawmakers enacted the state budget, usually for the next two fiscal years.

But voters in 2008, to the amazement of some, adopted what has become Amendment 86, which requires the Legislature to meet annually. Referred to the people from the Legislature, the amendment authorizes budget-enacting sessions in even-numbered years and calls them “fiscal” sessions.

Such a session is limited to 30 days, with one possible extension of no more than 15 days. Legislators said that during this year’s session, they plan to largely stick to enacting the state budget for fiscal 2011, which starts July 1.

THE ISSUES

During a “fiscal” session, legislators can deal with nonappropriation bills if a twothirds vote of each chamber allows those bills to come in.

Beebe and lawmakers have said they expect only two such issues to come up this session:

Setting the amounts for the lottery scholarships for the 2010-11 school year.

Enacting the Revenue Stabilization Act, which distributes money for all general revenue agencies.

“I’ve been pleased,” Beebe said. “[Legislators] want it to be short and sweet. Pass the budget and the lottery scholarships and go home.”

Politics will add to the mix, with four legislators seeking higher office.

House Speaker Robbie Wills, D-Conway, and Sen. Joyce Elliott, D-Little Rock, are running to replace retiring U.S. Rep. Vic Snyder, DLittle Rock.

Sen. Gilbert Baker, R-Conway, who is co-chairman of the Joint Budget Committee, and Sen. Kim Hendren, RGravette, are running for the Republican nomination for U.S. Senate.

Beebe is seeking re-election but has no opponent so far.

The governor doesn’t expect election-year politics to affect the legislative session.

“They’re going to want to get in here and get out,” Beebe said.

Time at the Capitol means less time for them to raise money and campaign for the May 18 primary.

Beebe said he has agreed to accept the legislative push for lottery scholarships to be the same amount for current college students as they will be for entering college students.

Beebe and legislators had agreed on $5,000-a-year scholarships at four-year colleges and $2,500 scholarships at two-year colleges for entering students.

But legislators had sought that same amounts for existing students. Beebe had urged smaller amounts for them.

“We all want the maximum amount of money to go to the maximum amount of kids as possible,” Beebe said. “I want to do it but make sure we don’t have to cut it later. I’m probably a little more conservative. But if [legislators] are satisfied that their numbers are not overly liberal, and if they are satisfied we won’t have to cut back on what we promise kids, then I’m willing to give it.”

PROJECT MONEY

There has been broad agreement on most aspects of the budget, but a few issues remain.

The governor has called for legislators to give up 25 percent of the funding going to their chosen projects out of the General Improvement Fund. That amounts to $15 million of the Legislature’s $60 million share of that fund.

Legislators last year agreed to hold that money in case it’s needed to fill in for budget shortfalls.

Beebe wants to channel most of that to reimburse county jails for holding state prisoners.

For example, the governor’s plan would cut:

Construction money for Henderson State University from $250,000 to $187,500.

Fire-protection grants from the Natural Resources Commission from $150,000 to $112,500.

Skin-cancer awareness grants from $20,000 to $15,000.

Some Republican legislators have complained, saying that Beebe should give upsome of his $113 million share of the General Improvement Fund for state projects.

Beebe said he wouldn’t look kindly on that idea and would specifically oppose giving up any of the $50 million Quick Action Closing Fund for industrial incentives.

“Most of that money is going to create jobs and economic development, andit’s worked,” Beebe said.

Beebe has also proposed that $34 million in general revenue be placed in an extra discretionary, or rainy day, fund for him to direct to areas of state government hit by shortfalls.

Some legislators such as, Rep. Bruce Maloch, D-Magnolia, co-chairman of the Joint Budget Committee, don’t see the point to that. Maloch said that money should be budgeted like it has been in the past to go to state agencies instead of being put under the governor’s control.

Beebe said he’s willing to give in on that point.

“I am very sensitive to overreaching because I spent 20 years in the [state] Senate,” Beebe said. “[Legislators have] given me more authority than they’ve given any other governor. I’m sensitive to the fact that I don’t want to be seen as wanting even more.”

The Legislature in 2009 granted Beebe $40 million of the General Improvement Fund for a rainy day fund for him to use at his discretion in fiscal 2010.

Of that, Beebe spokesmanMatt DeCample said the governor has committed:

$15 million for the Department of Correction.

$16 million for Medicaid.

$1 million for miscellaneous agencies.

$600,000 for radios for law enforcement.

He also wants to spend $1.1 million for the Children and Family Services Division in 2011, leaving $6.3 million. The Legislature would have to reappropriate the money during the fiscal session if the governor wants to use it in 2011.

In addition to Medicaid, Beebe said, he’s worried about the prison budget, which keeps expanding.

“We can’t continue to build prisons, but we’ve got to keep bad guys locked up, violent criminals,” Beebe said. “We’ve got to figure out how to punish nonviolent criminals without taking up bed space.”

Beebe said he wants to address Medicaid and prison policy during the 2011 regular session, which will start next January.

Baker said he expects a “fairly smooth” fiscal session but expects “a lot of discussion” about the governor’s discretionary fund idea.

Maloch said he expects the fiscal session to last no longer than 24 days.

He said that “absolutely we will take care of” the county jail reimbursements. But, he said, some legislators would prefer getting the money from some other place to safeguard their General Improvement Fund projects.

Maloch said he wants a rainy day fund for 2011 but wants to figure out a different way to do it than Beebe has proposed.

Front Section, Pages 1 on 02/07/2010

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