Fiscal-session debate: Winner or waste?

LITTLE ROCK — The state’s first “fiscal” legislative session for budget matters ended last week to mixed reviews.

Gov. Mike Beebe says it went about as well as could be expected.

House leaders say they’re proud of how they kept it limited.

The senator who sponsored the resolution putting the idea on the ballot in 2008says it’s a good thing for Arkansas and will forever allow for more accurate budgeting.

But the Senate’s leader says it was a big waste of time.

“Idle time is a dangerous thing in the Legislature,” said Senate President Pro Tempore Bob Johnson, D-Bigelow. “You have 135 members, with only a small portion of those directly engaged and involved [in a fiscal session]. The balance are looking for something to do.”

The fiscal session is required by Amendment 86 to the state constitution, passed overwhelmingly by the voters in 2008, much to the surprise of many who considered it an unnecessary duplication of the usual legislative process.

Beebe and legislative leaders say they wanted to restrict fiscal-session agenda topics, believing that the voters intended the focus to be limited mostly to passing a budget for fiscal 2011.

The amendment makes it harder to discuss anything else. A two-thirds vote in each house is the only way for the Legislature to even consider a nonbudget bill.

Beebe opposed the amendment but has since accepted the idea.

“Could we have gotten by without it? Yeah,” the governor said. “Was it helpful in some measures because we had it? Yeah. The peoplevoted. I’m going to stick with the people.”

The fiscal session began Feb. 8 and lasted 18 days, ending Thursday. The House will return this Thursday to choose its speaker for the 2011 regular session.

House Speaker Robbie Wills, D-Conway, is term-limited from seeking re-election to the House.

The two House members up for speaker are Reps. Robert Moore, D-Arkansas City, and Johnnie Roebuck, D-Arkadelphia.

Amendment 86 requires the Legislature to set a budget on an annual basis.

Previously, the state’s budget cycle ran two years, with each being approved during the regular session, which started in January of oddnumbered years.

Now, regular sessions set budgets for only the coming year, not the year after that. That year’s budget comes up during the fiscal session, which is in even-numbered years.

‘WE DID OUR WORK’

During the fiscal session, the Legislature approved a $4.48 billion general-revenue budget for fiscal 2011, a 4 percent increase from 2010. The 2011 budget is on par with the fiscal 2008 budget because of two years of declining revenue in fiscal 2009 and 2010.

The only nonbudget matter taken up was legislation to set the lottery-funded scholarships at $5,000 a year in four-year universities and $2,500 a year in twoyear colleges.

That left many legislators not involved in budget or lottery issues with little to do.

Sen. Bill Pritchard, R-Elkins, and former Rep. Eric Harris, R-Springdale, were the lead sponsors of the resolution in 2007 referring thefiscal-session amendment for voters to approve in 2008. It passed 643,072 to 283,427.

Some thought voters may have been misled by the amendment’s referring to one-year appropriations and thought they were limiting legislative power.

But Pritchard and Harris have said that voters understood they were allowing for annual budgets, something t h ey say i s common sense in the business world.

Pritchard said the fiscal session “went extremely well” and that supporters of the idea were “vindicated” because the Legislature kept a limited focus, avoiding tackling too many issues.

In promoting the amendment, Pritchard in 2008 said annual sessions could lead to tax cuts, but that didn’t happen this fiscal session. No effort was made to cut taxes because the recession has led to tight budgets, legislators said.

“I think we got down here and we did our work and I think it was a very good success,” Pritchard said. “It eliminated the governor from having to call a special session.”

Beebe spokesman Matt DeCample said he couldn’t say whether Beebe would have called a special session without the fiscal session happening. DeCample said it’s impossible to “retroactively hypothesize” about what could have been done differently during the 2009 regular session if the fiscal-session amendment had failed.

The House estimated its expenses at $15,000 a day during the fiscal session beyond normal operating costs. The Senate had no such estimate.A Senate spokesman referred to the Bureau of Legislative Research’s estimate of about $22,000 a day.

The bureau’s assistant director, Kim Arnall, said that figure was produced as an estimate of 2009 regular-session costs. He said there is no updated figured for the fiscal session.

Sen. Steve Faris, D-Central, said there were few things done during the fiscal sessionthat weren’t already done during the 2009 session.

“I think we ended up rubber-stamping most of the work we did in the regular session,” Farissaid. “There is no way it’s worth the money.”

Most of the budgets adopted during fall 2008 budget hearings were again approved during the fiscal session but at lower funding levels because of drop-offs in tax collections.

There were a few exceptions:

Freezing pay for state elected officials, including judges, constitutional officers, legislators and prosecutors.

Setting aside $25 million from the Budget Stabilization Trust Fund, a kind of bank account the state uses to pay bills, to ensure the state can pay income-tax refunds this fiscal year.

Shifting about $7 million from one-time projects to cover reimbursements to county jails.

Approving a $4.48 billion general-revenue budget in the fiscal 2011 Revenue Stabilization Act. Legislators likely would have approved a larger 2011 budget based on economic information available had they made that budget in 2009. Some legislators say it wouldn’t have mattered because the state’s Revenue Stabilization Act would have automatically cut agency budgets anyway if the money wasn’t there. Others said it was good to have a smaller budget devised annually sostate agencies won’t be planning to spend more.

“I personally couldn’t be happier with the way things have gone,” Wills said. “I challenged our House members to get in, get the job done, and now it’s time for us to get home.”

MEDICAID

Sen. Randy Laverty, D-Jasper, argued that the Legislature should have stayed longer to address the looming crisisin Medicaid funding.

Beebe has said $400 million needs to be cut from the program in fiscal 2011.

Most legislators said they didn’thave time to deal with that in the fiscal session, but they added a requirement for the Department of Human Services to inform the Public Health committees in the coming months before changes are made. They’ve also said they can take up the issue in 2011.

Human Services Director John Selig said last week that the Medicaid budget situation isn’t as bad as initially thought because of expected money for Medicaid in 2011 from a legal settlement and from the federal government.

“Just because it’s not going to be as bad as we thought in Medicaid doesn’t mean that there is not a long-term problem,” Beebe said.

He said his administration is looking at eliminating a billing system whereby the state reimburses Medicaid providers for “fees for services.” He said that creates multiple payments and billings and increased administration cost. Instead, he’s studying whether to reimburse based on one accepted cost of treating a person with a particular diagnosis.

He said state Surgeon General Joe Thompson came up with the idea but the state would have to get federal approval.

Beebe on Friday signed the remainder of the bills passedduring the fiscal session, with one exception.

DeCample said the only bill left is Senate Bill 130, which Beebe has said he may veto.That would send $1.6 million from the state Central Services Fund to the secretary of state’s office to pay for legislative redistricting. Beebe has saidhe’s concerned about the financial stability of that fund. DeCample said Beebe will decide Monday what to do.

Beebe signed two lottery bills setting scholarship amounts. They were identical with the only exception beingthat the House bill, sponsored by Wills, was named after former legislator Jodie Mahony, who recently died. The other one, sponsored by Sen. Mary Anne Salmon, D-North Little Rock, didn’t contain Mahony’s name.

Beebe signed Salmon’s last, making it Act 294, the governing law. DeCample said Beebe did that after a request by Salmon. DeCample said that Mahony’s name only appeared in the subtitle of Wills’ bill so Mahony’s name wouldn’t have been codified in statute anyway even if Wills’ bill had been signed last.

Information for this article was contributed by Michael R. Wickline of the Arkansas Democrat-Gazette.