Bills that would set the state government's general-revenue budget for the coming fiscal year and the distribution of up to $225 million of surplus funds from previous years zipped through the Arkansas House and Senate on Friday.
The Senate voted 23-0 to approve Senate Bill 295, which would distribute $5.49 billion in general revenue to state programs in fiscal 2018 through the Revenue Stabilization Act.
The budget is a $163 million increase over the amount slated for this fiscal year, which ends June 30. The bill goes to the House. The House voted 88-5 to approve House Bill 1548, which is identical to SB295. That bill goes to the Senate.
Most of the increased spending in fiscal 2018 would be targeted for the state Department of Human Services under the bill, which resulted from negotiations among legislative leaders and Gov. Asa Hutchinson. The Human Services Department's general-revenue funding in fiscal 2018 would be $1.55 billion, an increase of $112.8 million over fiscal 2017.
Sen. Bryan King, R-Green Forest, told senators that the Legislature should wait for a few more months of general-revenue collections before enacting a budget for fiscal 2018 because the state has been spending too much money and general-revenue tax collections are lagging the forecast so far in fiscal 2017.
Delaying action on the budget also would allow lawmakers to "know what the health care situation is" with the state's Medicaid expansion, called Arkansas Works, he said.
Net general revenue available to state agencies fell $15 million short of forecast through the first eight months of fiscal 2017. Paul Louthian, a deputy director of the state Department of Finance and Administration, told lawmakers Wednesday that it appears general-revenue collections will lag the state's forecast in March because of a federal change in the filing date for corporate income tax tax returns that the state has matched.
Also, the 2015 Legislature enacted individual income tax rate cuts that are projected to reduce state general revenue by about $100 million in fiscal 2017.
Afterward, Senate President Pro Tempore Jonathan Dismang, R-Searcy, said the state's Revenue Stabilization Act sets spending priorities in state government and if state general-revenue tax collections "don't come in the way it is projected to, then there is a B category where items can be trimmed back" and the law includes $15.8 million in rainy-day funds.
Dismang said Friday that the fiscal 2018 forecast is fairly conservative.
So far in fiscal 2017, "you've got a number of different adjustments that seems to be hitting month after month which should have us all concerned," he said. "From what we understand through our staff, they feel as though we're ultimately going to hit the forecast and ultimately be above forecast," Dismang said.
In other action Friday, each chamber approved identical bills that would allow for the distribution of $225 million of surplus funds accumulated from previous years.
Senate Bill 552 and House Bill 1830 would allow, among other things, for the use of up to $90 million for the Medicaid program, up to $60 million for public school facilities and up to $30 million to the Arkansas Economic Development Commission for the Quick Action Closing Fund for incentives to attract new business and economic development.
They also would allow for the use of up to $20 million to ensure that the state has about $47.5 million to match $200 million in federal highway dollars available this fall under a new federal highway law; $12.9 million to the state's "rainy-day" fund; and up to $10.5 million for state Department of Correction lease payments tied to debt service for prisons in Malvern and Newport.
The Senate approved SB552 25-2 and sent it to the House. The House voted 82-0 to approve HB1830 and send it to the Senate.
A Section on 04/01/2017