With the aim of wrapping up the regular session today, the Arkansas House and Senate on Tuesday handily approved identical bills that would distribute the state's proposed general revenue budget of $5.75 billion to various programs in the fiscal year starting July 1.
The chambers also approved companion bills that would distribute up to $54.6 million in state surplus funds to several projects and up to $30 million in surplus funds for the governor to spend on projects.
The House and Senate bills are each expected to receive final approval by the other chamber today. Tuesday was the 86th day of the 92nd General Assembly.
In a 90-5 vote with no debate, the House approved House Bill 1876 -- the Revenue Stabilization Act for fiscal 2020 -- and sent the bill to the Senate.
In a 35-0 vote with no debate, the Senate approved identical legislation -- Senate Bill 597 -- and sent it to the House.
The bills would distribute $5.75 billion in general revenue to state-backed programs -- a $124.1 million increase over fiscal 2019's budget. Most of the increase would be targeted for human services and education programs. The primary sources of general revenue are individual income taxes and sales and use taxes.
[RELATED: Complete Democrat-Gazette coverage of the Arkansas Legislature]
The proposed budget is a 2.2 percent increase over the current budget, and that's the lowest increase in the past 10 years, a Joint Budget Committee co-chairman, Rep. Lane Jean, R-Magnolia, told representatives.
The 2.2 percent increase would be well below the average increase of 3.2 percent over the last 20 years, state Department of Finance and Administration spokesman Scott Hardin said. The average increase has been 2.6 percent a year over the past five years and 2.4 percent over the past 10 years, he said.
Most of the increase in fiscal 2020 would go to the state Department of Human Services, which would get a $68.2 million increase to $1.73 billion, and the Public School Fund, which would get a $30.7 million increase to $2.25 billion.
The proposed Revenue Stabilization Act would divide the projected general revenue into A, B and C categories, with $5.61 billion going to Category A, $115.6 million to Category B and $14.7 million to Category C.
The top spending priorities are placed in Category A, and the other categories are of lesser spending priority. Funding to Category B only flows after Category A has been fully funded, and funding to Category C only flows after Category B has been fully funded. The goal of the act is to prevent deficit spending.
Category B includes $61.6 million for the Medicaid program and $30.8 million for general education in the Public School Fund. Category C is $14.7 million for the state's Performance Fund, which was formerly called the Merit Adjustment Fund.
The proposed budget relies on using existing fund balances of $25 million from the state's Performance Fund for performance-based raises, and other raises for certain employees such as those at the Arkansas State Police in the next fiscal year, state officials said.
The budget for the Human Services Department includes a $61.6 million increase, to $1.31 billion, in the grants category for the Medicaid program. It also includes $2.5 million for crisis stabilization units that are designated as a temporary place to send people with mental health emergencies.
The proposed Revenue Stabilization Act would give a $7.8 million increase to $360.9 million for the Department of Correction; a $5.5 million rise to the Department of Community Correction to $93.4 million; and a $5.2 million increase to $71.6 million for the Arkansas State Police.
Public two- and four-year colleges would get a $4.1 million increase to $749.7 million as a result of higher education's productivity funding formula and other increases for higher education entities.
The House and Senate on Tuesday also approved identical versions of bills that would distribute surplus state funds through the state's rainy-day fund.
The House voted 84-10 to approve House Bill 1865, sending it to the Senate.
The Senate voted 35-0 to approve Senate Bill 595, sending it to the House.
Under HB1865 and SB595, the state treasurer is required to set aside the first $54.6 million of the funds transferred and credited to the rainy-day fund for the following debt obligations and projects:
• Up to $30 million to the Quick Action Closing Fund for incentives to attract new business and economic development.
• Up to $10.5 million to the Department of Correction for lease payments for prison projects.
• Up to $10 million to the University of Arkansas for Medical Sciences' National Cancer Institute Designation Trust Fund.
• Up to $1.86 million for the University of Arkansas Division of Agriculture.
• Up to $1.8 million to the state Department of Education for the Succeed Scholarship program.
• Up to $500,000 to the state Military Department for the Youth Challenge program.
HB1865 and SB595 would provide up to $30 million in rainy-day funds to the governor, who would be able to release the funds for certain projects requiring legislative approval and others requiring legislative review, according to a legislative staff member.
Information for this article was contributed by Hunter Field and John Moritz of the Arkansas Democrat-Gazette.
A Section on 04/10/2019