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$133 million rise in spending OK'd by budget panel

by Michael R. Wickline | March 31, 2015 at 3:01 a.m.

Bills that would boost state general revenue spending by $133 million to $5.18 billion in fiscal 2016 sailed through the Arkansas Legislature's Joint Budget Committee on Monday.

The committee also endorsed measures that would distribute $243 million through the General Improvement Fund -- which is made up of mostly surplus state funds -- for various programs and projects ranging from Medicaid to pre-kindergarten programs.

The House and Senate will consider these four bills in the next two days as legislative leaders aim at ending the session on Thursday.

In a voice vote with no lawmakers objecting, the Joint Budget Committee endorsed identical bills that would distribute $5.18 billion in state general revenue to state programs in the fiscal year starting July 1. Lawmakers asked no questions and had no debate.

The bills are Senate Bill 689 by Sen. Larry Teague, D-Nashville, and House Bill 1548 by Rep. Lane Jean, R-Magnolia.

They would increase state general-revenue spending to the Public School Fund by $49.5 million to $2.16 billion in fiscal 2016 and to the state Department of Human Services by $80.2 million to $1.33 billion in the next fiscal year.

The Department of Correction would get a $14.3 million increase in state general revenue to $336.6 million and the state Department of Community Correction would get a $1.7 million boost to $78.6 million under the bills. County jail reimbursements would increase from $16.4 million to $27.8 million.

The state's two- and four-year colleges and technical institutes would receive the same amount that they are getting in the current fiscal year: $733.5 million.

Some of the spending increase is offset by cuts to other agencies.

The proposed general revenue budget factors in a $6 million state general revenue reduction in fiscal 2016 resulting from legislation that will restore capital gains tax cuts repealed earlier this session. It also creates a $4.3 million rainy-day fund.

The budget calls for several program cuts to free up rainy-day funds while also making up for the revenue lost because of the capital-gains tax cut. The biggest reductions include a $4.95 million cut in the state Department of Health for grants to community health centers, and a $2.5 million reduction to the Arkansas Science and Technology Authority for Accelerate Arkansas grants, state officials said.

Act 22 -- enacted earlier this session to reduce income tax rates for Arkansans with taxable incomes between $21,000 and $75,000 a year and repeal certain capital gains tax cuts enacted in 2013 -- is projected to reduce state general revenue by $25.5 million in fiscal 2016 and $90.3 million in fiscal 2017, the state Department of Finance and Administration said.

"I think overall each side can claim a little bit [of success on the budget's priorities]," Jean said, referring to increased spending for the Medicaid program, public schools and prisons in fiscal 2016 and a $102 million tax cut in fiscal 2017.

"Is it a perfect budget that everybody likes? No. But I think it is a good budget," said Jean, who is the House's chairman of the Joint Budget Committee.

But he added, "We have got to rethink things, prioritize and be more efficient [in state government], and this gives the governor a full year to look at that." Republican Gov. Asa Hutchinson was sworn in on Jan. 13.

Mary Leath, chief executive officer for the Community Health Centers of Arkansas, said leaders of the state's 12 community health centers and more than 100 clinical and dental sites "are deeply disappointed in the leadership's decision to remove all funding that ensured the stability of a network of primary care providers in our underserved areas, with over 177,000 patients treated last year."

Hutchinson, "when running for office, committed support of the largest network of primary care providers in our state and recognized the value and essentialness of our medical care in the rural corners of our state," Leath said in a written statement. "We are uncertain as to why he, along with legislative leaders, chose to destabilize this network that serves our farmers, our young families, our elderly residents [and], our low-wage earners."

Hutchinson spokesman J.R. Davis said the governor recommended stable funding for the federally qualified health centers in his proposed budget for fiscal 2016, but "changes were made that reduced this funding" during his discussions with the Legislature and the drafting of the Revenue Stabilization Act.

"This will be part of the broader discussion by the Healthcare Task Force as it takes a comprehensive look at our Medicaid program and healthcare delivery in Arkansas," Davis said in a written statement.

Teague, who is the Senate's chairman of the Joint Budget Committee, said the community health centers do "good work in Arkansas, but the truth of the matter is we had a hole we had to fill and that was a big chunk of money and we took it."

Arkansas State University System President Chuck Welch said he's pleased that the proposed general revenue budget in fiscal 2016 reflects "no cuts for our higher education institutions.

"I greatly appreciate Governor Hutchinson for his commitment to maintaining level funding for higher education and for his hard work during the session to hold true to that pledge," Welch said in a written statement.

Identical measures distributing $243 million through the General Improvement Fund also cleared the Joint Budget Committee without question or discussion from lawmakers.

They are SB691 by Teague and HB1547 by Jean.

The bills would distribute $90 million to the state Department of Human Services for the Medicaid program, $40 million to the state Division of Public School Academic Facilities and Transportation, $20 million to the Arkansas Economic Development Commission for the Quick-Action Closing Fund for incentives to attract industry to the state, and $20 million each to the governor and the Legislature for discretionary projects.

They also would distribute $16.5 million to the state Department of Correction to provide more space to house inmates; $15.8 million to the Department of Community Correction for transitional re-entry services, more probation and parole officers and accountability court grants; and $13 million to the Department of Correction for lease payments.

The bills also would distribute $5 million to the state Department of Education for computer science initiatives and $3 million to the department for the Arkansas Better Chance pre-kindergarten program.

In addition, the measures would distribute up to $50 million in surplus funds to rainy-day funding and up to $30 million to the Quick-Action Closing Fund if the state collects more than forecast in the current fiscal year.

State Sen. Joyce Elliott, D-Little Rock, said the $3 million in surplus funds devoted to the pre-kindergarten program "is a first step.

"When we say [the children in the program] are our priority, we need to mean that they are our priority because we are putting far more in prisons than we are in pre-K and that's the result of misplaced priorities over the years -- not just in this administration," she said.

Metro on 03/31/2015

Print Headline: $133 million rise in spending OK'd by budget panel

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