Recently, Dr. David T. Mitchell from the Arkansas Center for Research in Economics authored a guest column in this newspaper titled "Rainy days ahead."
Dr. Mitchell's column mischaracterized the state's current financial situation and ignored the substantial reserves Arkansas has built up over time. When I took office, the Long Term Reserve Fund was empty. Today, it has a balance of approximately $152.5 million and is expected to grow larger. This is in addition to the Restricted Reserve Fund, the General Allotment Reserve Fund, the Medicaid Trust Fund, the Public School Fund, and other set-aside funds we have available to call upon if needed.
Contrary to Dr. Mitchell's assertion, the Long Term Reserve has never funded any projects. There are strict guardrails which prevent the spending of the Long Term Reserve Fund. That fund was created to protect against the next economic downturn, and that fund has not been used for any of the projects he referenced.
Perhaps Dr. Mitchell is confusing the Long Term Reserve Fund with the General Improvement Fund, which for years allowed public dollars to be spent on projects with no oversight or accountability. That fund no longer exists.
I have funded numerous projects throughout the state of Arkansas from my discretionary Rainy Day Fund, which was approved by the Legislature. Each payment from that fund is either reported to or approved by the Arkansas Legislative Council. This resource has funded projects at institutions of higher education; provided grants for drug task forces; started construction for a new fire training academy; built a driving training track for law enforcement; and supported a veterans' legal clinic.
These are just a few examples of the utilization of this fund; however, those projects in no way took away from the needed reserves.
Dr. Mitchell and I do agree on one point--the taxpayers of our state deserve a system of prioritizing spending around our most important programs such as Medicaid and education. Those priorities are central to why Arkansas has adopted and protects its Revenue Stabilization Act. This act ensures that our most critical programs are funded first.
History shows that our system of fiscal responsibility works. Since 1992, the state of Arkansas reported annual budget surpluses 18 times. We only cut budgets five times despite economic downturns such as the 2008 recession.
Personnel at the Department of Finance and Administration work diligently to be aware of issues which might affect the economic stability of our state, and I am thankful for their work. I am cognizant of the need to save for a rainy day and while we hope another recession does not occur, the state of Arkansas is prepared.
Asa Hutchinson is governor of the state of Arkansas.
Editorial on 11/21/2019
Print Headline: Prepared for rain