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Path cleared to tap covid-19 rainy-day fund for crisis units

by Michael R. Wickline | June 24, 2020 at 3:36 a.m.

Legislative leaders have signed off on Gov. Asa Hutchinson's request to tap the covid-19 rainy-day fund for about $2 million for the crisis stabilization unit programs in four counties in Arkansas.

The pilot programs are in Craighead, Pulaski, Sebastian and Washington counties.

The programs provide a needed alternative to jail for people who are suffering a mental health crisis and are behaving in a way that appears to be threatening to others, state Department of Human Services Secretary Cindy Gillespie said in a letter to Larry Walther, secretary of the Department of Finance and Administration.

Gillespie's department requested $2.036 million for the programs, "recognizing the hardship [that] significantly reducing ... funds would have on the operations plans of these pilot programs," Gillespie wrote in her June 3 letter.

"Funding for these pilot programs have relied on a combination of rainy-day, agency carry-forward and 'B category' state general revenue," she said. "Recent reductions and lower forecasts for [fiscal year] '21 state general revenue for next fiscal year threatens the operation of these pilots."

Scott Hardin, a spokesman for the finance department, said Tuesday that $2.5 million in general revenue was originally allocated through the Revenue Stabilization Act in Category B in fiscal 2020 for the crisis stabilization units, and "it was cut through the revised forecast.

"This request will help fill that cut," Hardin said. Fiscal 2020 ends Tuesday.

The crisis stabilization units had $1.4 million from a previous rainy-day release, along with $2.1 million from a carry-forward of unspent general revenue from the previous year, he noted.

"This covid rainy-day fund gives them $5.6 million in certified funds now," Hardin said. "Before March 25th, the agency had $6.09 million budgeted."

With $2 million in covid-19 rainy-day funds, the estimated reimbursement for fiscal 2020 will be allocated with $532,000 apiece for Craighead, Pulaski and Washington counties, and $440,000 for Sebastian County, Gillespie wrote in her letter to Walther.

[CORONAVIRUS: Click here for our complete coverage » arkansasonline.com/coronavirus]

In a March 26-28 special legislative session, the Legislature and Hutchinson enacted legislation to transfer $173 million in surplus state funds to the newly created covid-19 rainy-day fund. The governor is allowed to tap those funds with the approval of at least two of three legislative leaders or their designees in both the House of Representatives and Senate.

Senate President Pro Tempore Jim Hendren, R-Sulphur Springs, said Tuesday that he, along with Senate Republican leader Bart Hester of Cave Springs and Senate Democratic leader Keith Ingram of West Memphis, signed off on the funds for the crisis stabilization units.

House spokeswoman Cecillea Pond-Mayo said House Speaker Matthew Shepherd, R-El Dorado, and House Democratic leader Fred Love of Little Rock also signed off on the funds request.

About $148.6 million remains in the covid-19 rainy-day fund, after it was tapped for the money for the crisis stabilization units, Hardin said.

The covid-19 rainy-day fund was created to fill budget holes and unanticipated needs spawned by the covid-19 pandemic. The finance department on March 23 trimmed the state's fiscal 2020 general revenue budget by $353.1 million, to $5.38 billion.

To justify the budget cut, the governor cited projected declines in general revenue collections, and his extension of the individual income tax filing and payment deadline from April 15 to July 15 -- which is in fiscal 2021 -- to match a step taken by the federal government. But state tax collections instead exceeded projections through the end of May.

So far, Hutchinson hasn't announced any changes to the general revenue forecasts for fiscal 2020 or 2021.

In the fiscal session in April, the Legislature enacted a $5.89 billion general revenue budget for fiscal 2021. The latest general revenue forecast would provide $5.68 billion for that budget and leave $212.2 million unfunded.

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