Legislative leaders have approved Gov. Asa Hutchinson's request for $883,349 from the covid-19 rainy-day fund for the state Crime Laboratory, while two Senate leaders blocked approval of his request for $825,000 out of the same fund for Henderson State University.
Larry Walther, secretary of the state Department of Finance and Administration, said Monday in a letter to lawmakers that "pursuant to these actions," the remaining balance in the covid-19 rainy-day fund is $151.5 million.
Senate President Pro Tempore Jim Hendren, R-Sulphur Springs, and House Speaker Matthew Shepherd, R-El Dorado -- along with House and Senate Democratic and Republican leaders -- signed off on the request for the Crime Lab, House and Senate officials said.
Jami Cook, secretary of the state Department of Public Safety, in a letter dated Friday to Walther, sought funds to maintain operations through the remainder of fiscal 2020, which ends June 30.
She said $1.3 million of the Crime Lab's general revenue funding was cut in state government's March 23 budget reduction.
Cook said the $883,349 will cover the last three payroll cycles of fiscal 2020, insurance matching funds to be paid in June and "outstanding obligations for the purchase of consumables, supplies and recurring utility bills."
"The Crime Lab has taken every precaution during the pandemic to only spend what was necessary for the daily operations of the agency," she wrote.
Shepherd and House Democratic leader Fred Love of Little Rock approved the governor's request of $825,000 for Henderson, while House Republican leader Marcus Richmond of Gravelly rejected the request, said House spokeswoman Cecillea Pond-Mayo.
Hendren and Senate Republican leader Bart Hester of Cave Springs said they rejected the request, while Senate Democratic leader Keith Ingram of West Memphis said he approved it.
Under a state law approved in the March 26-28 special session, the consent approval of two of three leaders or their designees in the House and Senate is required to approve requests for the covid-19 rainy-day money.
Hendren said Monday that he decided to deny the request for Henderson in part because he was clear to senators when he presented the bill creating the fund in the special session that "this two out of three legislators on both [ends of the] approval process was only going to be used in an emergency when there was not time to go through the normal processes."
"I didn't feel like a request for [funds from] an institution of higher ed to prevent furloughs several weeks down the road was in the spirit of approving that under those emergency procedures," he said.
Hendren said the governor's request should have been presented to at least the Legislative Council and preferably both the Legislative Council and its Performance Evaluation and Expenditure Review Subcommittee, "so that was the first problem and really the major problem."
"I am not certain whether or not that's the best use of our covid-19 rainy-day fund, and so if I am not certain and it's not an emergency, it needs to have more fleshing out through the regular process," he said.
The subcommittee met last Wednesday and the council met Friday.
Hendren said his second reason for rejecting the governor's request for Henderson is because "we all know that we were just in the process of getting ready to have some [legislative] hearings on Henderson State about [its] financial irregularities and the management oversight."
"While we don't want to punish those that had nothing to do with that, we also have to have certainty that any future dollars are going to be well-managed," Hendren said. "We don't have that. There is a lot of members who still are uneasy about what is going on there. Until those questions are answered, I wasn't comfortable approving it.
"There is nothing to say that [Legislative Council] could not approve that request still," he said. "Now, we don't have another meeting until June and that may be too late. But if there were a request and a desire, we have proven we can meet now. ... So if it's urgent and they feel like they want to present that, I would be willing to accommodate it, a meeting [of the Legislative Council], if that's important. I am not going to make a practice of approving rules under that emergency process when the normal process is available."
Hutchinson is Hendren's uncle.
Hester said he rejected the request for Henderson because "we have a supply-and-demand issue," and there isn't enough demand for students to attend the university.
"If the numbers don't work, the numbers don't work," he said.
Hester said students have other options, such as the state's other higher-education institutions.
Ingram said he approved the request because he doesn't want to punish Henderson's employees for the sins of the university's previous administration.
Arkansas State University System President Charles Welch and Henderson's acting President Elaine Kneebone said in an April 30 letter to the governor that it appeared Henderson was on the road to a financial recovery when the pandemic hit.
They wrote that the requested funds would "avoid the need for furloughs of Henderson employees this fiscal year," they wrote in their letter.
"Henderson has already implemented the deepest cuts in spending possible without fundamentally disrupting its core operations," Welch and Kneebone wrote.
Hutchinson on Monday reiterated his support for Henderson.
"I realize they have made mistakes in the past, but we don't want to penalize the future for mistakes that might have been made in the past," Hutchinson said in a written statement. "We want to correct things.
"We want to have them on a good foundation for the students' future and the future of that school, that I believe is important for the state," the governor said. "I know there was some concern by the two senators that this issue should go to the full [Legislative Council]. We hope to have further discussions on the right way to proceed with this request."
The general revenue budget for fiscal 2020 was cut by $353 million to $5.38 billion, citing the shift of the state's individual income tax filing and payment deadline from April 15 to July 15 and a projected reduction in tax collections in the last three months of the fiscal year because of the pandemic.
Beyond the planned transfer to the Crime Lab, the rainy-day fund also has been tapped for $15.4 million to reimburse the state Department of Corrections and for $5.7 million to reimburse the University of Arkansas for Medical Sciences, both for the loss of general revenue from recent budget cuts, Walther said in a letter to lawmakers.
An earlier version of this article incorrectly listed Charles Welch's title. He is the ASU System president.
Metro on 05/19/2020