Legislative leaders and Gov. Asa Hutchinson said they expect to begin negotiations this week on the state's proposed Revenue Stabilization Act for the fiscal year starting July 1, with legislative leaders aiming to wrap up the fiscal session within the next two weeks.
The fiscal session started Feb. 14, and Monday will be the 15th day of the session. The House and Senate took Thursday off because of inclement weather and decided to reconvene Monday rather than Tuesday.
Hutchinson said Thursday that he and legislative leaders plan to meet early this week to begin negotiations on the proposed Revenue Stabilization Act for fiscal 2023.
The Revenue Stabilization Act prioritizes the distribution of state general revenue to state-supported programs such as public schools, human services, colleges and universities, and prisons. Individual income and sales and use taxes are the state's two largest sources of general revenue.
Hutchinson has proposed a $194.6 million increase in the state's general revenue budget to $6.04 billion for fiscal 2023, with most of the increase for public schools and human services programs. His proposal envisions leaving a $174.4 million surplus at the end of fiscal 2023.
When he unveiled his proposed budget Jan. 11, Hutchinson said it would increase the general revenue budget by 3.3% over the current fiscal 2022 budget and he acknowledged that is higher than what he would prefer. But he said the needs of the state and state government's healthy financial position support the increase.
Hutchinson said his proposal would fund initiatives to reduce the waiting list for the developmentally disabled people to receive services, make the entry-level salaries of state troopers more competitive with others in the South and boost the salaries of troopers with seniority, and provide sufficient state funding for the state's health insurance plan for current and retired public school and state employees.
House Speaker Matthew Shepherd, R-El Dorado, said Thursday that he "hasn't heard a lot of pushback" on the governor's proposed budget.
Rep. Lane Jean, R-Magnolia, a co-chairman of the Joint Budget Committee, said he would like to see the proposed 3.3% increase trimmed to under 3% increase.
The other co-chairman of the Joint Budget Committee, Sen. Jonathan Dismang, R-Searcy, said "the goal would to be get under a [3% increase], but we are still working through that."
Hutchinson has proposed a $66.3 million increase in the Department of Human Services' budget to $1.84 billion, including devoting $37.6 million to reduce the waiting list for developmentally disabled people to receive services in their homes and communities.
The governor also proposed a $69.6 million increase for the public school fund to $2.32 billion in fiscal 2023 and a $12.9 million increase for the state's colleges and universities to $775.6 million.
Earlier this month, Hutchinson said the state Department of Finance and Administration now conservatively estimates the general revenue surplus will be about $500 million at the end of fiscal 2022 on June 30, up from its earlier projection of $264.4 million.
Jean said he would like to see copies of the proposed Revenue Stabilization Act on lawmakers' desks by Friday, and have the House and Senate each vote on the proposal the following Tuesday and Wednesday or that week's Wednesday and Thursday.
LAW ENFORCEMENT
On opening day of the fiscal session, Hutchinson called for the General Assembly to authorize using about $45 million in general revenue surplus funds to make a one-time $5,000 payment to each city and county certified law enforcement officer. That proposal should cover other front-line officers as well, he said.
Senate President Pro Tempore Jimmy Hickey, R-Texarkana, has filed Senate Bill 103 that would create the Arkansas Full-Time Law Enforcement Officer Salary Stipend Act of 2022. Shepherd is the House sponsor of the bill.
Hickey said state Department of Corrections probation and parole officers, who are certified law enforcement officers, also would receive the $5,000 stipends, and state troopers would receive $2,000 stipends under his bill.
According to SB103, "While all persons employed by a local or state law enforcement agency or other state agency, locality, or political subdivision of the state are engaged in important and vital work in our criminal justice system, it is the intent of the General Assembly to limit the salary stipends provided for under this section to the most vital law enforcement officers, who are out on the street, literally standing between criminals and the public or engaged in active investigation of criminal acts committed against the public at large."
Thus, the General Assembly intends for the salary stipends to be awarded "to our state troopers, our deputy county sheriffs, our city and municipal police officers, our officers engaged in closely supervising our probationers and parolees, detectives who solve crimes, our patrolmen and patrolwomen, our criminal investigators, and any of the other certified law enforcement officers, who patrol and work our streets, who are the face of our communities, and who are active every day in protecting the public and stopping and investigating crime," the bill states.
Eligible law full-time enforcement officers employed as of July 1, 2022, and officers hired after July 1, 2022, but on or before Jan. 31, 2023, who meet the eligibility requirements are entitled to the stipends, according to the Department of Finance and Administration's legislative impact statement on SB103.
The Division of Law Enforcement Standards and Training will certify to the finance department the officers eligible for the stipends, and the finance department will distribute the stipends to the eligible law enforcement agencies, which will distribute the stipends to the officers, according to the finance department.
The projected cost of the stipends will be $40.46 million in fiscal 2023 based on 7,300 officers receiving $5,000 stipends and 542 eligible officers receiving $2,000 stipends, the finance department estimated.
Hutchinson said Thursday in a written statement that "I will sign any bill that gets to my desk that supports law enforcement and fulfills my announced support for a plan to provide a stipend to certified law enforcement officers."
The governor acknowledged that he has received requests to provide stipends to Department of Transportation highway police, college and university police officers, and Arkansas Game and Fish Commission law enforcement officers.
"The Legislature will determine how broad the stipend is applied," Hutchinson said. "I support the stipend for certified officers very broadly."
STATE POLICE
Earlier this month, Hutchinson said his proposed general revenue budget would significantly increase the pay of state troopers, and he challenged cities and counties to boost the salaries of their law enforcement officers, as well.
The governor proposed a $7.4 million increase in the budget for the Arkansas State Police to $78 million in fiscal 2023.
Jean has proposed an amendment to House Bill 1026, the Department of Public Safety appropriation for fiscal 2023, that would allow the Division of Arkansas State Police to implement a salary administration grid, effective July 1, after review by the Legislative Council or Joint Budget Committee's personnel subcommittee.
Under his proposal, "all employees in the certified law enforcement officer classifications, including recruits, at the Department of Public Safety are eligible for the increase in the salary administration grid," and the grid increase would be in addition to any cost-of-living or performance-based increases provided in fiscal 2023.
"Notwithstanding other provisions of law, salaries established by this section may exceed the maximum pay level for the grade assigned to the classification by no more than twenty percent ... for any affected employee," according to Jean's proposal.
The average annual salary for state troopers would increase from the current $44,944 to $54,130, and for troopers first class from the current $53,035 to $60,006, according to Bill Sadler, a spokesman for the Arkansas State Police.
The average annual salary for corporals would increase from the current $63,612 to $71,237 and for sergeants from $74,319 to $84,439, while the average annual salary for lieutenants would increase from $84,229 to $94,076, for captains from $94,277 to $105,166, and for majors from $107,541 to $116,772, Sadler said.
PRISON EXPANSION
Hutchinson has recommended using surplus funds for a 498-bed addition to the North Central prison unit in Calico Rock and said the cost of the additional space could be between $60 million and $100 million.
Shepherd said "that's a pretty good range," and state lawmakers need a better estimate of the price tag for the prison expansion.
Hutchinson said Thursday that "we are working with Secretary [Solomon] Graves and the Board of Corrections on the cost of the proposal."
CHINA OFFICE
Sen. Bob Ballinger, R-Ozark, has proposed an amendment to Senate Bill 67, which is the state Department of Commerce's appropriation for fiscal 2023, that would bar the Arkansas Economic Development Commission from allocating, budgeting or spending funds for contractual services with a private or public company, corporation, individual or organization for the operation of an office in China.
In the 2020 fiscal and 2021 regular legislative sessions, Sen. Trent Garner, R-El Dorado, fell short of winning approval for proposals to no longer allow the commission to maintain an office there.
The commission's executive director, Mike Preston, told lawmakers in 2020 that the commission had already planned to trim the office's budget from $285,000 to $125,000 a year in fiscal 2021, and employ an American citizen as a liaison in China. That proposed budget continues to be $125,000 in fiscal 2022.
Hutchinson said Thursday "I do not support Sen. Ballinger's proposed amendment to SB67.
"The state needs to be able to continue to work with foreign countries to make sure our exports business stay strong," he said.
Hutchinson has asked lawmakers to amend SB67 to specify that the Arkansas Economic Development Commission is authorized to enter into contractual arrangements with private and/or public companies, corporations, individuals or organizations to operate foreign offices "which shall only ... provide export trade assistance for Arkansas-based businesses, ... facilitate the repatriation to Arkansas of manufacturing businesses operating overseas, and ... encourage direct investment in Arkansas of foreign companies that are not state-owned or controlled."
The proposed fiscal 2022 budget totals $230,000 for the commission's office in Europe and $180,000 for the commission's office in Asia, according to Alisha Curtis, spokeswoman for the Department of Commerce.