Legislative leaders aim to wrap up the General Assembly fiscal session Tuesday with the House and Senate enacting identical proposed Revenue Stabilization Acts that would increase the general revenue budget by $175.1 million, to $6.02 billion in the fiscal year starting July 1.
State Rep. Jeff Wardlaw, R-Hermitage, is attempting to limit increases in property taxes resulting from rising values on used vehicles through his amendment to an appropriation for the state Department of Finance and Administration.
If a used vehicle was assessed in calendar year 2020 and is assessed in calendar year 2022, the value of the used vehicle as assessed in the calendar year "shall not be higher than its published assessed value in calendar year 2020," through Dec. 31, 2023, under Wardlaw's amendment to House Bill 1028. The House on Thursday voted 89-0 to approve the bill, sending it to the Senate for further action.
Monday will be the 22nd day of the fiscal session.
The Legislature's Joint Budget Committee will convene Monday morning to consider recommending approval of identical proposed Revenue Stabilization Acts -- Senate Bill 101 and House Bill 1117 -- to the respective chambers.
Legislative leaders said the Senate and House are expected to consider approving the respective bill that started in one chamber Monday afternoon, and then the Senate and House are expected to consider approving the respective bill that started in the other chamber Tuesday morning.
"I just hope everything runs smooth and we get out," said a Joint Budget Committee co-chairman Rep. Lane Jean, R-Magnolia.
Gov. Asa Hutchinson has scheduled a bill signing ceremony for 11 a.m. Tuesday in the state Capitol rotunda, according to his office.
The identical proposed Revenue Stabilization Acts would transfer $150 million from the general revenue allotment reserve fund to the various improvements and projects set aside in the restricted reserve fund, but the bills don't list any projects.
Legislative leaders said the $150 million in the restricted reserve fund could pay for a proposed prison expansion, state funds to match federal funds for a new veterans home in Northwest Arkansas, the public safety equipment grant fund, projects at the Arkansas School for the Deaf and Arkansas School for the Blind, and/or assistance for the Arkansas National Guard Foundation. The Legislative Council's approval will be required to tap funds requested by the governor for these projects.
Last month, Hutchinson said the finance department conservatively estimates a $500 million general revenue surplus at the end of the fiscal 2022 on June 30.
The proposed Revenue Stabilization Act developed by legislative leaders and the governor would increase the state general's revenue budget by 2.9% -- a slight decrease from the 3.3% increase proposed by Hutchinson on Jan. 11. Hutchinson initially proposed a $194.6 million increase in the state's general revenue budget to $6.04 billion in fiscal 2023, and envisioned leaving a surplus of $174.4 million at the end of fiscal 2023.
The proposed Revenue Stabilization Act would increase the general revenue allocation for the Department of Human Services by $46.3 million, or 2.5%, to $1.82 billion, according to Bureau of Legislative Research records. Hutchinson initially proposed a $66.3 million increase for the department to $1.84 billion.
The proposal would increase the general revenue allocation for the Department of Human Services' grants account, including Medicaid, by $23.5 million, or 1.7%, to $1.39 billion, Bureau of Legislative Research records show. Hutchinson initially proposed a $43.5 million increase in the general revenue budget for grants to $1.41 billion.
Rep. Lane Jean, R-Magnolia, said Friday the state Department of Human Services "has the balances to take care" of receiving a smaller increase in general revenue for the grants account in fiscal 2023.
"They have $550 million in the Medicaid trust fund," and the department has been the beneficiary of receiving an increased matching rate from the federal government for the Medicaid program during the covid-19 pandemic, "so we are able to save some [state] money," said Jean, who is a co-chairman of the Joint Budget Committee.
USED VEHICLES
Wardlaw said Friday that he proposed his amendment to HB1028 to limit increases in the property tax assessments on used vehicles, after reading news reports about assessors raising the property values on used vehicles.
He said he proposed the amendment to give owners of used vehicles some relief on inflation on their property values on used cars, and "that inflation was caused by the chip shortage on new cars."
Asked whether his amendment meets legal and constitutional muster, Wardlaw said, "I'm being told we are good."
Wardlaw told lawmakers last week that the amendment is aimed at making sure taxpayers don't pay inflated property taxes based on inflated values of their used vehicles and allow time for the chip shortage for vehicles to work itself out.
But Lindsey French, legal counsel for the Association of Arkansas Counties, warned that taxpayers could face an extraordinary jump in property taxes for their used vehicles after the end of 2023 under the proposed amendment if the market doesn't work itself out.
Asked if he had any legal or constitutional concerns about Wardlaw's amendment to HB1026, Hutchinson said Friday that "The amendment to hold assessments for used cars between 2020 and the present is justified because of the unusual price fluctuations caused by the pandemic.
"The amendment needs to be considered a temporary relief measure, and the fact that it sunsets in 2023 satisfies me that it will not be a long term change," Hutchinson said in a written statement.
The governor is an attorney.
LAW ENFORCEMENT
The House of Representatives on Thursday voted 93-0 to send Hutchinson a bill that would grant one-time stipends to several thousand local and state certified law enforcement officers.
On Feb. 14, the governor called on state lawmakers to authorize using about $45 million in general revenue surplus funds to make a one-time payment of $5,000 to each certified city and county law enforcement officer as well as other front-line officers.
Full-time certified city and county law enforcement officers and full-time certified state Department of Corrections probation and parole officers would receive a one-time stipend of $5,000, while full-time certified state troopers would receive a one-time stipend of $2,000 in fiscal 2023 under Senate Bill 103 by Senate President Pro Tempore Jimmy Hickey, R-Texarkana.
SB103 would require the chief fiscal officer to transfer $50 million from the general revenue allotment reserve fund to a law enforcement stipend grant fund to provide funding for the stipends. Hickey has said he doesn't expect the stipends to cost a total of $50 million, and any leftover funds would be transferred back to the general revenue allotment reserve fund.
Eligible full-time law 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 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.
On Feb. 14, Hutchinson also called on lawmakers to transfer $10 million in state surplus funds to the public safety equipment grant program.
Hutchinson spokeswoman Shealyn Sowers said Friday that the funding for the public safety equipment grant fund will come from the $150 million restricted reserve set aside.
A month ago, Hutchinson recommended using state surplus funds for a 498-bed addition to the North Central Unit in Calico Rock and said the cost of the prison expansion could be between $60 million and $100 million.
Jean said Friday that he's heard cost estimates for the prison expansion between $60 million and $90 million.
"There are some pretty big swings about what they think the actual cost will be there," said Sen. Jonathan Dismang, R-Searcy, a co-chairman of the Joint Budget Committee.
"We want to make sure everybody understands we are going to be looking at this hard," Hickey said before the Legislative Council considers using funds out of the $150 million restricted reserve fund for the prison expansion.
Asked if there is an updated rough cost estimate for the prison expansion, Department of Corrections spokeswoman Cindy Murphy said Friday, "No.
"Plans are still being developed," she said.
NATIONAL GUARD
The House on Thursday voted 93-0 to send the governor Senate Bill 105 by Sen. Ricky Hill, R-Cabot, which would grant the Department of the Military $5 million in spending authority for grants to the Arkansas National Guard Foundation in fiscal 2023.
The mission of the Arkansas National Guard Foundation is to provide charitable and educational support to the members of the Arkansas National Guard, veterans and other charitable organizations that support veterans and their communities, according to the foundation's website. Col. Paul Jara is president of the foundation's board of directors.
Sowers said Friday that the governor supports the $5 million appropriation to the National Guard Foundation and it will be funded through the $150 million restricted reserve set aside.