Now that Arkansas Gov. Sarah Huckabee Sanders' education overhaul is law, state lawmakers will return to the state Capitol on Monday for four more days of meetings before taking a spring break that runs until March 27, and it's not clear when they will wrap up the regular session.
Republican legislative leaders and the governor said Thursday that they are still working on reaching agreement about the cost of providing an adequate education for public school students.
A Joint Budget Committee co-chairman, state Rep. Lane Jean, R-Magnolia, said Thursday "I think we got to get the [educational] adequacy number hammered down."
He said there are ongoing discussions about pay raises for public school classified staff such as school bus drivers and custodians. In their educational adequacy recommendations, the House and Senate education committees called for raising the per-pupil foundation amounts to cover pay increases of $2 per hour for classified staff.
Monday will be the 64th day of the 94th General Assembly's regular session.
Sen. Ben Gilmore, R-Crossett, who is working on public safety legislation with state Rep. Jimmy Gazaway, R-Paragould, said Saturday that "several factors are being considered with legislative leaders of both chambers and the governor's office.
"During a busy legislative session, members and their families have earned much-needed time away from the legislative process, and out of respect for the membership and their families, I anticipate we will file the bill once we return from spring break, when we can all squarely focus on the issue," he said in a written statement in response to a question about whether the bill will be filed this week.
House Speaker Matthew Shepherd, R-El Dorado, said Thursday he is unsure of how much the public safety package might cost the state.
The fiscal impacts of the measure are part of a broader discussion on how legislative priorities, including education and tax cuts, will affect the state's general revenue budget for fiscal year 2024, he said.
Senate President Pro Tempore Bart Hester, R-Cave Springs, said Thursday the public safety bill "is ready to file, but we have got to get the budget right first.
"The goal of the Legislature, and I believe the governor's office and the attorney general, is to have as many crimes under truth in sentencing as we can afford to put in, and I think that's what the people of Arkansas would want, but it all comes down to the numbers," he said. "So whether we are going to have 70 crimes or five crimes be [under] truth in sentencing, whatever it is, it will be a starting place for us."
The state's Revenue Stabilization Act prioritizes the state's distribution of general revenue of state-supported programs in each fiscal year.
In November, then-Gov. Asa Hutchinson proposed a $314 million increase in the state's general revenue budget to $6.33 billion in fiscal 2024, starting July 1, 2023, with $200 million of the increased general revenue earmarked for public schools.
At that time, the former Republican governor said his proposed budget for fiscal 2024 would represent a 5.2% increase over the current budget of $6.02 billion, leaving a projected general revenue surplus of $254.9 million at the end of fiscal year 2024. Considering inflation was more than 8% last year, limiting the growth of the state's general revenue budget to 5.2% reflects conservative budgeting in these challenging times, he said.
The state Department of Education has projected Sanders' education overhaul law, Act 237, will cost $297.5 million, including $150 million in "new money" in fiscal 2024.
Sanders signed the measure Wednesday.
For fiscal 2024, the department's projection includes $180 million for the teacher salary increase, and $46.7 million for Education Freedom Accounts, $20 million for high-impact tutoring, $12 million for the Teacher Academy Scholarship Fund, $10 million for the Merit Teacher Incentive Fund, $10 million for charter school facilities revolving loans, $8.5 million for supplemental education services, $6.2 million for literacy coaches, and $3 million for maternity leave for fiscal 2024.
Act 237 of 2023 also will increase the tax credits available under the Philanthropic Investment in Arkansas Kids Program Act, which were created under Act 904 of 2021. The program provides educational scholarship grants for eligible students to attend nonpublic schools and the 2021 law provides an income tax credit to individuals or businesses equal to 100% of contributions to scholarship-granting organizations that provide the grants. The credit may not exceed an eligible taxpayer's income tax due.
Act 237 of 2023 increases the credits available in the first year from $2 million to $6 million, and once the credits claimed exceed 90% of the total available in a particular year, Act 237 of 2023 requires the amount of the credit available to increase by 5% for each following year, according to the state Department of Finance and Administration. The finance department projects that will reduce general revenue by $4 million in fiscal 2023 and $4.3 million in fiscal 2024.
Act 237 of 2023 will increase the starting teacher salary by $14,000 a year to $50,000 a year, leaving Arkansas behind only Washington, Hawaii, New Jersey and the District of Columbia in starting teacher pay, according to the National Education Association, the nation's largest teachers union.
Teachers already making more than the new $50,000 a year minimum also will receive a $2,000 raise and can earn a bonus of up to $10,000 for good performance or for being willing to teach a subject matter or in a geographic area that is in high demand.
Act 237 also will create Educational Freedom Accounts that tie state funding for public schools to students. Students who receive an Educational Freedom Account will get 90% of what public schools get per student in state funding from the previous school year. The per-student funding for the 2022-2023 school year was $7,413.
The Educational Freedom Accounts program will be phased in over three years beginning with the 2023-2024 school year, creating a tiered priority list for students.
Shepherd said Thursday he believes there would still be room in the budget for tax cuts.
"What those specifically look like, that still remains to be seen," he said. "Most of the focus is obviously income tax reduction, but the specific amounts and timing of all that, those are kind of the details that have to be worked out."
The state's unallocated general revenue allotment reserve balance is $1.34 billion, said Scott Hardin, a spokesman for the state Department of Finance and Administration. The state's catastrophic reserve fund balance is $1.36 billion, he said, and the state's restricted reserve fund balance is $55.37 million.
In addition, the state Department of Finance and Administration's Nov. 10 forecast projects a general revenue surplus of $598.1 million at the end of fiscal 2023.
Jean said state lawmakers haven't determined what to do with the state's surplus funds, though using surplus funds to finance the construction of more prison beds and a new state Crime Laboratory are among the options.
"We need to hold onto a balance because I am concerned about the funding [of state government] three and four years [from now]," he said. "Years three, four and beyond is where we are going to be glad we had a surplus."
Hester said "we do know that if we are going to build a prison, we are going to use one-time capital funds, so we are looking at using one-time capital funds to help us achieve some of the goals we have committed to the people of Arkansas, but [also] continuing to have a very strong safety net."
As for how many more prison beds the state needs, Hester said "we are learning a lot about that every day."
The Arkansas House and Senate have approved a resolution for the chambers to recess starting Thursday at the close of business and ending March 27 to coincide with the spring breaks of high schools as well as a resolution to extend the regular session beyond 60 days and to recess April 7 or at an earlier date agreed upon by the House and Senate.
It would require a three-fourths vote of the 100-member House of Representatives and 35-member Senate to extend the regular session beyond April 7.
April 7 would be the 89th day of the regular session, April 14 would be the 96th day of the regular session, April 21 would be the 103rd day of the regular session, and April 28 would be the 110th day of the regular session.
The regular session lasted 118 days in 2021 and was 30 days longer than the 88-day regular session in 2019. The regular session lasted 86 days in 2017 and 82 days in 2015.
"We got [this week] and then we are going to be off for a week," Jean said Thursday, "and then we are going to come back for two weeks, and I am not sure we are going to get through [by April 7].
"We are going to try, but we may be longer than the 7th here," he said.
Shepherd said Thursday that lawmakers are still aiming for the April 7 recess date.
"If you back off, then people kind of get lulled back into this sense that, 'Hey we can take our time'," he said.
Hester said "I am confident that April 7th can be met.
"I have seen a commitment from members willing to work long hours," he said. "I haven't seen anybody say they want to work later than April 7th yet, but I have seen a lot members say we are willing to work long hours to get there."
Hester said he believes he could get a three-fourths vote of the Senate to extend the regular session beyond April 7 for a few more days for a justifiable reason such as completing action on the state's Revenue Stabilization Act.
Sanders said her focus for the rest of the regular session is on achieving her remaining legislative priorities.
"I'm less concerned about the timeline and more concerned about making sure we get each of the priorities completed," she said. "If we have to go past April 7 we certainly will, but I would love to see us out of here, as I'm sure everybody else would like to be gone by then too."
A bill that would restrict transgender people from using the bathroom of their choice at public or open-enrollment charter schools is listed on the Senate's agenda for Monday.
House Bill 1156, by Rep. Mary Bentley, R-Perryville, would require public schools and open enrollment public charter schools to prohibit people from using a multiple-occupancy restroom that does not correspond with the sex listed on their birth certificate.
The bill also would apply to places at schools where people "may be in various stages of undress" around others, which would include locker rooms, changing rooms and shower rooms.
Under the bill, students on overnight trips would have to either share sleeping quarters with one or multiple members of the same sex or be "provided single-occupancy sleeping quarters." If approved by the Senate, the bill would return to the House to allow lawmakers to concur on an amendment.
On the other side of the state Capitol, the House of Representatives' agenda for Monday includes a bill that would prohibit school staff from addressing students by a pronoun inconsistent with "student's biological sex" unless they have written permission from a parent.
House Bill 1468, by Rep. Wayne Long, R-Bradford, also would bar school staff from calling students by names other than those listed on birth certificates without written permission from a parent.
While the bill would be applicable for public schools, open enrollment charters and public colleges, permission would only be required for a student who is "an unemancipated minor."
The bill states school faculty "shall not be subject to adverse employment action" for not using a student's preferred pronoun or name.
Senate Bill 81 by Sullivan that would make librarians subject to criminal liability for distributing obscene materials is likely to appear on the House floor early next week, said the bill's House sponsor, Rep. Justin Gonzales, R-Okolona.
Under the bill, libraries would have to form committees to review objections to books. People could appeal decisions made by these panels to elected officials. For school libraries, the elected body would be the school board of directors. For a municipal or public library, appeals would go to the governing body of the county or city.
A bill that would criminalize knowingly entering and remaining in a bathroom of the opposite sex while a minor is present is bound for the House Committee on Judiciary.
Senate Bill 270 by Sen. John Payton, R-Wilburn, would create a criminal penalty for a person 18 or older who knowingly "enters into and remains in a public changing facility that is assigned to persons of the opposite sex while knowing a minor of the opposite sex is present in the public changing facility."
Sullivan said Saturday he doesn't plan to present his Senate Bill 71 that is aimed at eliminating affirmative action in state and local government in Arkansas to the House State Agencies and Governmental Affairs Committee this week.
SB71 also would give state agencies two years to implement that bill, if enacted into law. The Senate on Thursday voted 18-12 to send the bill to the House.
HOMESTEAD PROPERTY TAX CREDIT
Legislation that would increase the homestead property tax credit from $375 per parcel to $425 per parcel is in the Senate Revenue and Taxation Committee after the House voted 99-0 to approve it Monday.
House Bill 1032 by Rep. Lanny Fite, R-Benton, would be effective for assessment years starting on or after Jan. 1, 2023.
The homestead property tax credit reduces the amount of real property taxes due on a property owner's qualified homestead for each assessment year, the state Department of Finance and Administration said in a legislative impact statement on HB1032. To claim the credit, a property owner registers with the county assessor and provides proof of eligibility for the credit.
The finance department projects that HB1032 will cost $34 million in calendar year 2024 and $34.8 million in calendar year 2025.
In the 2000 general election, voters approved Amendment 79 to the Arkansas Constitution to create the homestead property tax credit. In response, the Legislature enacted a half-cent sales tax, effective Jan. 1, 2001, and the revenue is credited to the property tax relief trust fund.
The Legislature established the initial homestead property tax credit at $300 per parcel before voting in 2007 to increase it to $350 and then voting in 2019 to increase it to $375. The 2019 law also allows the transfer of excess funds in the property tax relief trust fund to the state's catastrophic reserve fund.
A new version of a bill that would allow local governments to post certain notices online rather than in newspapers is likely to be filed next week.
Rep. Frances Cavenaugh, R-Walnut Ridge, said on Friday the state Bureau of Legislative Research is drafting a bill intended to replace House Bill 1399, which would allow counties and municipalities to post notices related to delinquent taxes, elections, ordinances, delinquent properties and financial statements on a nongovernmental "third-party website" subject to audit by the state.
The new bill originated out of a compromise with the Arkansas Press Association, she said.
Supporters of House Bill 1399 have said it would modernize the way local officials publish notices and save funds for counties and cities. Opponents have raised concerns the bill could lead to less government transparency and reduce an important revenue stream for local newspapers.
Cavenaugh said the new bill is expected to cover more notices than House Bill 1399 but would not address delinquent tax notices. As of Friday, she said she was unsure of all the notices the new bill might encompass but said it would provide a five-year period before local officials could post notices online.
HB 1399 would have phased in online notices at yearly intervals over five years.
Information for this article was contributed by Neal Earley of the Arkansas Democrat-Gazette.