Committee to take up proposed budget

The state’s general-revenue budget would increase by $172.8 million over the current budget to $5.63 billion in the coming fiscal year under a proposed budget unveiled by legislative leaders Monday.

The proposed Revenue Stabilization Act that would distribute general revenue to state agencies in fiscal 2019 that starts July 1. It reflects negotiations between legislative leaders and Gov. Asa Hutchinson.

The proposed budget would create a restricted reserve fund and set aside what the Republican governor considers to be $63.9 million in surplus funds, with $47.9 million earmarked for extraordinary needs in the event of an economic downturn and future tax cuts. The remaining $16.9 million would be earmarked to help match federal highway funds.

The Joint Budget Committee today will consider sending the proposed Revenue Stabilization Act — in identical bills, Senate Bill 122 and House Bill 1137 — to the respective chambers today, said Sen. Larry Teague, D- Nashville, a committee co-chairman.

The proposed budget essentially mirrors the one Hutchinson unveiled in January at the start of budget hearings, said the other committee co- chairman, Rep. Lane Jean, R-Magnolia.

“Everybody felt pretty comfortable with it,” Jean said in an interview.

But Sen. Joyce Elliott, D-Little Rock, said, “I am concerned that this is not a collaborative process … because, if we are here for reasons other than rubber-stamping, there should be more collaboration here.

“The combination of, this

is what the governor has submitted and therefore, we have nothing else to say, is just out of character, I think, for what we are charged with doing,” she said.

Hutchinson said in a written statement that “the General Assembly made appropriate adjustments in spending categories.”

“I am pleased that the RSA amendment mirrors my proposed budget and includes language safeguarding $64 million in revenue in a newly created restricted reserve fund. These funds will be helpful in safeguarding against economic uncertainty, funding our highways and supporting future tax cuts,” he said.

The proposed act would distribute the first $5.51 billion to programs in Category A, including $15.8 million for the rainy-day fund, and the next $ 115.8 million to programs in Category B. Category A has a higher priority than Category B. In the event of a shortfall, Category B items would be cut back first.

The identical measures would increase the state Department of Human Services’ general- revenue budget by $142.7 million to $1.668 billion. They include a $ 137.8 million increase, to $1.251 billion, to the state’s Medicaid program and a $7.3 million increase, to $123.9 million, for the Division of Children and Family Services for foster care in fiscal 2019.

About $50 million of the increased budget for the Medicaid program would be in Category A, while $87.8 million of the Medicaid increase and the $7.3 million increase in the Division of Children and Family Services’ budget would be in Category B.

The proposed budget would increase the public school fund by $1.3 million to $2.194 billion, with the increase in Category A. About $ 48 million in additional funds will be provided to public schools from other funding sources, including the educational adequacy fund financed with a 0.875 percent state sales tax.

The Department of Correction would get a $3.5 million increase to $353.1 million, while the Department of Community Correction would receive $ 1.7 million more, to $87.9 million, under the budget. Both increases would be in Category A. General-revenue assistance for county jail reimbursement also would increase by $4 million, to $18.2 million, and the increase also would be in Category A.

The budget also has an $8 million increase for performance-based raises, for funding of $24 million, with the increase in Category B.

General revenue for twoand four-year public colleges would increase by $12 million to $745.6 million, with $9.4 million of the increase in Category B to implement the new higher education productivity-based funding formula. The other $2.6 million increase would go to Eastern Arkansas Community College, for a total of $8.4 million, and would be in Category A. That increase came from the $2.6 million previously for Crowley’s Ridge Technical Institute, which merged with the community college.