Cut broadband plea, agency asked

Reduce grant request to $30 million, legislative panel says

A legislative panel on Tuesday asked officials to reduce to $30 million the state Department of Commerce’s request to use $150 million in federal American Rescue Plan coronavirus relief funds on broadband grants.

The Commerce Department sought a recommendation from the Legislative Council’s Performance Evaluation and Expenditure Subcommittee for $150 million in spending authority to use the federal funds for broadband grants. Fiscal 2022 starts July 1.

The subcommittee instead approved a motion by Rep. DeAnn Vaught, R-Horatio, to ask state officials to submit a request to the Legislative Council on Friday for $30 million in spending authority and ask the state’s American Rescue Plan steering committee for more work on a broadband plan.

Afterward, Gov. Asa Hutchinson said, “As to the $150 million request for broadband funding, I will work with the legislators to address their concerns, and hopefully, the full amount will be approved.

“The legislators raised important questions, and I trust these can all be resolved quickly,” the Republican governor said in a written statement.

“Everyone is agreed that there is a real urgency to put the American Rescue [Plan funds] to work in expanding high speed Internet in the state,” Hutchinson said. “The $150 million is an important start.”

The Arkansas Rural Connect Grant Program has awarded $113.5 million in federal coronavirus relief funds and $4.5 million in state funds to 76 projects, according to the Commerce Department.

Commerce Secretary Mike Preston said the department’s request for $150 million in spending authority would continue the Rural Connect Grant program.

Steven Porch, the department’s executive broadband manager and chief legal counsel, said the department has about $30 million in broadband grant requests in unserved and undeserved areas that “we believe is ready, with very minor tweaks” to meet the new federal guidance in the American Rescue Plan.

Preston said the department also has about $115 million in broadband projects that could qualify for the federal funds with more tweaks, and that cost is probably going to increase because the federal guidance focuses on fiber distribution rather than wireless distribution.

“We are hoping that we will see a lot of [grant] applications that spread out throughout the state,” Porch said.

“That’s what we did with our CARES Act funds. We spread those 76 projects across the state. We are hoping that the same thing will occur in this manner,” he said. “But we will need the county judges and the mayors and [internet service providers] to partner for these particular areas. What we will do to make sure that they focus on these areas is we are going to post this map to our website, so they will know the areas of focus and the attention.”

About 235,000 people reside in unserved and underserved areas that are eligible for broadband projects financed with American Rescue Plan funds, Porch said.

The 15-member American Rescue Plan steering committee was appointed by Hutchinson to recommend the best uses for $1.57 billion in the federal funds. The steering committee consists of nine department secretaries and six lawmakers.

The committee endorsed providing $150 million for state broadband grants. The Commerce Department originally asked for $300 million.

At that time, steering committee member Stacy Hurst said the steering committee could reconvene “as quickly as possible when we have more information about how we can obtain a consultant to help guide our broadband efforts,” and then the steering committee could consider the request for the additional $150 million.

In other action Tuesday, the legislative panel voted to send the governor’s requests to transfer funds out of the restricted reserve funds to various state programs to the Legislative Council on Friday, with the recommendation that these requests be approved only if the state submits a new request for $35 million for the health insurance fund for public school employees in fiscal 2022 rather than in fiscal 2021. The personnel subcommittee today would have to recommend approval of the new request.

Afterward, Hutchinson said the state Department of Finance and Administration will submit a $35 million request for the Employee Benefits Division from the restricted reserve fund in fiscal 2022 rather than in fiscal 2021.

“It will result in more funds going into long-term reserve and less in the restricted reserve account for [fiscal] 2022,” he said.

A week ago, the state Board of Finance voted to ask the Legislative Council to approve a $35 million transfer out of the restricted reserve fund in fiscal 2021 to help shore up the insurance plan for public school employees. But Senate President Pro Tempore Jimmy Hickey, R-Texarkana, said at that time that he favors tapping that fund for the money in fiscal 2022 rather than in fiscal 2021.

Hutchinson made 13 requests totaling about $60 million for transfers out of the reserve fund to various state agencies and programs in fiscal 2022.

These requests included:

■ $28.5 million for the state Department of Education’s educational facilities partnership program.

■ $12.4 million for the state Division of Higher Education to expand graduate medical residency programs.

■ $4.8 million to the Arkansas Economic Development Commission for a grant to the Arkansas State Police Foundation to be used for improvements to the state police’s precision driving track.

■ $4 million to the Division of Higher Education for scholarships for historically black colleges and universities and for outreach programs to promote awareness of the scholarships.

■ $3.8 million to the Arkansas State University System to implement an enterprise resource planning system for its seven institutions.

■ $3 million to North Arkansas College to partially fund the planned construction of its $8 million Center for Robotics and Manufacturing Innovation facility. The other funds will include federal grant funds, private and local contributions, local grant funds and college reserves.

■ $2 million to the state Department of Public Safety for the crime reparations revolving fund.