Legislative session off to smooth start

The 2023 legislative session got off to a smooth start. The full Senate confirmed the governor’s secretarial nominations, and Senate committees got their initial organizational meetings out of the way.

The governor had named 14 of a possible 15 cabinet nominees, and the Senate quickly confirmed her selections. The head of the Department of Finance and Administration, the Department of

Labor and Licensing and the Department of Agriculture will continue in the positions they held under the previous administration.

The other appointees are new. The new secretaries of three large and important agencies, Education, Corrections and Human Services, have many years of experience in their fields but are new to Arkansas government.

Also during the first week of the session, the legislature approved the General Appropriation Bill. Under the state Constitution, it must be approved before any other spending measures are approved.

Appropriations generally don’t garner the same amount of public attention as other bills, but it is the legislature’s constitutional duty to approve budgets for state government. The Joint Budget Committee and its subcommittees will meet more often than any other committees.

Legislators will prioritize spending levels in the state’s $6.3 billion general revenue fund. State agency budgets will reflect the political values of Arkansas as much as bills related to so-called “hot button” issues.

State agency budgets reflect our political priorities because they determine how much state government will spend on public schools, health care, law enforcement, welfare and food stamps, higher education, job training, promoting our tourism industry, equipping our National Guard units and protecting the environment.

Last year the legislature enacted about 220 separate appropriations for state agency budgets.

The general revenue fund is the state’s largest discretionary fund. The major sources of revenue are sales taxes, individual income taxes and corporate income taxes.

Highway construction and maintenance are the responsibility of the state Transportation Department, which gets revenue from gasoline and diesel taxes and registration fees paid by heavy vehicles.

Those are called special revenues because they are dedicated to maintaining highways and bridges, and are not considered during legislative debates about how to spend general revenue.

Arkansas operates under a balanced budget law known as the Revenue Stabilization Act. It will be one of the last bills considered toward the end of the session, probably in mid to late March or early April.

It prioritizes the state’s budget in the event of an economic downtown that slows or reduces the collection of state taxes.

If tax revenue drops, spending will be reduced accordingly.

Fiscal decisions are different for Congress in Washington, D.C. because the federal government can deficit spend, which means it can borrow money for annual operations. The state legislature must balance its annual operating budget, so it sometimes has to make difficult choices about which programs are funded and which ones are not.

About 42 percent of the state’s general revenue budget goes for public schools and 13 percent goes for higher education.

Health and human services account for about 31 percent. Public safety and prisons account for about 10 percent.