Panel endorses $65.8 million to fund school projects

LITTLE ROCK — An Arkansas legislative panel on Tuesday endorsed the state Department of Education’s request for $65.8 million in state restricted reserve funds for the state’s share of public school building construction and major renovation projects.

In a voice vote with no audible dissenters, the Joint Budget Committee’s Performance Evaluation and Expenditure Review Subcommittee recommended the Joint Budget Committee approve the state Department of Education’s request.

Greg Rogers, chief financial officer for the state Department of Education, said in a letter dated March 8 to state Department of Finance and Administration Secretary Jim Hudson that the department requested $65.8 million from the restricted reserve fund’s education facilities set-aside under Act 561 of 2023, Section 3 for the state Division of Elementary and Secondary Education Facilities Partnership Program.

The program is a financial partnership between the state and public school districts to share the cost of school facilities construction and major renovations, he said.

Rogers said every two years school districts have the opportunity to apply for state financial participation for projects that support their facilities master plan.

“This funding will allow the division to partner with multiple districts across the state and provide for new schools, additions to existing schools, conversions of existing space, and renovations such as replacements of roofs, HVAC, electrical, plumbing or structural system,” he wrote in his letter.

The Legislature in 2023 authorized the transfer of $500 million of state surplus funds into the restricted reserve fund’s educational facilities set-aside to provide the state’s share of public school building projects over five or six years, “so we don’t keep going into [the Revenue Stabilization Act]” for the funds, Rogers told state lawmakers on Tuesday in response to a question from state Sen. Missy Irvin, R-Mountain View.

The state’s Revenue Stabilization Act distributes state general revenue to state-supported programs such as public schools, the state’s higher education institutions, human services and correctional programs.

State Sen. Jimmy Hickey, R-Texarkana, said state general revenue funds previously were allocated for the state’s share of public school building projects in the state’s Revenue Stabilization Act for about a decade, “although it has been escalating up of course as most things would.”

In fiscal 2023 that ended June 30, 2023, $70.3 million in general revenue was allocated for the educational facilities partnership program.

After the money in the restricted reserve fund’s education facilities set-aside “is used, are you trying to say that we will no longer need that anymore or at that particular point we will have to go back for a line-item” in the state’s Revenue Stabilization Act if surplus funds are no longer available to replenish the program, Hickey asked Rogers.

In response, Rogers said he doesn’t believe the education partnership program will end.

“I think that at the end of the fifth or sixth years once we extinguish the set-aside funds, it would be something that we would have to step back and look and see how much is needed, if it is another set-aside, or if it would be something that we would put in [the Revenue Stabilization Act],” he said.

The state Department of Education previously received approval to receive $83 million out of the restricted reserve fund’s education facilities setaside, according to a Bureau of Legislative Research analyst. If the Joint Budget Committee approves the department’s request for $65.8 million, that would leave a balance of $351 million in the restricted reserve fund’s education facilities set-aside.

Sen. Jonathan Dismang, R-Searcy, said he would encourage state officials to continue reevaluating the educational partnership program “to ensure that this is something sustainable for the state and that we are meeting the needs of the districts, but not exceeding the state participation.”