LITTLE ROCK -- Arkansas' public schools, prisons and Medicaid programs are set to receive boosts in funding while most other state agencies will see a 1 percent cut under a nearly $5.2 billion proposed state budget unveiled Friday afternoon.
House and Senate leaders released the proposed Revenue Stabilization Act, the budget bill that's set to go before a legislative committee Monday as lawmakers near the end of this year's session. The proposal, which prioritizes spending based on expected funding, closely mirrors the budget proposal Republican Gov. Asa Hutchinson detailed earlier this year.
"It's a very tight budget," Senate President Jonathan Dismang said.
The proposal calls for increasing school funding by $49.5 million, while the Department of Correction budget would increase by $14.3 million and reimbursement to county jails holding state inmates would increase by $11.4 million. Funding for the Department of Human Services, which administers Medicaid, increases by $80 million.
The legislation calls for cutting most other state agency budgets by 1 percent, while higher education funding would remain flat.
Dismang said the proposal calls for restoring a capital gains tax break that was scaled back earlier this year by cutting various grants for various programs, including libraries and community health centers. The proposal is expected to cost the state $6 million in the coming fiscal year, which begins July 1. Hutchinson met with legislative leaders as they wrote the budget bill.
"The changes made in the Revenue Stabilization bill since my budget are necessary in order to balance the budget and take into account the restoration of the capital gains exclusion as well as the impact of other policy changes from the session, including increased funding for pre-K," Hutchinson said in a statement released by his office.
Dismang and House Speaker Jeremy Gillam have said both chambers of the Legislature will also each have $10 million from the state's projected $216 million surplus to allocate for various one-time needs. The proposal sets aside $4.3 million for a rainy day fund for emergency needs.
"I do think we've made sure there is a cushion there, but we've also made sure that we didn't go overboard on cuts or anything," Gillam said.
The legislation calls for $10 million in school transportation and facilities funding to be placed in a category that won't be funded unless revenue comes in higher than expected.
Lawmakers hope to wrap up by Thursday a session where they approved Hutchinson's proposal to cut income taxes by $102 million. Hutchinson has said there's no more room for additional cuts and the capital gains tax break, despite a late push by supporters of an exemption for retired military veterans.
"With the numbers the way they are, there's really no way to work that in during this session," Dismang said.
State Desk on 03/28/2015