State Capitol Week in Review from Senator Terry Rice

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LITTLE ROCK – The legislature has begun budget hearings in preparation for the 2022 fiscal session, which begins on February 14.

Legislators will consider the governor’s proposed balanced budget of about $6 billion for Fiscal Year 2023, which officially begins on July 1.

The governor’s proposal would increase state general revenue spending by 3.3 percent over this year’s budget. This year’s budget is about $5.85 billion and the governor proposes to increase it to $6.04 billion.

The governor’s proposed budget is a starting point, and the legislature will finalize all financial decisions, because under the Arkansas Constitution the legislature has the power to authorize state government spending.

No matter how the legislature changes the governor’s spending plans, the final version of next year’s budget will be balanced. Arkansas does not deficit spend. If tax revenue declines due to an unforeseen economic downturn, state spending will be reduced proportionately.

The governor proposes to increase the Public School Fund by $69.6 million, 3.08 percent. That would bring the fund to $2.33 billion.

The governor proposes an increase of $66.3 million in the Department of Human Services budget. That is a 3.72 percent increase, and would bring the state’s share of the DHS budget to $1.85 billion. The federal government provides matching funds for services offered by DHS. Medicaid is the main one.

The Children and Family Services Division within DHS administers foster care, child welfare and adoption services. The governor’s proposal would increase funding for child protective services.

The budget proposal would reduce the waiting list of families who need home care or community care for loved ones with developmental disabilities. Now, there are a little more than 3,000 people on the waiting list. The governor and legislative leaders are trying to eliminate the need for a waiting list by 2025.

Four-year universities would receive an additional $12.2 million in state aid under the budget proposal. That is a 2 percent increase over the $612 million that universities get this year.

Two-year colleges now receive about $118 million in state aid. The proposed budget would increase that to $119 million. The increase would be 0.69 percent.

The State Police would get a 10.6 percent increase, from $70.6 million to $78 million. The governor said that raising pay for State Troopers would be an incentive for local law enforcement agencies to make their salaries more competitive.

The Division of Correction, which operates state prison units, would get an increase of $3.9 million, or 1 percent, bringing its annual spending level to $379 million.

The Division of Community Correction has residential treatment centers, and is in charge of probation and parole. Its annual budget would increase by 0.78 percent, or $753,000, to $97.7 million for Fiscal Year 2023.

About 55 percent of the state’s general revenue fund goes for education. That includes institutions of higher education, which get 13 percent, and K-12, which gets 40 percent. The state Education Division gets 2 percent. About 32 percent of state general revenue is spent on health and human services, and about 8 percent on prisons and correctional institutions. Various smaller agencies receive the rest.

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